Otterpool Park Exposed: How Folkestone & Hythe’s 10,000-Home ‘Garden Town’ Is Spending Millions Without Planning Permission

Folkestone & Hythe District Council is gearing up for yet another intense round of work on Otterpool Park – still without an actual planning permission in place, more than two years after councillors first “resolved to grant” outline consent for up to 10,000 homes.

A new Planning Collaboration Agreement with Homes England, draft Heads of Terms for that agreement, and a fresh Otterpool Park LLP budget for 2026–27 show how far the council is prepared to go – financially and politically – to keep the project alive.

At the same time, local watchdog ShepwayVox notes the widening gap between promises and delivery. In its latest Otterpool piece, it sums up the situation in a single, pointed line:

“Folkestone & Hythe is trying to turn a long-promised green light into a legal permission.” 

This article unpacks what the new documents actually say, what the first six-month Collaboration Agreement achieved, and what this means for residents, taxpayers and local democracy.

Where We Are: “Resolution To Grant” But No Decision Notice

The council’s own report OS/25/07 to the Overview and Scrutiny Committee, dated 25 November 2025, sets the scene. It reminds members that:

• Otterpool Park LLP (OPLLP) was established in May 2020 as a wholly owned company of the council to act as master developer. 

• The Planning and Licensing Committee resolved to grant outline planning permission for Otterpool Park on 4 April 2023, but the actual permission has still not been issued. 

In practice, that means the project remains in limbo. The key legal instrument – the decision notice – is being held back until the Section 106 agreement and planning conditions are finalised.

The report acknowledges that Otterpool has now moved into a new and riskier phase. It states that when the draft updated business plan was stress-tested in 2023, the council concluded that funding Otterpool “to the level previously agreed” posed a level of risk it could not reduce “to a tolerable position”. 

That conclusion led directly to the search for a strategic partner and to formal collaboration with Homes England.

The First Collaboration Agreement: Six Months Of Joint Working – And Many Loose Ends

Appendix 1 to OS/25/07 is a detailed “Collaboration Agreement Project Actions” report, dated 31 October 2025. It tracks, line by line, what the six-month Collaboration Agreement (signed in February 2025 and running to the end of October 2025) actually delivered. 

For lay readers, this first Collaboration Agreement was essentially a joint work programme between FHDC and Homes England to:

• re-work the Otterpool financial model and business plan,

• rethink the planning and Section 106 strategy,

• review infrastructure and land, and

• start sorting out exit options and delivery structures.

The RAG register shows three big themes.

Business Plan & Exit Options – Still Unresolved

The report confirms that the baseline financial model has been fully reviewed and a programme agreed and monitored. But when it comes to the core Financial Business Plan and Delivery Strategy, only part of the job has been finished.

The plan is supposed to cover eleven elements, including land draw-down, phasing, infrastructure, delivery options, public-sector enabling, exit options and a summary of ongoing barriers and risks.

By 31 October 2025:

• some elements (including parts of the financial model, infrastructure plan, market feedback and planning strategy) were due to be completed and slotted into the plan by the end of October,

• but crucial sections – including the land draw-down plan, phasing plan, delivery options, public-sector infrastructure opportunities, exit options, draft Section 106 heads of terms and the summary of barriers and risks – are explicitly described as “the subject of ongoing work beyond the conclusion of the current Collaboration Agreement period.” 

On exit strategy, the document is equally blunt:

• “The exit strategy is yet to be fully resolved and will be the subject of ongoing discussion beyond the end of the current collaboration period.” 

In other words, after six months of intensive joint working, neither FHDC nor Homes England yet has an agreed path for how either might safely reduce its exposure or hand the project on.

Public Money To Unlock Private Interest

Perhaps the most striking passage in Appendix 1 concerns public-sector funding. Under Project Action 7, the parties were asked to decide whether public intervention would be needed “upfront prior to securing private sector appetite”. 

The answer could hardly be clearer. The commentary states that it has been agreed between FHDC, Homes England and the consultants that:

“further public sector intervention is going to be necessary to create an appetite for private sector involvement” 

That intervention is expected to include funding for major infrastructure (including the Wastewater Treatment Works), land acquisition and the ongoing planning strategy. 

OS/25/07 reinforces this, noting that Homes England is now preparing a business case for “significant public sector support” to tackle “defined market failure” at Otterpool, with a Strategic Business Case expected in 2026.

The WWTW And The Missing Determination

On infrastructure, the standalone planning application for the Wastewater Treatment Works (WWTW) has been prepared and submitted by OPLLP. The RAG register records that the application “is with Kent County Council to determine” and that “the formal determination date is yet to be confirmed.”

Homes England is “investigating funding the delivery of the WWTW”, with a request for funding anticipated as part of its Strategic Business Case in 2026.

In parallel, the parties have reviewed the infrastructure currently required by the existing resolution and draft Section 106 to identify “potential cost savings” which will need renegotiation with FHDC and Kent County Council.

Communications: A Single Press Release – And Then Silence

One of the project actions was to prepare a communications and engagement strategy “which will consider key stakeholders as well as the public.” 

The reality, as recorded in the RAG commentary, is stark:

“A press release was prepared, agreed between the Parties and released confirming the Collaboration Agreement. It has been agreed that no further engagement has been necessary from a strategic perspective at this time.” 

For a multi-billion-pound garden town proposal with substantial public risk, the formal record that “no further engagement has been necessary” will raise eyebrows well beyond the usual critics.

The New Planning Collaboration Agreement: Racing The Clock To December 2026

With the first Collaboration Agreement expiring at the end of October, the council now proposes a second, more tightly focused Planning Collaboration Agreement with Homes England.

OS/25/07 describes it as “a further period of collaboration, which is specifically focused on securing the outline planning consent for Otterpool Park, by way of entering into a Planning Agreement.” 

The decision to proceed was formally approved by the Leader on 11 November 2025 (Report C/25/49).

Heads Of Terms: What “Success” Looks Like

Appendix 2– the “Working Draft Heads of Terms – October 2025” – sets out the proposed shape of the Planning Collaboration Agreement. It is explicitly “SUBJECT TO CONTRACT AND NOT LEGALLY BINDING” but provides a clear view of what the parties intend.

Two definitions are critical for readers:

“Satisfactory planning permission” is defined as a permission that reflects agreed changes to planning application Y19/0257/FH (based on the October 2025 Planning and Delivery Strategy) and secures “an appropriate solution to the s106”. If the Local Planning Authority insists on signatories to the Section 106 before issuing the decision notice, both FHDC and Homes England must sign. 

Crucially, the document states that:

“The outline planning application does not need to be achieve a market facing return in order to be considered satisfactory.” 

In plain language, the council and Homes England are prepared to accept an outline permission even if it does not, on its face, deliver the sort of commercial return that a private developer would normally expect. That may be understandable for a public-sector-led scheme – but it also underlines how heavily this project leans on public money and public risk.

The “Early Parcel”: Up To 500 Homes With Minimal Infrastructure

The Heads of Terms introduce the concept of an “early parcel” – up to 500 homes that could be delivered in one or more parcels, outside the main Tier 2 process for the outline application. 

The intention is to get bricks and mortar on the ground by 2029, but on a very limited infrastructure offer. The text states that infrastructure upgrades for the early parcel “should be minimal” and focused only on unlocking those homes. It continues:

“The parties will not be required to deliver any site-wide infrastructure upgrades (i.e. transport, WWTW or servicing upgrades) to unlock the early parcel(s).” 

For residents, that raises obvious questions: what roads, public transport, schools, health facilities or wider utilities will be in place if several hundred homes are built ahead of the main infrastructure?

Timetable And Long Stop Date

Under the Heads of Terms, FHDC and Homes England commit to:

• submit an updated planning application pack within six months of signing the agreement,

• then use “all reasonable endeavours” to secure the grant of planning permission within twelve months after that,

with a final long-stop date of 31 December 2026.

ShepwayVox points out that this effectively extends the FHDC–Homes England partnership for another year beyond the original six-month agreement, “to keep the agency at the table until the outline planning decision is issued—with a hard long-stop of 31 December 2026.”

Who Pays: Cost Caps, Budget Lines & Local Exposure

The funding clauses in the Heads of Terms are unusually explicit about who picks up the bill.

Cost Share With Homes England

Future costs related to the Planning Collaboration Agreement – including consultancy, pre-application fees, Planning Performance Agreement fees, legal fees and any Tier 1 site-wide strategies needed for the early parcel – will be shared between the parties in proportion to their land ownership. 

The document states that “Homes England would contribute 10.7% with FHDC contributing the remaining 89.3%.” 

A development budget “capped at £2.266 million” is to be prepared by OPLLP and agreed by the Tier 1 Collaboration Board, with the cap only increaseable by written agreement of both parties and then by “no more than 10% of the original amount.” 

In round terms, that means:

• a baseline ceiling of about £2.27m,

• potentially rising to roughly £2.5m if the 10% uplift is used,

• of which around nine-tenths would be shouldered by FHDC.

These are on top of past Otterpool spending and do not include the infrastructure and land-acquisition funding that Homes England may eventually be asked to provide.

The Otterpool Park LLP Budget for 26/27

The new Planning Agreement doesn’t sit in a vacuum. OPLLP itself is asking for a sizeable operating budget for 2026–27.

OS/25/07 states that:

“The budget requested is £2,802,327 and is summarised in the table below:” 

The breakdown shows:

• Planning & Project Management – £1,108,800

• Communications – £8,400

• Site Responsibilities – £189,400

• JV Procurement – £60,000

• Infrastructure design – £20,000

• Salaries, Governance and overheads – £1,160,970

• Contingency (10%) – £254,757

• Total – £2,802,327 

This budget is to support both the ongoing work of OPLLP as master-planner and the additional load from the Planning Collaboration Agreement, running through to December 2026. It remains draft until the council agrees its 2026–27 budget in February 2026, but it signals clear intent.

For a project where – as ShepwayVox noted back in July – not a single Otterpool home has yet been built, but the council is “exposed to £50 million risk”, the decision to commit further multi-million-pound budgets is politically sensitive. 

Governance: Who Is Actually Steering The Ship?

The governance structure under the new Planning Collaboration Agreement closely mirrors that of the first.

The Heads of Terms confirm:

• Named organisational leads: FHDC – Susan Priest; OPLLP – Ewan Green; Homes England – TBC. 

• A Tier 1 Otterpool Park Collaboration Board with 2–3 representatives each from Homes England and FHDC, including the nominated leads. Chairmanship rotates between the two, and “both Parties will have equal voting rights.” The board is responsible for all “strategic decisions” about delivering the agreement’s outputs.

• A Tier 2 group of key consultant workstream leads, OPLLP, FHDC and Homes England, chaired by the OPLLP lead, meeting fortnightly or monthly to monitor progress and make recommendations.

• Tier 3 workstreams made up of OPLLP, FHDC, Homes England and appointed consultants, delivering the detailed outputs. 

OPLLP remains the formal applicant for the main planning application Y19/0257/FH and will “have responsibility for delivering the outputs of this collaboration agreement.” It will manage the programme and budget and provide strategic direction to consultants and to Homes England at Tiers 2 and 3, reporting regularly back to Tier 1.

OS/25/07 also notes that a Joint Operations Board has been established between the council (as client) and the LLP “in order to ensure key matters affecting delivery of the project are fully considered.” 

For lay readers, the net effect is that:

• strategic control over Otterpool’s next phase sits primarily with a small officer board split between FHDC and Homes England;

• OPLLP, though wholly owned by the council, operates more like an internal development company than a directly elected body;

• councillors are engaged via the Overview and Scrutiny Task & Finish Group, which OS/25/07 records as having given its “full” endorsement to the new Planning Agreement’s approach.

How This Looks From The Outside: Shepway Vox, SNRG And National Headlines

From outside the council, the picture looks rather different.

ShepwayVox’s latest Otterpool article (7 November 2025) frames the new Planning Agreement as the council’s attempt to “turn a long-promised green light into a legal permission”, stressing that the original six-month Collaboration Agreement ran to its “extension cutoff” on 31 October 2025, and that a new, “purpose-bound” Planning Agreement is now proposed to keep Homes England at the table until late 2026. 

Earlier in the year, ShepwayVox highlighted the council’s exposure to Otterpool-related borrowing and guarantees in a piece headlined “Council Exposed to £50 Million Risk, Still No Homes Built.”

In August, it reported that Otterpool Park LLP had signed an exclusive deal with energy firm SNRG “before legal review”, raising governance questions that have since been echoed in national coverage.

The Guardian, meanwhile, has reported enthusiastically on Otterpool’s ambition to be an all-electric town whose homes and solar farm act as a “virtual power plant” feeding power back to the grid, with construction proposed to start in 2027. 

Taken together, the documents and the commentary paint a complex picture:

• Nationally, Otterpool is being presented as a futuristic, green, all-electric exemplar.

• Locally, the council is still wrestling with unresolved exit strategies, unfinished business plans, Section 106 renegotiations and a missing decision notice.

• The expert verdict from the Collaboration Agreement workstreams is that “further public sector intervention” is required to attract private developers at all.

What It Means For Residents & Taxpayers

For residents who do not live and breathe planning jargon, three plain-English points stand out.

Permission Still Not Granted

Despite the “resolution to grant” in April 2023, Otterpool still does not have a formal outline planning permission. That depends on finalising and signing a complex Section 106 agreement and on issuing a decision notice. Until that happens, the project remains at risk from policy changes, political shifts and market conditions.

More Public Money, With More To Come

The first Collaboration Agreement has already led to extensive further work, much of which continues beyond October 2025. The new Planning Agreement is capped at around £2.27m (potentially £2.5m) in joint costs, nearly 90% of which sit with FHDC. 

On top of that, OPLLP is seeking a £2.8m budget for 2026–27, heavily weighted towards staff, project management and governance. 

And beyond that, both FHDC and Homes England acknowledge that major public-sector infrastructure and land-acquisition funding will be needed to make Otterpool attractive to the private sector at all.

Early Homes Before Full Infrastructure

The proposed “early parcel” of up to 500 homes is explicitly designed to require only “minimal” infrastructure upgrades, with no obligation on the parties to deliver wider transport, WWTW or servicing upgrades to unlock those first homes. 

If that approach is followed, the first Otterpool residents could find themselves living in a partially-serviced site, with some key facilities and networks still years away.

A Yes Leader Moment

If all this feels complicated, imagine the briefing note landing on the Leader’s desk.

Cllr Jim Martin: “So let me get this straight, Dr Priest. We resolved to grant permission two years ago, but we still haven’t actually granted it.”

Dr Susan Priest: “Precisely, Jim. We have granted permission in principle not to grant permission until the conditions for permission have been permissively perfected.”

Ewan Green: “And in the meantime, Jim, we’re collaborating with the housing agency to pay consultants to write a plan to secure the permission we’ve already almost got.”

The joke, of course, writes itself. But the real Otterpool papers are no comedy. They set out, in careful official wording, a project which:

• is central to the council’s stated vision of a “sustainable new garden town”,

• carries significant unresolved risks,

• requires increasing amounts of public money and public-sector intervention,

• and still has no homes built and no decision notice in place.

How councillors choose to balance those risks against the promised benefits – new homes, jobs, and a flagship green development – will be one of the defining local decisions of this council term.

The Shepway Vox Team

Discernibly Different Dissent