Agenda item

This report sets out Cabinet’s proposals for the Capital and Revenue budget for 2026 / 2027. Council is required to approve the Capital and Revenue Budget, rent increases and the Council Tax for 2026/27.

Background:

 

The Mayor advised that Members of the Council who had two or more months of council tax arrears would not be permitted to vote on the Council budget.

 

This report set out the Cabinet’s proposals for the Capital and Revenue budget for 2026/27. In accordance with the Constitution, Council was required to approve the Capital and Revenue Budget, rent increases and the Council Tax for 2026/27.

 

The Cabinet had considered initial budget proposals on 18 November 2025. On 17 December 2025 the Government had published the Provisional Local Government Finance Settlement. Details of the funding announcements and their impact on Medway Council’s budget had been set out in a report considered by the Cabinet on 13 January 2026.

 

In accordance with the Council’s Constitution, Overview and Scrutiny Committees were invited to comment on the Draft Budget proposals within the remit of each respective Committee. The comments from the Overview and Scrutiny Committees were considered by the Cabinet, alongside the budget proposals, at the Cabinet meeting on 10 February 2026.

 

An overarching Diversity Impact Assessment was attached as Appendix 11 to the report. This summarised the results of the Diversity Impact Assessments which had been completed for each of the services affected by the proposed budget changes.

 

The Leader of the Council, Councillor Maple, supported by the Deputy Leader, Councillor Murray, proposed the recommendations set out in the report.

 

Councillor Hackwell, supported by Councillor Tejan, proposed the following amendment:

 

Amendment to recommendation 1.2

 

“Approve the general fund gross, income and net revenue estimates as summarised in Table 1 of this report in the sum of £523.752million.384million, thereby reducing the requirement for Exceptional Financial Support (EFS) from £9.856million to £9.488million.  This would be achieved by the changes set out in the table below resulting in a net saving of £368,000 (rounded up):

 

Savings	£
Care Home (Care for Medway) financing costs*	300,000
Removing High Street Support Package and town centres reimagined	500,000
Delete Town Centres and Economic Development Comms Officer post	50,000
Remove Visitor Economy Investment	70,000
Remove Comms Staffing Growth	155,000
Total savings	1,075,000
*this will remove £2.7million per annum financing costs for future years

 

New spend	£
Free parking for 30 minutes in the following car parks: Cricketers (Rainham) Longley Road (Rainham) Littlewoods (Gillingham) Jeffery Street (Gillingham) Commercial Road (Strood)	351,641
Free parking at all country parks	355,600
Total new spend	707,241”

 

New recommendation 1.20

 

“Remove Care Home (Care for Medway) from the Capital Programme, saving £44million.”

 

Amended recommendation reads:

 

Amendment to recommendation 1.2

 

“Approve the general fund gross, income and net revenue estimates as summarised in Table 1 of this report in the sum of £523.384million, thereby reducing the requirement for Exceptional Financial Support (EFS) from £9.856million to £9.488million.  This would be achieved by the changes set out in the table below resulting in a net saving of £368,000 (rounded up):

 

Savings	£
Care Home (Care for Medway) financing costs*	300,000
Removing High Street Support Package and town centres reimagined	500,000
Delete Town Centres and Economic Development Comms Officer post	50,000
Remove Visitor Economy Investment	70,000
Remove Comms Staffing Growth	155,000
Total savings	1,075,000
*this will remove £2.7million per annum financing costs for future years

 

New spend	£
Free parking for 30 minutes in the following car parks: Cricketers (Rainham) Longley Road (Rainham) Littlewoods (Gillingham) Jeffery Street (Gillingham) Commercial Road (Strood)	351,641
Free parking at all country parks	355,600
Total new spend	707,241”

 

New recommendation 1.20

 

“Remove Care Home (Care for Medway) from the Capital Programme, saving £44million.”

 

In accordance with Rule 12.5 of the Council Rules, a recorded vote on the amended proposal was taken.

 

For – Councillors Anang, Brake, Clarke, Etheridge, Fearn, Filmer, Gilbourne, Gulvin, Hackwell, Hyne, Joy, Kemp, Lawrence, Perfect, Spring, Tejan and Wildey. (17)

 

Against – Councillors Animashaun, Bowen, Browne, Campbell, Cook, Coombs, Curry, Field, Finch, Gurung, Hamandishe, Hamilton, Howcroft-Scott, Hubbard, Jackson, Jones, Mahil, Mandaracas, Maple, McDonald, Murray, Myton, Nestorov, Nestorova, Peake, Pearce, Louwella Prenter, Mark Prenter, Price, Sands, Shokar, Stamp, Mrs Turpin, Van Dyke, Vye and Williams. (36)

 

Abstain – None

 

The amendment was lost.

 

Note: In addition to the Councillors named under the Apologies for Absence agenda item, Councillor Paterson was not present for the recorded vote.

 

Councillor Pearce, supported by Councillor Sands, proposed the following amendment:

 

Amendment to recommendation 1.2

 

“Approve the general fund gross, income and net revenue estimates as summarised in Table 1 of this report in the sum of £523.752million, subject to the following amendments:

 

Savings	£
No senior salary increases (Service Manager or above) across all directorates	266,460.00
Remove “Chatham and Gillingham Safe & Clean High Streets Initiative”	271,000.00
Remove “Gillingham Regeneration Enablement Fund”	75,000.00
Remove “Rainham Reimagined Enablement Fund”	75,000.00
Remove “Develop a Business Improvement District (BID) business plan for Chatham”	57,000.00
Total Savings	744,460.00

 

New spend	£
Hoo Peninsula (Strood Rural Ward, Hoo & High Halstow Ward and All Saints Ward) Additional Pothole Repair & Resurfacing Fund	744,460.00
Total new spend	744,460.00”

 

Amended recommendation reads:

 

Amendment to recommendation 1.2

 

“Approve the general fund gross, income and net revenue estimates as summarised in Table 1 of this report in the sum of £523.752million, subject to the following amendments:

 

Savings	£
No senior salary increases (Service Manager or above) across all directorates	266,460.00
Remove “Chatham and Gillingham Safe & Clean High Streets Initiative”	271,000.00
Remove “Gillingham Regeneration Enablement Fund”	75,000.00
Remove “Rainham Reimagined Enablement Fund”	75,000.00
Remove “Develop a Business Improvement District (BID) business plan for Chatham”	57,000.00
Total Savings	744,460.00

 

New spend	£
Hoo Peninsula (Strood Rural Ward, Hoo & High Halstow Ward and All Saints Ward) Additional Pothole Repair & Resurfacing Fund	744,460.00
Total new spend	744,460.00”

 

In accordance with Rule 12.5 of the Council Rules, a recorded vote on the amended proposal was taken.

 

For – Councillors Pearce, Sands, Mrs Turpin and Williams. (4)

 

Against – Councillors Anang, Animashaun, Bowen, Brake, Browne, Campbell, Clarke, Cook, Coombs, Curry, Etheridge, Fearn, Field, Filmer, Finch, Gilbourne, Gulvin, Gurung, Hackwell, Hamandishe, Hamilton, Howcroft-Scott, Hubbard, Hyne, Jackson, Jones, Joy, Kemp, Lawrence, Mahil, Mandaracas, Maple, McDonald, Murray, Myton, Nestorov, Nestorova, Peake, Perfect, Louwella Prenter, Mark Prenter, Price, Shokar, Spring, Stamp, Tejan, Van Dyke, Vye and Wildey. (49)

 

Abstain – None

 

The amendment was lost.

 

Note: In addition to the Councillors named under the Apologies for Absence agenda item, Councillor Paterson was not present for the recorded vote.

 

Councillor Finch, supported by Councillor Vye, proposed the following amendment:

 

Amendment to recommendation 1.2

 

“Approve the general fund gross, income and net revenue estimates as summarised in Table 1 of this report in the sum of £523.752million, subject to reallocating total savings of £6,414,738 for new spend on a £1,000 flat rate staff pay award, an increase of the Highways Maintenance Revenue Budget of £2,814,738 (representing a 563% increase in allocation), and the introduction of the ‘499 Scheme’ - a staff performance-related pay award scheme, as set out in the tables below:

 

COST Savings	£
New Care Home (Care for Medway financing costs*)	300,000
Climate Change Officers (removal of posts)	186,738
3.5% Staff Pay Award (removal)	4,728,000
Staff vacancy freeze	1,200,000
Total savings	6,414,738

*this will remove £2.7million per annum for financing costs for future years.

 

NEW Spend	£
£1,000 flat rate staff pay award	3,600,000
Highways Maintenance Revenue Budget*	2,814,738
Total new spend	6,414,738

*this new spend will be to supplement road repairs and resurfacing works only, prioritising works on neglected residential streets, representing a 563% annual increase compared to budgeted internal funding allocation of £500,000.

 

NEW Staff Performance Award: The ‘499 Scheme’ (£499 per staff for 4.99% departmental saving)	£
Total savings if all departments made 4.99% saving	26,135,225
Total spend if all staff awarded £499 performance bonus	1,816,360
Total maximum potential net saving*	24,318,865

*in all circumstances the cost of the incentive versus the savings that could be generated would be positive, generating a net saving.”

 

Amendment to recommendation 1.5

 

“Approve Note the recommendations of the Cabinet on 10 February 2026 of a 3.5% increase for all staff on MedPay terms and conditions, which includes those on MedPay Performance, Progression Pay Scheme as well as those who are on the legacy scheme, recognising that CPI increased to 3.4% in December, and instead approve a £1,000 flat rate staff pay award and the introduction of the ‘499 Scheme’.”

 

New recommendation 1.20

 

“Remove Care Home (Care for Medway) from the Capital Programme, saving £44million.”

 

Amended and new recommendations read:

 

Amendment to recommendation 1.2

 

“Approve the general fund gross, income and net revenue estimates as summarised in Table 1 of this report in the sum of £523.752million, subject to reallocating total savings of £6,414,738 for new spend on a £1,000 flat rate staff pay award, an increase of the Highways Maintenance Revenue Budget of £2,814,738 (representing a 563% increase in allocation), and the introduction of the ‘499 Scheme’ - a staff performance-related pay award scheme, as set out in the tables below:

 

COST Savings	£
New Care Home (Care for Medway financing costs*)	300,000
Climate Change Officers (removal of posts)	186,738
3.5% Staff Pay Award (removal)	4,728,000
Staff vacancy freeze	1,200,000
Total savings	6,414,738

*this will remove £2.7million per annum for financing costs for future years.

 

NEW Spend	£
£1,000 flat rate staff pay award	3,600,000
Highways Maintenance Revenue Budget*	2,814,738
Total new spend	6,414,738

*this new spend will be to supplement road repairs and resurfacing works only, prioritising works on neglected residential streets, representing a 563% annual increase compared to budgeted internal funding allocation of £500,000.

 

NEW Staff Performance Award: The ‘499 Scheme’ (£499 per staff for 4.99% departmental saving)	£
Total savings if all departments made 4.99% saving	26,135,225
Total spend if all staff awarded £499 performance bonus	1,816,360
Total maximum potential net saving*	24,318,865

*in all circumstances the cost of the incentive versus the savings that could be generated would be positive, generating a net saving.”

 

Amendment to recommendation 1.5

 

“Note the recommendations of the Cabinet on 10 February 2026 of a 3.5% increase for all staff on MedPay terms and conditions, which includes those on MedPay Performance, Progression Pay Scheme as well as those who are on the legacy scheme, recognising that CPI increased to 3.4% in December, and instead approve a £1,000 flat rate staff pay award and the introduction of the ‘499 Scheme’.”

 

New recommendation 1.20

 

“Remove Care Home (Care for Medway) from the Capital Programme, saving £44million.”

 

In accordance with Rule 12.5 of the Council Rules, a recorded vote on the amended proposal was taken.

 

For – Councillors Finch and Vye (2)

 

Against – Councillors Anang, Animashaun, Bowen, Brake, Browne, Campbell, Clarke, Cook, Coombs, Curry, Etheridge, Fearn, Field, Filmer, Gilbourne, Gulvin, Gurung, Hackwell, Hamandishe, Hamilton, Howcroft-Scott, Hubbard, Hyne, Jackson, Jones, Joy, Kemp, Lawrence, Mahil, Mandaracas, Maple, McDonald, Murray, Myton, Nestorov, Nestorova, Peake, Pearce, Perfect, Louwella Prenter, Mark Prenter, Price, Sands, Shokar, Spring, Stamp, Tejan, Mrs Turpin, Van Dyke, Wildey and Williams. (51)

 

Abstain – None

 

The amendment was lost.

 

Note: In addition to the Councillors named under the Apologies for Absence agenda item, Councillor Paterson was not present for the recorded vote.

 

In accordance with Rule 12.5 of the Council Rules, a recorded vote on the Leader of the Council’s proposal was taken.

 

For – Councillors Animashaun, Bowen, Browne, Campbell, Cook, Coombs, Curry, Field, Gurung, Hamandishe, Hamilton, Howcroft-Scott, Hubbard, Jackson, Jones, Mahil, Mandaracas, Maple, McDonald, Murray, Myton, Nestorov, Nestorova, Peake, Louwella Prenter, Mark Prenter, Price, Shokar, Stamp and Van Dyke (30)

 

Against – Councillors Anang, Brake, Clarke, Etheridge, Fearn, Filmer, Finch, Gilbourne, Hackwell, Hyne, Joy, Kemp, Lawrence, Pearce, Perfect, Sands, Spring, Tejan, Mrs Turpin, Vye, Wildey and Williams. (22)

 

Abstain – None

 

On being put to the vote the proposal was agreed.

 

Note: In addition to the Councillors named under the Apologies for Absence agenda item, Councillors Gulvin and Paterson were not present for the recorded vote.

 

Decision:

 

a)    The Council approved the general fund gross, income and net revenue estimates, as summarised in Table 1 of the report in the sum of £523.752million.

 

b)    The Council noted the following recommendation of the Employment Matters Committee on 28 January 2026, as set out in paragraph 5.1 of the report:

 

‘an increase for all staff on MedPay terms and conditions, in line with inflation, which includes those on MedPay Performance, Progression Pay Scheme as well as those who were on the legacy scheme.’

 

c)    The Council agreed the following recommendation of the Employment Matters Committee on 28 January 2026, as set out in paragraph 5.1 of this report:

 

‘To not return to the National Joint Council (NJC) pay scales currently but keep negotiations open on this matter and do a joint piece of work on impact and cost assumptions.’

d)    The Council approved the recommendations of the Cabinet on 10 February 2026 of a 3.5% increase for all staff on MedPay terms and conditions, which included those on MedPay Performance, Progression Pay Scheme as well as those who were on the legacy scheme, recognising that CPI increased to 3.4% in December.

 

e)    The Council approved the recommendations set out at section 12 of the report with regard to the Housing Revenue Account and detailed in the following appendices:

 

i)      The proposed increase in rents as set out at Appendices 5A and 5B;

ii)     The proposed service charges as set out at Appendix 5C;

iii)   The budget proposed as summarised at Appendix 5D;

iv)   The 30 year business plan projections at Appendix 5E.

 

f)      The Council approved the additions to the Capital Programme set out in Table 14 of the report.

 

g)    The Council agreed to delegate authority to the Chief Operating Officer, in consultation with the Leader, to add further borrowing of up to £1.0 million to the capital programme, as a one third contribution towards any schemes approved by the Football Foundation, as referenced at paragraph 11.10 of the report.

 

h)    The Council noted the Kent Police and Crime Commissioner’s precept requirement, as set out in Section 13.2 of the report.

 

i)      The Council noted the Kent Fire and Rescue Service precept requirement, as set out in Section 13.3 of the report.

 

j)      The Council noted the Parish Council precept requirements of £856,228 detailed in Section 13.4 of the report.

 

k)    The Council approved the basic rate of Council Tax at Band D for 2026/27, before adding the Police, Fire and Parish precepts, at £1,934.33, an increase of 4.994%, as set out in Section 14.1 of the report.

 

l)      The Council agreed to adopt the formal resolution for the Council Tax requirement and schedule of Council Tax charges for 2026/27, as set out in Appendix 6A to the report.

 

m)  The Council approved fees and charges, as recommended by Cabinet as part of the budget proposals, in the booklet 'Medway Council - Fees and Charges 2026/27, as set out in Appendix 7 to the report.

 

n)    The Council agreed to the declassification of the following amounts currently held in earmarked reserves and to transfer them to general reserves:

 

i)      £1,597,513 held in the Collection Fund Reserve,

ii)     £450,000 held in the severance Reserve,

iii)   £750,000 held in the SELEP Reserve, and

iv)   £27,000 held in the Unpresented Cheques Reserve.

 

o)    The Council approved the Flexible Use of Capital Receipts Strategy set out at Appendix 8 to the report.

 

p)    The Council approved the use of £2.783million of capital receipts under flexibilities to fund transformational activity in Adult Social Care and Business Support in 2025/26 and £3.292million in 2026/27.

 

q)    The Council approved the amendments to the Discretionary Non-Domestic Rate Relief Policy at Appendix 10 to the report, including a further amendment in respect of the policy for pubs following the announcement by HM Treasury of further support on 27 January 2026, as set out in section 6.5 of the report.

 

r)     The Council noted the findings of the Diversity Impact Assessment as set out in Appendix 11 to the report, and the proposal to continue, where necessary, to report through quarterly monitoring any further unidentified or unintentional impact.