Princes Parade Write-Off and Oportunitas Valuation Error: Audit Scrutiny Intensifies as Folkestone & Hythe Audit & Governance Meeting Is Postponed

Folkestone & Hythe District Council’s Audit & Governance Committee was due to meet tomorrow evening (Wednesday 17 December, 6pm) to scrutinise the 2024/25 Statement of Accounts and the external auditor’s latest findings. It is now listed as POSTPONED, with a brief note stating the meeting has been “adjourned at the request of the Chair” after consultation with the Monitoring Officer and Head of Paid Service—without any public explanation of why it was pulled at the eleventh hour. That postponement matters because the papers set for that meeting put two long-running, politically sensitive projects back in the spotlight—Princes Parade and Oportunitas Ltd—and, crucially, they show those issues are not just “political rows”, but live questions inside the council’s audited financial statements.

First, the basics: what tomorrow’s meeting was meant to do

The Audit & Governance Committee is the council’s principal public forum for testing whether the authority’s finances are being reported properly and whether governance is working as it should. The key document due to be discussed is the external auditor’s Audit Findings Report (AFR)—the formal summary of what the auditor has found, what remains unresolved, and what might still change before the accounts can be signed off.

In the draft AFR prepared for this cycle, the auditor says the audit is “nearing completion” but flags that several elements were still outstanding at the time of writing—including a specific challenge on Princes Parade disclosures and ongoing work on Level 3 financial assets (which includes the council’s investment in Oportunitas).

(Plain-English glossary: disclosures are the explanatory notes that sit behind the headline numbers; Level 3 means valuations that rely heavily on assumptions rather than observable market prices.)

Princes Parade: from “flagship scheme” to a £3.4m write-off—and a governance warning

The auditor’s annual report is blunt about the direction of travel: the Princes Parade scheme is being “formally closed” after the council concluded it could not meet planning consent requirements, and around £3.4 million of “sunk costs” are expected to be written off in the 2025/26 accounts. 

Again, translate the jargon: a write-off is an acknowledgement that money already spent is not going to produce the asset or benefits originally promised. The cash has gone; the accounting question is when and how the council recognises that reality in its financial statements.

What makes this sharper is not only the scale of the loss, but the auditor’s governance critique. Grant Thornton says the decision may have had “sound rationale”, yet highlights that despite “informal discussions”, there is “no formal documentation of the decision”—and it calls for a formal review so lessons are learned and embedded. 

That observation lands on particularly sensitive ground because Princes Parade has had a long and contentious public life. The council’s own timeline records the prolonged stopping-up process and a Secretary of State public inquiry—an illustration, in the council’s own words, of how procedurally complex the project became. And locally, The Shepway Vox Team has repeatedly framed Princes Parade as a saga of withheld information, late FOI responses, and escalating risk—claims the council would dispute, but which have undeniably shaped public trust around the project. 

Inside the audit paperwork, the financial reporting problem is specific: Princes Parade costs have been carried as an Asset Under Construction (AUC). The auditor says the project was closed in June 2025 after consultation, with an “exceptional item” expected in 2025/26 to write off the AUC—yet the auditor is also testing whether there were impairment indicators at 31 March 2025 that might require the asset to be written down earlier, and whether a contingent liability should be disclosed.

(More glossary, briefly: impairment means an asset’s value on the balance sheet is no longer realistic and must be reduced; a contingent liability is a possible future cost—often linked to legal or contractual exposure—that must be disclosed even if it isn’t certain yet.)

The result is an uncomfortable headline: Princes Parade is no longer simply a planning controversy; it is an audit and accounting controversy too—with knock-on effects for transparency, timing, and public accountability.

Oportunitas Ltd: a £3.57m error in valuation—and auditors still waiting on disclosure updates

The second flashpoint is Oportunitas Ltd, the council’s wholly owned housing and regeneration company. Oportunitas’ own published accounts describe it as a wholly owned subsidiary of the council, operating in housing and regeneration. 

The council’s Investment Strategy also describes Oportunitas as a “housing and regeneration subsidiary company” and records substantial lending to it (for example, showing £6.4m owed at 31 March 2024 in one table).

So Oportunitas matters to residents for a simple reason: it is part of the council’s wider financial footprint—its debts, its assets, and its risks.

Now to the audit issue. The AFR sets out a prior period error in the council’s valuation of its equity investment in Oportunitas:

• For 31 March 2024 the investment was valued at £734,000.

• During the following valuation work, the council’s adviser (Arlingclose) identified errors: the discount rate was applied incorrectly and applied to interim cash flows rather than a full year.

• Correcting those inputs produced a revised fair value of £4.3m—meaning the investment had been understated by £3.57m in the 2024 accounts.

• The auditor says the misstatement is material and qualifies as a prior period adjustment under IAS 8 (the accounting rulebook for errors and restatements). 

In plain terms: this is not a rounding error. It is a multimillion-pound swing in how the council reports the value of its stake in its own company—driven by assumptions and technical modelling, not a simple market price.

And there’s a further sting: the auditor says its work is “not yet concluded” because it still needs to review updated disclosures in the draft statements. In the same audit pack, the status slide flags ongoing work on “L3 Financial Assets and Liabilities” (which includes Oportunitas) as still in progress.

This is exactly why auditors treat these valuations as higher risk. The council’s audit plan explains that Level 3 valuations “lack observable inputs” and are sensitive to changes in assumptions—so they require special audit attention.

Outside the formal audit world, Oportunitas has been a recurring focus of local scrutiny for years. The Shepway Vox Team has published multiple investigations alleging “paper gains”, debt-restructuring effects, and weak real-world returns—arguments presented in strongly critical terms and not endorsed by the council, but frequently cited by campaigners who believe the company has become a case study in opaque local-state capitalism.

The AFR does not adopt that rhetoric. But it does something arguably more damaging in the long run: it shows that even the basic measurement of the council’s Oportunitas investment has required a major correction, and that the audit file is still awaiting disclosure updates before the auditor can conclude.

The thread that links both: documentation, transparency, and democratic timing

Put Princes Parade and Oportunitas together and a theme emerges from the official audit papers:

1. Big decisions, big numbers: £3.4m to be written off on Princes Parade; £3.57m restatement on Oportunitas valuation.

2. High-judgement accounting: impairment, contingent liabilities, and Level 3 valuations are exactly the areas where robust documentation and clear disclosure matter most.

3. Governance strain: the auditor explicitly criticises the lack of formal documentation around closing Princes Parade, even while accepting there may be a rational basis for the decision. 

4. Public scrutiny disrupted: the very committee meeting set to air these issues has been postponed—with no public explanation beyond a procedural note. 

For residents, the democratic point is simple. You don’t need to be an accountant to grasp what’s at stake: when a council loses millions on a major project or has to restate the value of a council-owned company, the public deserves a timely, properly minuted, properly evidenced explanation—discussed in public, not pushed off-stage.

What now?

If the council wants to stabilise public confidence, it should do three straightforward things quickly:

• Publish a clear reason for postponing the Audit & Governance Committee meeting and confirm when it will be reconvened. 

• Put formal decision papers on record for Princes Parade’s closure, not merely informal discussions, and publish the “lessons learned” exercise the auditor has recommended. 

• Explain Oportunitas valuation movements in plain English—what changed, why it changed, what assumptions drive the number, and what that means for the taxpayer exposure (alongside the loan position already disclosed in the council’s own investment reporting).

Until then, tomorrow evening’s postponed meeting is likely to be read by many residents as a grim metaphor: the moment scrutiny was scheduled, the shutters came down—leaving two of the district’s most controversial financial stories still waiting for a proper public reckoning.

The Shepway Vox Team 

The Velvet Voices of Voxatiousness