FHDC Budget 2026/27: £6m Hythe Pool Spend, Grant Cliff-Edges and Hidden Costs for Residents

Folkestone and Hythe District Council (FHDC) is proposing a budget that pours millions into leisure facilities – including a £6 million refurbishment of Hythe Swimming Pool – while simultaneously finding savings and new income to fill funding gaps, according to documents to go before a special meeting of the Finance and Performance Scrutiny Sub-Committee on the 15 Jan 2026. Council budget papers reveal £6.5 million in new spending proposals offset by £4.1 million in cuts or extra income, leaving a net £2.4 million budget increase. The ambitious outlays on a Leisure Strategy and other projects come as the authority grapples with the end of several external grants, forcing a critical look at services and an apparent slowdown in its house-building program.

Local residents can expect visible investments if the 2026/27 plan is approved. The headline project is the long-awaited overhaul of Hythe Swimming Pool, a popular leisure centre now slated for major upgrades.

The £6 million pool refurbishment – to be funded largely from property developer contributions (Section 106 funds) and capital reserves – is part of a broader £2.4 million “Leisure Strategy” to improve community facilities. “Options [are] currently being explored to refurbish Hythe Pool – funded from S106 and Capital Receipts,” the council’s budget report notes, indicating that detailed plans are still being worked out. Together, the pool and leisure projects dominate the new spending package. They account for roughly £8.4 million of the £10.4 million in proposed capital works, overshadowing dozens of smaller items from park upgrades to IT improvements (as Figure 1 illustrates).

Behind the scenes, FHDC’s finance officers have had to plug significant funding gaps to make this spending possible. In particular, the withdrawal of several Kent County Council grants has blown a hole in the council’s finances. One discontinued County Council funding stream for council tax support leaves a £324,590 shortfall on its own, and when two related KCC grants end the total loss reaches about £600,000. The budget classifies this as new “growth” expenditure – essentially the district must replace the lost external money to maintain services. Similarly, the expiry of UK Shared Prosperity Fund (UKSPF) grants means local programs need local funding or face cuts. Budget item 33 adds £25,000 to sustain five “Cost of Living” hubs and warm rooms after an “end of grant funding for … warm spaces and essential cost of living support to vulnerable residents”. Without this council top-up, three community hubs providing warmth and aid to vulnerable residents would have lost funding entirely in 2026.

Rising service demands are another driver of budget growth. Homelessness prevention, for example, is set to receive an extra £208,700 as the council anticipates higher emergency housing costs. The Housing team also seeks an additional £81,500 for its Private Sector Offer scheme, citing “increased expenditure and mounting pressure … observed throughout 2025”. (These homelessness measures will be backed by government Homelessness Prevention Grant – if those funds come through as hoped.) Even the cost of running the council itself is increasing modestly. After a governance shake-up was shelved, FHDC quietly restored £128,130 for councillors’ special responsibility allowances, reversing a cut made last year. The budget had been reduced in 2024/25 in anticipation of moving to a committee system (which would have meant fewer paid leadership roles), but the council now finds it prudent “to realign the budget with the anticipated full special responsibility allowance” for all roles, including a 3.8% CPI uplift. Another £60,000 is earmarked to cover higher postage costs and first-class mail, after Royal Mail’s service cuts made slower second-class delivery impractical for certain documents.

Figure 2 illustrates the largest areas where the council’s budget is growing. Notably, replacing lost county funding for tax support tops the list, followed by homelessness costs. “If any of the proposed savings are not accepted this would generate budget pressure and create difficulties in setting a balanced budget,” the report warns – underscoring that these growth items must be counter-balanced elsewhere.

To offset these rising costs, FHDC has combed through its operations for savings and new revenue streams. The budget proposes a patchwork of measures, from efficiency cuts to entrepreneurial ventures – some of which will be felt by residents.

On the income side, the council has struck gold in unexpected places. A new advertising contract for bus shelters is set to net a hefty £173,000 a year. The deal with Bauer Media will see commercial ads on local bus stops, with a “full year of income anticipated from advertising (£173,000)” flowing to the council. FHDC is also cashing in on the coast: the construction of 93 beach huts and a seafront café at Greatstone is forecast to bring in £135,000 annually in rent. Likewise, the council’s property team reports an upswing in rental yields from assets at the planned Otterpool Park development – including £70,000 from Folkestone Racecourse land and another £70,000 from leasing out Westenhanger Castle on that site. Even environmental initiatives are contributing revenue: a profit-share deal on new electric vehicle charging points is expected to generate around £10,000 next year.

FHDC is raising fees for some services as well. Notably, garden waste collection charges are going up, which the council predicts will produce £55,000 in extra income from residents’ annual green bin subscriptions. Planning applications will also cost more for those who want a fast-track decision, a new premium service expected to bring in a modest £10,000. These moves follow a broader trend of councils using fees and charges to bolster their coffers amid funding squeezes.

On the cost-cutting side, several vacant staff positions will be left unfilled to save money. A Contract Compliance Officer post (vacant since 2023) is being eliminated, saving about £38,280, and a senior Personal Assistant role made redundant this year removes another £48,680 from the wage bill. The Planning department will freeze hiring a graduate planning officer for 12 months, trimming £34,070 (one-time). In Parks & Open Spaces, managers found £25,000 of slack in the Hythe Swimming Pool’s utility budget – ironically due to lower-than-expected gas and water usage – and have offered up that sum as a permanent saving. Dozens of similar small adjustments (many under £10k each) add up across every service area.

Perhaps most controversially, the council plans to spend £15,000 on reviving its print newsletter, Your District Today, with two issues per year. This new expense is justified on the grounds that “this is an important way to reach residents who do not use digital communications” according to the leader’s request. While a relatively small line in the budget, the move signals that FHDC’s Cabinet is prioritizing direct communication – a decision that may draw criticism if residents perceive the newsletter as council self-promotion. Another new cost generating discussion is £20,000 for cyber insurance, addressing a high-risk gap in coverage for cyber security breaches.

Overall, the savings and income measures (see Figure 3) total £4.1 million, helping neutralize the bulk of the new spending. They range from the entrepreneurial – like monetizing assets and advertising – to belt-tightening measures like removing redundancies and scaling back programs. The largest single boost comes from the advertising deal, followed by the beach hut rentals. Together, the top five revenue or savings initiatives contribute roughly £0.5 million back to the budget. Dozens of smaller cuts and fee hikes contribute the rest.

While the General Fund (day-to-day services) sees a net budget increase, the Housing Revenue Account (HRA) – which funds council housing – is set to shrink next year. The HRA capital program will be cut by a net £4.6 million, largely due to one major adjustment: FHDC is slowing down its council house building plans. According to the budget report, “They total a net reduction of £4.6 m… This includes the new builds programme which has been re-aligned to reflect £5.3 m movement due to project delays”. In plain terms, around £5.34 million earmarked for new council homes has been pushed back because projects are not moving as quickly as initially scheduled. Such delays are described as “normal in the course of the annual review of the HRA pipeline”, but the impact is tangible: planned investment in new affordable homes will be lower this coming year than hoped.

The HRA will instead focus on improving existing housing stock and tenant services. For example, the council plans to spend £700,000 replacing old kitchens and £320,000 on bathroom upgrades in its properties, aligning with long-term maintenance schedules. An energy-efficiency project at Bradford Court – upgrading a communal heating system – gets a £500,000 capital injection (matched by another £500k grant) to help “provide heating and hot water controllability” and reduce tenants’ energy bills. FHDC is also allocating £100,000 for servicing new solar panels and heat pumps installed in council homes, noting that “these are specialist works that could not be covered by existing… contractors”. And in a nod to its climate and community goals, the budget puts £15,000 toward housing estate tree planting – a project intended to “increase [the] tree canopy in the district (in line with the Council’s Green agenda) and improve… neighbourhood and tenant relations”. “We would otherwise be unable to take forward [the] housing tree planting project” without this funding, the document stresses.

On the housing services side, tenants may see improved oversight and support. The council is creating a New Tenancy Compliance Officer post (£51,580) to enforce upcoming private rental standards under the Renters’ Reform Bill. It’s also hiring an Environmental Protection Officer (£56,000) to strengthen enforcement on issues like noise and pollution, and making a part-time housing officer full-time to bolster private sector housing work. These additions reflect regulatory pressures – and they come at a cost – but are aimed at protecting residents’ welfare.

Local reaction to the budget will likely mix praise for the high-profile investments with concerns about the behind-the-scenes cuts. A £6 million rejuvenation of Hythe Pool, for instance, is broadly welcomed, as is new playground refurbishments and green initiatives. Yet the need to raise fees and rely on advertising will be viewed more critically. And for those in desperate need of housing, news of a £5 million housing development delay is exceedingly worrying, even if temporary. FHDC’s challenge is to communicate that the delays are a timing issue rather than a cancellation – something it will hope the new council magazine can help explain.

Next steps: These budget proposals are to be presented to the Finance & Performance Committee on January 15, 2026 (Report OS/25/08) and are subject to further scrutiny. The committee will “forward any comments to Cabinet” before a final budget is agreed. The full council is expected to debate and approve the 2026/27 budget in February. Until then, the numbers – and the tough choices behind them – are sure to be an object of keen public interest and debate.

The Shepway Vox Team

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