Oportunitas Ltd: Debt, Valuations & Failures at Folkestone & Hythe District Council
Established in 2014 as a wholly owned company of Shepway District Council (now Folkestone & Hythe District Council), Oportunitas Ltd was intended to be a bold municipal intervention: a commercial entity designed to deliver market rate rented housing while generating a financial return for the public purse. A decade later, that promise lies in tatters. An in-depth examination of Oportunitas’s statutory accounts from 2015 to 2024, together with its original shareholder agreements, governance documents, and latest five-year business plan (2025–30), reveals a company sustained not by commercial acumen but by taxpayer-backed loans, speculative revaluation gains, and a culture of opacity that defies the public interest.
In a report by the Parliamentary Public Accounts Committee, the risks of local authority commercial ventures are starkly stated:
“We are concerned that the Department for Communities and Local Government (the Department) appears complacent about the risks to local authority finances, council tax payers and local service users resulting from local authorities increasingly acting as property developers and commercial landlords with the primary aim of generating income.”
The Committee further warns:
“We are also concerned that some authorities might lack the necessary commercial skills and experience amongst both members and officers. If commercial decisions go wrong, council tax payers will end up footing the bill and other services will be under threat.”
However, from the first set of accounts in 2015 to 2024, Oportunitas has become a highly leveraged vehicle. It began with fixed assets of £766,131 and long-term loans of £812,99. By 2024, fixed assets had grown to £13.68 million, but so too had debt—to £6.37 million. The remaining increase in equity is almost entirely attributable to accounting revaluation gains, not operational profitability.
Moreover, the Council restructured the debt in 2023/24, consolidating it into a new £6.37 million long-term loan with interest fixed at 7.26% over 50 years according to the latest Business Plan 2025/26 to 2029/30. While this created an apparent gain of £1.72 million under IFRS 9, this is not real income but a technical accounting adjustment.
However, these gains are purely paper-based, reliant on open market valuations by third-party surveyors. There have been no significant property disposals to test the actual market value of the portfolio.
As of March 2025, Oportunitas’s portfolio consisted of 75 residential properties and one vacant commercial unit at 15 Grace Hill, Folkestone, valued at £13.616 million. That valuation actually marked a year-on-year decrease of £65,000, indicating that the revaluation trend may be reversing, especially in marginal or underperforming assets.
Despite this, the 2025–30 business plan projects no asset sales, no new capital investments, and relies entirely on rental income to sustain operations and pay future dividends. The anticipated rent for 2025/26 is £796,000, and it is indicative that, once overheads, financing costs, and management fees are deducted, the Council may well not make a profit—raising further questions about the long-term viability of the model. This heavy reliance on asset revaluation to maintain a positive balance sheet is risky and unsustainable.
Financial Opacity and Accountability Failures
- Gross rental income
- Void periods and bad debts
- Operating expenses
- Council recharge costs
- Maintenance and capital expenditure
are completely absent from the public domain.
The most recent business plan (2025–30) projects rental income rising from £790,000 in 2024/25 to £844,000 in 2029/30, based on 100% occupancy and 2% annual rent increases. But these figures are unverifiable without profit and loss accounts.
Furthermore, liquidity is weak. In 2024, the company held just £67,953 in cash, while its short-term liabilities were £165,289, leaving it with negative net current assets of £59,008. Despite these risks, no financial risk register or stress-testing documentation is provided to accompany the business plan.
Importantly, the company is not expected to generate a net return surplus until 2028/29, which, while an improvement on previous forecasts suggesting a break-even point of 2030/31, still underscores a concerning delay in financial self-sufficiency after more than a decade of operation.
The Articles of Association require that at least two directors from the ruling group are present for board meetings to be quorate.
This structure blurs the line between arm’s-length independence and political control. Moreover, the Shareholder Agreement outlines objectives such as supporting regeneration, delivering employment opportunities, and increasing housing choice—but the company has published no KPIs or performance indicators to measure progress against these outcomes.
The current 2025–30 business plan contains only financial forecasts and omits non-financial goals such as tenant satisfaction, social impact, or energy efficiency, undermining the company’s social value rationale.
The 2025–30 business plan now assumes full occupancy and income generation from these units. Yet, there is no assessment of net present value, internal rate of return, or a value-for-money review of the project.
Given the significant exposure, the lack of phased acquisition, risk modelling, or exit options highlights serious shortcomings in capital project management. There is no evidence the board scrutinised the development’s evolving financial case before committing capital.
- Interest terms on loans (7.26% as of 2024)
- Staff recharges and internal transfer pricing
- Council-provided grounds maintenance and lettings services
The 2014 Shareholders Agreement required transparency, with Cabinet approval for strategic decisions, yet such scrutiny appears absent in practice. Councillors and the public have no visibility into the real cost of the company’s dependencies on the Council, creating a false impression of commercial autonomy.
Audit reports have failed to flag:
- The company’s dependency on a single funder
- The use of revaluations to maintain solvency
- The lack of published financial performance data
Given the Council’s dual role as funder and regulator, a more rigorous and independent audit process is warranted to protect public interest.
Public Risk, Private Illusion
After eleven years, Oportunitas Ltd stands as a stark local example of the very risks highlighted by the Parliamentary Public Accounts Committee. It is a council-owned company acting as a property developer, sustained not by commercial success but by council loans and optimistic asset revaluations. Despite over a decade of operation, it has never generated consistent profits or paid a meaningful dividend to the public purse.
The Council appears to lack the commercial skills and experience—across both its elected members and senior officers—necessary to manage a venture of this scale. Revaluation gains and accounting manoeuvres have propped up the balance sheet, but they cannot substitute for real revenue or market-tested performance.
The company’s business plan for 2025–30 promises modest future dividends, but these projections are based on best-case scenarios of full occupancy and rent increases. With a decade of under-delivery behind it, such projections must be treated with scepticism. Even optimistic estimates do not project a net surplus until 2028/29.
Folkestone & Hythe District Council must now ask itself a fundamental question: if it cannot make a publicly funded housing company profitable after eleven years, what justification remains for continuing the experiment?
- Mandatory full accounts: Publish profit and loss statements annually.
- Audit rotation: Tender audit contracts at least every 5 years.
- Performance metrics: Disclose occupancy rates, rental income, and arrears.
- Exit strategy: Review asset disposal and dividend policy to realise value.
- Governance overhaul: End use of related party exemptions and strengthen board independence.
Only with these reforms can Oportunitas Ltd begin to earn the trust of the community it was created to serve.
Oportunitas Limited will be discussed at the Cabinet Meeting on the 21 May 2025
The Shepway Vox Team
Not Owned By Hedgefunds or Barons
At 31/03/2024 the Profit and Loss Balance per the filed accounts is £1,790,474. At 31/03/2025 the Profit and Loss Balance per the 2025-30 Budget is £1,359,768. This suggests a loss of £430,706 for the year ended 31/03/2025. Ouch!!