Folkestone & Hythe District Council Spent £3.1 Million Outside Contract Rules, Records Reveal

Calls are mounting for Grant Thornton the external auditors to intervene at Folkestone & Hythe District Council, after new evidence emerged of more than £3.1 million in irregular and unauthorised spending — a figure that breaches legal audit thresholds and raises urgent questions over financial management.

The revelations centre on two categories of expenditure:

• £1.35 million in payments to suppliers with no corresponding contracts recorded — or where suppliers were paid significantly more than their registered contract value — in breach of the Council’s Constitution and with no public explanation provided; and

• £1.74 million in formal procurement waivers, admitted by the Council’s Chief Financial Officer in a recent report to the Audit & Governance Committee.

In our previous report, the value of financial and contractual irregularities stood at £380,654. Since completing a full reconciliation of the 2024–25 contract register against supplier payments, that figure has now grown to £1.35 million — exposing the full scale of a procurement system that appears to be out of control.

Together, these figures paint a picture of a procurement system within the Council in total disarray — and a governance culture that appears unresponsive to repeated warnings from the internal audit, and external observers.

Contracts Missing, Overspends Unexplained

An extensive reconciliation exercise — comparing the Council’s published contract register to its 2024–25 payments data — revealed suppliers were paid sums exceeding £5,000 without a single contract being recorded.

One builder was paid over £117,000, another care provider over £80,000, and a legal firm received £26,000 — all without any trace in the Council’s statutory contracts database.

Other cases were more peculiar still: Experian Ltd, a global credit rating agency, received a payment of £3,291.23 — allegedly for clearing blocked drains.

One listed charity, Creative Folkestone, received payments totalling £141,315.51, despite its contract being recorded at just £78,824. The overspend of £62,491.51 raises questions over contract management and financial controls.

£1.74 Million in Waivers – and No Sign of Control

In a separate disclosure, the Council’s Section 151 Officer admitted to issuing £1,74 million worth of waivers in 2024–25 alone — effectively allowing procurement thresholds to be bypassed without competition or oversight.

While waivers can be legally justified in specific cases, such extensive use — alongside unrecorded contracts — suggests a culture of routine circumvention, rather than exception-based governance.

Audit Standards Breached – and the Law Demands Action

Under the ISA (UK) Auditing Standards, external auditors must assess materiality both by size and by nature. In this case, both criteria are fulfilled:

• By value, £3.1 million is far above materiality thresholds for a council the size of Folkestone & Hythe.

• By nature, the consistent failure to comply with legal and constitutional procurement requirements — including contract recording duties under Part 10 – Financial Procedure Rules Contract Standing Orders — qualifies as systemic non-compliance.

Clause 5.4 of the Constitution is explicit:

That standard has been repeatedly and demonstrably breached.

A Culture of Promises, Not Practice

In December 2022, the Council’s Chief Executive promised staff will receive mandatory training and Part 10 of the constitution states:

Chief officers must ensure that their staff receives relevant financial training that has been approved by the Chief Finance Officer (S151 Officer).

That promise, however, appears to have gone unfulfilled. Internal audit recommendations have been made — but not implemented. And while policy exists on paper, enforcement in practice appears non-existent.

As one finance expert we spoke to commented:

“You don’t get £3.1 million in irregularities from oversight. You get it from an organisation that’s simply not being managed properly.”

Public Money, Private Disregard — Time to Go

At the heart of this scandal lies a simple truth: this is public money — taxpayers’ money — and yet those entrusted to safeguard it have treated the rules with open contempt.

When residents miss a council tax payment, breach a planning condition, or overstay in a car park, they are met with fines, enforcement, and legal threats. But inside the Civic Centre, it appears those same rules are treated as optional — especially when it comes to multi-million-pound contracts and financial oversight.

This isn’t just hypocrisy. It is institutionalised arrogance — a textbook case of “do as I say, not as I do.”

Despite repeated internal audit warnings, public scrutiny, and a formal pledge from the Chief Executive in 2022 that these failings would end, they haven’t.
They’ve multiplied. The breaches are bigger. The controls are weaker. The accountability is non-existent.

The Council’s own Constitution is unambiguous. Clause 5.4 of Part 10 states:

“All contracts of a value of £5,000 or more are to be included on the Council’s Contract Register.”

Officers knew this. The Chief Executive – Dr Susan Priest knew this. The Section 151 Officer – Lydia Morrisson knew this. And they let it happen anyway.

This is not just poor governance — it is wilful neglect of legal, financial and ethical obligations. The culture of the Council is eating its strategy for breakfast. Policies exist on paper, but practice is lawless. Public trust has been squandered.

Let us be clear: this is not salvageable under the current leadership.
The time for promises, training pledges, and vague assurances has long since passed.

Those responsible must go.
No ifs. No buts. Go.

The residents of Folkestone & Hythe deserve better. And the longer this failed leadership clings to power, the deeper the damage will run.

The Shepway Vox Team

Dissent is NOT a Crime