Folca 2 in Folkestone: Council Awards £2.4m Refurbishment Contract as Town-Centre Medical Centre Plan Advances

Folkestone & Hythe District Council has awarded a contract worth £2.42m (excluding VAT) to carry out phase-one refurbishment works at Folca 2  – in purple below – in Folkestone town centre, according to a published contract award notice. The successful supplier is AW Construction Services Ltd, which lists an address at Shearway Business Park in Folkestone.

The works relate to Folca 2, the Art Deco section of the wider Folca complex on Sandgate Road. Tender documents describe a package of “make-safe” and upgrade works including internal strip-out, damp-proofing, replacement of the existing roof, replacement of first-floor windows, and installation of a new party wall to separate Folca 2 from the neighbouring Folca 1 building.

While the council’s original tender notice put the estimated value at £2m excluding VAT (£2.4m including VAT), the award notice records a higher final contract value of £2,420,696 excluding VAT (£2,904,835.20 including VAT). The timetable has also shifted: the tender originally anticipated works starting in January 2026 and running to the end of June, whereas the award notice gives estimated contract dates of 2 March 2026 to 30 June 2026, with the earliest contract signature date stated as 27 February 2026.

Supplier snapshot: what AW Construction’s latest filed accounts show

Companies House filings for AW Construction Services Ltd paint the picture of a sizeable, established local contractor, but one whose performance can look very different depending on which line you read first. The company’s most recent accounts (year ended 31 December 2024) show turnover of £6.17m, down from £7.29m the year before. Yet its gross profit rose to £2.43m (from £1.73m), suggesting that, on paper, the firm either priced work more strongly, managed job costs better, or both.

That improvement did not translate into higher bottom-line profit. Administrative expenses increased and, after finance costs and tax, the company reported profit after tax of £173k (down from £258k in 2023). Put simply: it remained profitable, but less so. 

The balance sheet shows net assets of about £1.40m at the end of 2024, with cash at £681k, and money owed to it by customers (“debtors”) of £845k. Against that, it owed £870k to creditors due within a year (including suppliers and tax liabilities). Longer-term amounts owed fell sharply, to £79k (from £195k). The accounts also show dividends of £60k in 2024 (and £80k in 2023), consistent with an owner-managed business taking profits out while still building reserves overall.

A familiar argument: developer cash for town-centre GP space

The wider policy debate around a town-centre medical hub also has a local planning history. In papers for the Folkestone Harbour & Seafront scheme, officers recorded that the NHS body at the time preferred a financial contribution for primary care, rather than relying on on-site health space within the development. (In planning terms, a Section 106 agreement is the legal mechanism that makes developers pay for infrastructure needed because new homes and businesses increase demand.) In this case, negotiations “led to confirmation that a sum in the region of £1,008,000 (depending on unit numbers and mix) will be required”, to be paid to the council and used with the NHS locally “towards new and improved Primary Care premises within the town centre area serving the development”.

Competition, weighting and what happens next

Procurement records indicate a competitive field. The award notice states that nine tenders were received and assessed at the final stage, with eight submitted by small and medium-sized enterprises (SMEs). The council ran the process as a “below threshold – open competition”, hosted via the Kent Business Portal (Delta eSourcing).

The tender documentation shows evaluation weightings of 30% price and 70% quality, including skills and experience (30%), methodology (20%), programme risks (10%), health and safety (5%) and carbon reduction (5%). Variant bids were not permitted.

Folca is the former Debenhams store bought by the council in May 2020, for just over £2m, with big regeneration promises attached. Nearly six years on, it has largely sat empty and inert, a prime town-centre asset waiting for a purpose while the paperwork, phasing and funding grind on. The council says these works are about making Folca 2 “fully watertight” and ready for later fit-out — but that language is, in effect, an admission that meaningful reopening and everyday use still look some way off. For residents and traders, the familiar pattern is hard to ignore: when the council acquires high-profile buildings, delivery can be slow, staged and uncertain, with “future phases” doing a lot of the heavy lifting for far longer than anyone was first led to expect.

The Shepway Vox Team

Journalism For The People NOT The Powerful