Folkestone Sports Centre: The Sports Trust’s Accounts, FHDC’s £2.4m Grant, and the UK Subsidy Control Questions

A beloved community sports complex in Folkestone is on course for a resurrection after an abrupt closure – but only if a £2.4 million council grant gets the green light. Folkestone Sports Centre, which shut its doors in August 2024 amid financial collapse, was purchased last year by The Sports Trust (formerly Shepway Sports Trust) with help from local philanthropist Sir Roger De Haan. Now, the charity aims to refurbish and reopen the Folkestone Sports Centre swimming pool and related facilities by summer 2026. Councillors will soon debate a one-off capital injection to fund critical works – raising questions about the trust’s financial viability to self-fund the project and whether such public aid could run afoul of subsidy control rules.

The stakes are high for swimmers district-wide. Since the Folkestone centre’s closure, the area’s only public pool has been in Hythe. Reopening Folkestone’s pool would restore a vital amenity for lessons, clubs and families. “There is an urgent need to re-open and improve facilities for swimming in the district,” said Cllr Mike Blakemore, Cabinet Member for Community & Collaboration – pictured, highlighting the council’s focus on community sport. But delivering that goal depends on a complex financing puzzle involving the charity’s coffers, council budgets, and compliance with UK subsidy law.

Financial Autopsy of a Trust on the Edge

An analysis of The Sports Trust’s accounts as a Charity and Company limited by guarantee over recent years paints a sobering picture of a charity that is asset-rich but cash-poor, with very limited unrestricted funds available for new projects. The Sports Trust – which also runs the Three Hills sports park in Folkestone – has managed impressive capital developments, notably the landmark “F51” urban skatepark opened in 2022. However, the charity’s own financial statements show that these projects were almost entirely bankrolled by restricted donations and loans, leaving scant flexible reserves for other uses.

In fact, by August 2020 the Trust’s total funds stood at £8.17 million, but only £192k of that was unrestricted general reserve – the remainder (over £7.97 million) was tied up in restricted funds earmarked largely for the F51 Skate Park. The Trust’s “free reserves” (uncommitted funds available to spend) were a mere £180k at that time. This imbalance only grew as the skatepark project progressed. By August 2021, total funds had swelled to £9.87 million, yet unrestricted reserves shrank to just £143k. In other words, more than 98% of the charity’s funds were locked into specific purposes, not freely spendable on new needs.

The infusion of capital for the skatepark came largely from the Roger De Haan Charitable Trust (RDHCT) – via a combination of **~£6.5 million in grants and an interest-free £4 million loan. This allowed The Sports Trust to build F51, but it also left the charity carrying a large liability. As of the 2020 accounts, an outstanding loan of £4.22 million was owed to RDHCT. The loan is repayable in the long term (reportedly with payback tied to the skatepark’s performance). Notably, a small portion (~£95k) of this loan was later forgiven and reclassified as a donation, highlighting RDHCT’s ongoing support. Even so, the bulk of the £4m loan remains on the books, meaning the Trust’s headline net assets are not the same as free-and-clear money.

Annual accounts show the Trust ran operating deficits once depreciation of the new facility is accounted for. In 2021, it recorded a paper “surplus” of £1.7m, but this was entirely due to one-time grant income for F51. By 2022, with F51 under construction, the surplus was smaller (£737k) and cash in bank had dropped to just £60k. The 2023 accounts then show a deficit of £309,962, as major donations ebbed and depreciation hit the bottom line. At 31 August 2023 the Trust had only £9,734 in cash on hand – effectively nearly running on empty – and even faced net current liabilities of over £100k once short-term debts were counted. While total funds were still about £10.3m, virtually all of that value was embodied in the F51 facility (now completed and reclassified as an unrestricted fixed asset), not liquid assets.

“Total Group funds as of 31 August 2023 amounted to £10,299,580… All funds comprised unrestricted funds, with all restricted monies received in the year having been spent,”

the trustees reported, indicating the skatepark’s completion and the exhaustion of dedicated project grants. In plain terms, by last autumn the charity owned a stunning new skatepark but had no spare cash for new ventures.

These figures raise a blunt question: can The Sports Trust self-fund a £2.4m refurbishment of Folkestone Sports Centre? By all indications, no – not without outside help. The Trust’s free reserves have been hovering in the tens of thousands of pounds, not millions. Its own reserve policy acknowledges the aim of building just £25–50k of free reserves for stability. Day-to-day operations of its existing programmes (sports coaching, community activities, etc.) already rely on donor generosity and small grants – for example, the RDHCT has been making annual general donations (£68k in 2021, £38.5k in 2022) to subsidise the Trust’s operating costs. The Trust is dependent on continuing donations to keep running. It has no accumulated war chest to simply write a £2.4m cheque for the pool project.

In fact, it appears the very purchase of Folkestone Sports Centre in May 2025 was only possible due to Sir Roger De Haan’s philanthropy. The Shepway Vox Team, reported that Sir Roger (the district’s noted benefactor and former Saga tycoon) “passed on money to The Sports Trust to save the much-loved Folkestone Sports Centre”, though the sum was not disclosed. Administrators of the previous Folkestone Sports Centre Trust – which went bust in 2024 – valued the site’s assets around £1.868 million in their statements. It’s likely the acquisition price was in that order of magnitude, implying the Trust itself did not finance the buyout, but rather facilitated the transfer of Sir Roger’s RDCHT donation into the purchase. Without that private rescue, the centre might have been lost to commercial buyers. Even with the property now in The Sports Trust’s hands, the charity must still find funding for renovations. As the Trust conceded in talks with the council, it would need to “look for other income streams including land sales” to fully modernise the ageing facility beyond the pool area. (The 11-acre site includes some surplus land and an old wellness centre that could potentially be sold or redeveloped to raise funds.)

All told, the numbers suggest that The Sports Trust cannot realistically self-fund the £2.4m capital works out of its own pocket. Its balance sheet may boast over £10m in assets, but almost all of that is tied up in immovable capital (the F51 skatepark and now the Folkestone Sports Centre property itself) and encumbered by a large loan. The Trust’s cashflow is tight – at one point in 2023 it had under £10k in the bank – and it has significant ongoing responsibilities to maintain F51 and its sports programmes. Barring a dramatic turnaround or another unanticipated windfall from donors, the Trust simply does not have £2.4m in spare cash or general reserves to undertake the pool refurbishment on its own. That reality is precisely why it has turned to Folkestone & Hythe District Council for assistance.

Council Considers a One-Off £2.4m Grant

Recognising the community importance of the facility, Folkestone & Hythe District Council (FHDC) is actively weighing a plan to step in with a one-time capital grant of £2.421 million to enable the leisure centre’s revival. This proposal is distinct from the council’s past support for the old sports centre. Previously, FHDC had been giving an annual revenue grant of £150,000 to subsidise the centre’s operations. (That three-year funding agreement was in place until 2026, but was rendered moot by the centre’s closure in 2024.) Now, instead of propping up day-to-day running costs, the council is inclined to replace the yearly subsidy with a single capital infusion dedicated to infrastructure upgrades.

According to an official council report published this month, the £2.421m grant would specifically fund “works to enable the re-opening of the swimming facilities” – chiefly the main pool refurbishment, new pool plant machinery, upgraded changing rooms and reception, plus installation of solar panels on the roof. These are the critical investments needed to get the pool back in usable condition and improve energy efficiency, thereby lowering future operating costs. Other parts of the sprawling site (such as the gym, sports hall, or ski slope) are not covered by this grant and would remain for the Trust to address via its own resources or separate funding. In fact, council documents make clear that the grant would only cover the pool and ancillary areas; the Trust would be responsible for finding money elsewhere to renovate or reopen the rest of the facilities beyond the aquatic side.

Crucially, the council’s support is not a done deal. The Overview and Scrutiny Committee will examine the grant proposal on 27 January 2026, offering feedback before it goes to full Council and Cabinet for approval. The funding has been pencilled into FHDC’s draft 2026/27 capital budget, which is set for final agreement in March. No commitments have been made yet to the Trust, officials stress – the decision ultimately rests on budget votes and a formal grant agreement to be approved by Cabinet in late March if the budget is passed.

So far, signals have been positive. Councillors have indicated a “keenness to financially support the re-opening,” The Sports Trust noted after initial talks. Indeed, FHDC’s newly published Leisure Strategy includes the Folkestone Sports Centre grant as a key component, alongside a £6m refurbishment of Hythe Pool (largely funded from developer contributions). In a press release titled “Future of swimming pools under spotlight,” the council openly acknowledged it “has been asked for a one-off £2.4m grant” by The Sports Trust and is considering the request. That statement also clarifies that the capital grant would supersede the previous £150k annual support, effectively trading ongoing subsidy for an upfront investment. The idea is to give the charity a boost to reopen the pool and then let it operate self-sufficiently thereafter – with no more yearly bailouts. As part of that approach, FHDC has made it a condition that “no further revenue grants will be provided” beyond this capital package.

From the council’s perspective, this one-and-done grant has a certain logic. It addresses a public amenity gap (no swimming provision in Folkestone) and potentially saves the council money in the long run – removing the need for perpetual subsidies. If the pool can be modernised to reduce operating costs (hence the solar panels and efficient plant) and if The Sports Trust can leverage its multi-site management experience, the centre might be able to break even once reopened. The alternative – doing nothing – could leave Folkestone residents with a long-term lack of swim facilities or force a far costlier new-build leisure centre down the line. As Cllr Blakemore put it, the council has been “working to create solutions… within the funding we have available” to get swimming back on line.

That said, councillors are not writing a blank cheque. The draft grant agreement includes several safeguards and conditions to protect the public interest. Key provisions proposed include:

• Staged payments: The Trust cannot simply take £2.4m up front. Funds would be drawn down in phases after works are completed, with an “open book” approach to costs. FHDC officers (or appointed surveyors) will verify that each stage of work is done before releasing the money.

• Fixed scope & cap: The grant covers specified pool-related projects, each with a cost limit. If there are any cost overruns, The Sports Trust must absorb them – £2.421m is a hard cap.

• Procurement rules: The Trust will follow competitive tendering similar to council procurement thresholds for the works (e.g. requiring multiple quotes or public tenders above £100k). This ensures value for money for each contract.

• Clawback clauses: If the Trust breaches the agreement – for example, fails to reopen the pool, or closes it again prematurely, or if the charity were to “withdraw from the project” – the council can demand repayment of the grant. Essentially, the money must be used for a sustainable re-opening; otherwise, the public wants its money back.

• Monitoring of public benefit: The Trust will have to provide data on community usage of the pool – swim lesson numbers, club participation, etc. – to demonstrate ongoing public benefit and access.

These terms reflect a cautious approach given the painful history. FHDC wants to avoid a repeat of the scenario where a charitable operator struggles and comes back yearly for handouts or, worse, collapses again. By investing in capital improvements and locking in conditions, the council hopes to “de-risk” the venture: fix the known problems (old plant, leaky roof, high energy costs) and set the facility up to be run viably by the charity. Still, it is a calculated leap of faith – essentially betting £2.4m of taxpayer money that The Sports Trust can make the centre work where the previous trust failed.

Subsidy Control: Walking the Legal Tightrope

One complicating factor is that council largesse to a specific operator can trigger concerns under the UK’s subsidy control rules (formerly known as state aid rules under the EU regime). FHDC’s lawyers have had to consider whether this £2.4m grant might be viewed as an undue market-distorting subsidy – essentially government funding giving one enterprise an advantage in a competitive market. If so, the council must ensure the grant complies with the UK Subsidy Control Act 2022 principles, or else risk legal challenge.

So, could a £2.4m gift to The Sports Trust be problematic? The council’s report concludes that, yes, the grant likely constitutes a subsidy in the technical sense: it is public money, to an enterprise, conferring an economic advantage, and it could affect competition (at least in theory). After all, leisure is a commercial activity to some degree – private gyms or pool operators could argue a council-funded facility competes unfairly. However, FHDC believes the grant can be justified and structured to be lawful under the Subsidy Control Act’s permitted outcomes.

The key is framing the aid as meeting a genuine public need or “market failure.” The council points out that the grant is focused on community swimming provision, not general fitness or other areas well-served by private providers. Public swimming pools are often not profitable ventures – if the council doesn’t step in, no private company is likely to fill the gap. Indeed, a leisure demand analysis for the district found a shortfall in swimming facilities even if Folkestone Sports Centre reopens. In other words, the grant’s objective (restoring a community pool) addresses a need that the market has failed to satisfy, aligning with allowable reasons for subsidies.

Moreover, the one-off, capital nature of the grant is important. By limiting support to a single injection for infrastructure – and explicitly excluding ongoing subsidies – FHDC aims to minimise any ongoing distortion to competition. The grant is “proportionate to achieving its objective” and once the pool is up and running, The Sports Trust will have to stand on its own feet in the marketplace, just like any other leisure operator. This contrasts with an indefinite operating subsidy, which could undercut potential competitors year after year. The council even suggests it may make a voluntary notification to the Competition & Markets Authority (CMA) and list the grant in the UK’s transparency database, as an extra precaution. Such a step can insulate against future challenges by formally documenting the subsidy and its rationale.

Experts note that subsidies for local infrastructure and services of general public interest – like swimming pools – are typically permissible if they meet tests of fairness and necessity. Legal precedent under the old EU state aid rules provided exemptions for recreational facilities accessible to the public, and the UK’s post-Brexit rules similarly allow aid that delivers public value and minimal market distortion. FHDC’s legal assessment appears to mirror these principles, arguing that helping reopen one pool in Folkestone “does not overly distort competition” given the lack of alternative providers and the community benefits at stake. As long as the grant is used for its intended purpose and the terms are transparent, a successful challenge seems unlikely. (Nonetheless, the council is clearly dotting its i’s and crossing its t’s – aware that subsidy control is a live issue. It’s worth noting this is the same council investing heavily in a new Hythe leisure centre, also partly funded by public money, so they are attuned to the rules.)

The Shepway Vox Team has kept an eye on the issue, previously flagging the council’s need to avoid “grant cliff-edges” and ensure legality. When The Sports Trust’s initial funding approach in 2025 included a £200k per year subsidy request, it was rejected in part due to “uncertain compliance” with subsidy control law. The revamped plan – capital-only support – directly addresses that by removing the ongoing grant. Shepway Vox’s coverage of the FHDC 2026/27 budget noted the £2.4m Leisure Strategy spend (which includes the Folkestone grant) and implied that robust scrutiny is needed to balance such spending with cuts elsewhere. Thus far, no formal objections have surfaced; indeed, there is broad political recognition that reviving the pool serves the public interest. If executed carefully within the law, the grant should withstand any challenge, allowing the focus to remain on delivering the project.

Can the Revived Centre Stay Afloat?

As the council’s decision nears, optimism is running high that Folkestone Sports Centre’s darkest days are almost over. The community reaction to news of a possible reopening has been hopeful – many remember the shock when 144 jobs were lost overnight and the doors were padlocked in summer 2024. The Sports Trust’s bold rescue, backed by Sir Roger’s generosity, has already prevented the site from being sold off to purely commercial interests. Now, the final piece could fall into place with council funding.

Yet alongside optimism, there is realism about future challenges. Even with a refitted pool and spruced-up facilities, the centre will need to cover its running costs through memberships, swim lessons, gym usage and more. That’s no small task for a charity-driven operation – the prior trust struggled despite annual council grants and had to contend with rising energy bills and maintenance on an aging building. The new plans seek to mitigate some of that (for instance, solar panels to shave energy costs), but profitability is not guaranteed. The four-year revenue grant of £200k/year that The Sports Trust originally sought speaks to concerns about initial losses while rebuilding the customer base. Without that cushion, the Trust must rely on effective management and community uptake. There is some talk of cross-subsidising from the Trust’s other operations – for example, surplus from Three Hills Sports Park or F51 (if the skatepark starts turning a profit) could help support Folkestone Sports Centre. Additionally, pursuing secondary revenue streams – such as renting space, hosting events, or partnering with health programs – will be crucial.

FHDC, for its part, appears willing to invest on the understanding that public access and community benefit are the ultimate returns, not profit. The grant agreement will require data on usage and outreach, ensuring the centre remains focused on affordable, accessible sports for all. The original Folkestone Sports Centre Trust had a 50-year legacy of community service under that ethos, and The Sports Trust says it shares the vision of “affordable and accessible” activities for local residents. Delivering that mission in a sustainable way will be the true test.

If all goes to plan, construction crews could be on site by spring, and by July 2026 swimmers may once again dive into the Folkestone pool – a sight many thought they might never see again. The coming weeks will determine if the council writes the big cheque to make it happen. In the balance hangs not only £2.4 million of public funds, but the question of whether a charity with plenty of heart (and a big skatepark) can conquer the economics of community leisure. The council’s bet on The Sports Trust – and the Trust’s bet on itself – will soon enter the water for its biggest lap yet.

The Shepway Vox Team

Discernibly Different Dissent

Song Title: Good Bless You Mr De Haan – The Dennis Hoppers