Otterpool Park Update: Millions Budgeted While Outline Permission Still Unissued; Homes England Recognises ‘Market Failure’ as 31 Dec 2026 Long-Stop Nears

By any normal measure, a council that “resolved to grant” outline planning permission, in April 2023, for a new settlement of this scale (8,500 homes) would be sprinting towards the starting gun. Yet two and a half years after Folkestone & Hythe’s Planning & Licensing Committee backed Otterpool Park in principle, the scheme still lacks the one document that turns a vote into a lawful permission: the Decision Notice. Until that notice is issued, the project remains suspended between ambition and reality — and, crucially, exposed to politics, markets and changing conditions. 

That was the uncomfortable backdrop to the Overview & Scrutiny Committee meeting on Tuesday 25 November 2025, where councillors were asked to note an Otterpool Park LLP Transition Plan and a proposed operating budget of roughly £2.8m for 2026/27, while also digesting a new “Planning Collaboration Agreement” with Homes England designed to get the outline consent over the line by a long-stop date of 31 December 2026. 

First, what “resolved to grant” actually means (in plain English)

A “resolution to grant” is essentially planning permission in principle, but it is not the final legal permission. The council can’t issue the decision notice until the Section 106 agreement (the binding contract covering infrastructure contributions and obligations) and various planning conditions are agreed and signed. In Otterpool’s case, members heard that the sticking point is not simply paperwork: it is a live negotiation—especially with Kent County Council—over the price tag and structure of the Section 106 package. 

Cllr Jim Martin (Leader of the Council and cabinet member for Otterpool Park) was blunt: the 31 December 2026 “deadline” is, in his words, “plucked out of the air” — a long-stop date rather than a desired date. He suggested the real variable is cost: “we could agree the 106 next week if we were prepared to pay… an enormous amount of money.” 

Homes England: from broad collaboration to a narrower, time-limited “planning push”

The council and Homes England first entered a Collaboration Agreement beginning 1 February 2025 (originally six months, with an extension mechanism). The council publicly framed Homes England’s role as bringing expertise and funding capacity to “accelerate the delivery” of Otterpool Park, including updated delivery strategy, phasing, planning strategy and infrastructure cost planning. 

By late 2025, that relationship is being tightened into something more sharply targeted: a time-limited Planning Collaboration Agreement focused on getting outline planning consent issued and enabling an “early parcel” of housing. The working draft Heads of Terms (marked “SUBJECT TO CONTRACT AND NOT LEGALLY BINDING”) sets the pace: submit an updated planning pack within six months, try to secure permission within twelve months, and stop no later than 31 December 2026. 

At the Scrutiny meeting, Paula Hurst (independent chair of the Otterpool Park LLP board – pictured) told councillors Homes England now accepts there is “market failure” in delivering the scheme “as it currently stands”, and that government support will be needed — meaning a funding/business case must be developed, underpinned by detailed modelling and scenario-testing already carried out. 

If you strip away the jargon, the message is stark: Otterpool, as designed and costed, does not currently work on private-sector terms without public intervention.

The money question: who pays, and how much risk sits locally?

Here the documents are unusually explicit.

Under the draft Heads of Terms, future costs for the planning-focused work programme (consultants, legal, planning performance agreements, and any Tier 1 site-wide strategies needed to unlock early housing) are shared by landholding. Homes England would pay 10.7%, Folkestone & Hythe would pay 89.3%. 

And there is a cap: total joint spend under the collaboration agreement is capped at £2.266m, with any uplift only possible by written agreement of both parties and limited to 10% of the original amount. 

For residents, the headline is simple even if the contract language is not: the council is carrying roughly nine-tenths of the planning-stage bill.

Why keep spending if you still don’t have the permission?

Because, as members were repeatedly reminded, this is a “lock-up” project: huge up-front infrastructure costs must be swallowed before a single home sale can repay them.

Cllr Jim Martin put figures to that “lock-up”: he cited £26m for a wastewater treatment plant and £11m for a station, plus major roads and other infrastructure. The scheme may be profitable over decades, he argued, but it needs public money to climb the peak of early costs.

 

ShepwayVox, surveying the same situation, points to a key admission in the council’s own narrative: when the draft updated business plan was stress-tested in 2023, the council concluded that funding Otterpool “to the level previously agreed” carried a risk it could not reduce “to a tolerable position.” (That is the logic behind seeking a strategic partner and the turn to Homes England.) 

The bigger reason for delay: planning consent could trigger land-option bills

Perhaps the most revealing moment of the Scrutiny discussion was not about planning at all, but about land finance.

Cllr Jim Martin (pictured) explained why the council has, in effect, hesitated to cross the line from “resolution to grant” into legally issued outline permission: he said that step would “trigger all of the option agreements to be paid within one year,” involving an “enormous amount of money.” In other words, finalising the permission could crystallise land-purchase liabilities the council cannot safely meet without the funding solution already secured. 

That framing changes how the public should read the last two years. This isn’t merely an administrative delay. It’s a political and financial strategy: hold the legal permission back until the funding and land acquisition route is credible.

The “early parcel” gamble: 500 homes before the big infrastructure

The new Planning Collaboration Agreement is explicitly designed to unlock “early homes.” The Heads of Terms defines an “early parcel” of up to 500 homes that could be delivered in one or multiple parcels, with infrastructure upgrades “minimal” and focused only on unlocking those early parcels — with no requirement, at that stage, to deliver site-wide transport upgrades, the wastewater treatment works, or wider servicing upgrades. The stated purpose: deliver residential properties by 2029.

This is where Scrutiny members’ instincts sharpened.

Councillor Rich Holgate (pictured) raised the obvious local fear: even if there is technical “capacity” in sewerage for a few hundred homes, villages do not have spare capacity in roads, GP appointments, or other services. “There comes a trade-off,” he warned, “and a consequence… on our residents.” Cllr Martin agreed nervousness was justified, adding that an essential new road would be a prerequisite and that early delivery creates “other problems.” 

The implications are two-fold:

1. Politically, early housing is the visible proof of life that helps keep Whitehall attention and investor patience.

2. Practically, it risks replicating the pattern communities hate most: homes first, amenities later, with “later” drifting.

Paula Hurst sought to reassure members that the Board would not support an application “where we are aware that the infrastructure is insufficient” for new and existing residents, emphasising the formal planning review process ahead. 

Transparency: “hard to scrutinise” is not a minor complaint — it’s the point of Scrutiny

A recurring theme in the room was not whether Otterpool is a big ambition (members accept it is), but whether councillors and residents can see enough detail to judge if the spending is disciplined.

Councillor Laura Davison (pictured) said it plainly: with only a high-level summary, it was “quite difficult… to scrutinise the budget in any detail.” Later, Councillor Paul Thomas pressed for a breakdown of Tier 1–3 workstreams and clarity on whether figures represented external consultant spend, internal staffing, or both — and queried how an estimated £2.3m cost connected to the £2.8m annual budget line. Officers undertook to circulate more detail after the meeting. 

ShepwayVox’s critique lands in the same place, arguing residents are “entitled to see what has been spent to date, line by line” — consultancy, legal, planning fees — and how much more will be committed before the decision notice is in hand. 

For a project explicitly justified (by the council itself) as underpinning long-term revenue for local services, budget opacity is not a technical quibble. It’s a democratic fault-line. 

Communications: one press release, then… nothing?

If there was one detail likely to anger residents most, it was this: ShepwayVox reports that within the first collaboration programme, a communications and engagement strategy was indeed contemplated, but the record of activity amounts to a single press release — followed by the agreement that “no further engagement has been necessary from a strategic perspective at this time.” 

For a scheme that reshapes parishes from Sellindge to Newchurch (and beyond), the idea that public engagement is “unnecessary” at the strategic level is more than tone-deaf. It risks turning a planning project into a legitimacy problem.

Local government reorganisation: who gets the upside if Otterpool ever pays out?

Then there is the looming constitutional question: local government reorganisation.

Councillor Anita Jones (pictured) asked what happens if the district is folded into a larger unitary authority: after years of local investment, will any future financial “benefits” be diluted across a wider Kent footprint? Cllr Martin did not pretend otherwise: in a larger unitary, he said, “what we don’t want is the benefits… being used to regenerate another part of Kent,” and he signalled an intention to argue strongly for ring-fencing the gains for the immediate community. 

That may become the next political battleground: not only whether Otterpool is deliverable, but who owns its rewards if it is.

A brief “Yes Councillor” moment (imagined, but painfully familiar)

If you wanted to translate the entire evening into a single exchange, it might run like this:

Councillor: “Can we have the detailed numbers?”
Chief Executive Dr Susan Priest (in spirit): “Certainly. The moment they are no longer capable of causing misunderstanding.”
Corporate Director Ewan Green: “So… never, then?”
Chief Executive Dr Susan Priest: “Not never, Ewan. Merely not yet.”

The comedy works because the stakes here aren’t funny: once you normalise “millions now, details later” on a project of this magnitude, you train the public to assume they’re being managed, not informed.

What residents should watch next

Three practical tests will tell you whether this is momentum or merely motion:

1. Is there a published, intelligible critical path — showing the planning steps, the Section 106 negotiation milestones, and the dependencies Cllr Martin described (especially the land-option trigger)?

2. Does the council publish a full spend ledger for Otterpool Park LLP and the collaboration workstreams (consultants, legal, planning fees, internal recharges), not as a slogan but as an auditable record?

3. Does “early housing” come with enforceable infrastructure sequencing — so villages don’t become the collateral damage of a speed strategy?

Otterpool Park may yet become the flagship “garden town” promised. But the Scrutiny meeting made one thing undeniable: in 2025, the project’s central challenge is not vision. It is viability, permission, and public trust — in that order. 

The Shepway Vox Team

Not Owned By Hedgefunds or Barons