William Eichler 06 February 2024

Medway requests emergency £14.6m loan

Medway requests emergency £14.6m loan  image
Image: Number1411 / Shutterstock.com.

Medway Council has asked the Government for an emergency loan of £14.6m to help the struggling local authority avoid being forced to declare effective bankruptcy.

The council is facing a £35.8m budget gap in 2024-25 and it needs to find £12m for the current financial year.

A council-commissioned report from the Chartered Institute of Public Finance and Accountancy (CIPFA) warns Medway ‘is in a grave situation in relation to its financial sustainability’.

The Government has refused permission to allow the council to increase council tax above the 4.99% limit.

Medway Council has instead requested to borrow up to £14.6m in 2024/25, and a further £16.2m in 2025/26.

It has also published proposals to increase parking charges and end a free swimming programme.

Council leader Vince Maple said: ‘Medway is not alone in its financial position, with the Local Government Association reporting that one in five councils could be in severe financial hardship in two years. It is absolutely critical that we act now to bring the council back into long-term financial health.

‘If the Government supports our request for borrowing and if this important decision is agreed through the Cabinet and Full Council processes, as well as putting in place the improvement plan outlined by CIPFA, it will help us head in the right direction towards becoming financially sustainable.’

If this article was of interest, then check out our feature, 'Preventing future Section 114 notices'.

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