Medway Council’s medium-term financial outlook, considered by Cabinet on 22 September 2026, projects a £65.858 million shortfall for 2027/28, rising to more than £359 million across five years, driven chiefly by soaring adult social care and children’s services costs.

Medway Council faces a budget gap of £65.858 million in 2027/28, growing to a cumulative £359.314 million over the following four years, according to the medium-term financial outlook presented to Cabinet on 22 September 2026. Officers warned that without significant savings, service transformation and further government support, the council would be unable to deliver a sustainable balanced budget across the planning period.

Adult social care the primary pressure

The single largest driver is adult social care, where the budget is projected to rise from £114.458 million in 2026/27 to £153.061 million in 2027/28 — an increase of £38.603 million in a single year. Officers attributed this to the rising cost of existing care packages (£18.684 million), provider fee uplifts (£7.304 million), forecast demographic growth (£8.615 million), and the cost of children transitioning into adult services (£3.490 million).

The council’s own transformation programme — the Adult Social Care Recovery: Better Lives, Better Value Programme — is expected to deliver savings of £8.946 million in 2027/28, but officers cautioned that achieving the full saving depends on the pace of implementation, the availability of appropriate accommodation, and further validation of the client cohort assumptions underpinning the estimate.

Children’s services and financing costs also rising

Children’s social care costs are projected to increase by £9.210 million in 2027/28, driven by a forecast rise of 50 placements, inflationary pressures and the growing number of children in higher-cost placements. Interest and financing costs are projected to rise from £24.710 million in 2026/27 to £32.710 million in 2027/28, reflecting the council’s increasing reliance on borrowing.

The council ended 2025/26 with a net overspend on services of £9.819 million, requiring a further capitalisation direction — a form of exceptional financial support from government that allows revenue costs to be funded through borrowing — taking the total borrowed under that mechanism to £28.003 million. In the current financial year, 2026/27, the first round of budget monitoring projected an overspend of £26.724 million, a figure exceeding the council’s general reserve balance of £10.12 million at 31 March 2026.

Government support being sought

The Chief Operating Officer has been in ongoing discussions with the Ministry of Housing, Communities and Local Government about further exceptional financial support. The Deputy Leader has also written to the Secretary of State for Health and Social Care, copying in the Secretary of State for Housing, Communities and Local Government and the Chancellor of the Exchequer, setting out the pressures on the adult social care budget and requesting additional grant funding.

Officers noted that the projections assume further exceptional financial support from government will be required, and that there remains a significant risk to the council’s financial resilience should that support not be forthcoming. Cabinet was asked to instruct directorate management teams to continue working with portfolio holders to identify savings and income generation proposals ahead of the Full Council budget meeting in February 2027.

The council had not published the minutes of the meeting at the time of writing, so the committee’s decision is not yet on the public record.

Sources

Top image: illustrative, computer-generated. Illustrative AI-generated image of a council chamber interior. This is not a photograph of Medway Council or any real council building.