Folkestone & Hythe District Council’s New Finance System Raises Old Questions

Cllr Tim Prater says Folkestone & Hythe District Council’s new finance system should improve things. He may be right. But the awkward truth is that this is not really a story about a shiny new system. It is a story about how long the old one was allowed to limp on after warnings about weak controls, contract failures and financial irregularities were already out in public.

When Cllr Tim Prater, Cabinet Member for Finance, updated full council at the start of April, he painted an upbeat picture. The replacement finance system, he said, was in its “final approach phase”, with finance due to go live on 1 April and the rest of the council on 7 April. He even described it as an IT project being delivered “to spec, on time and even a little under budget”. That all sounds reassuring enough. The trouble is that reassurance is easier to sell when nobody looks too closely at what came before.

The public record shows the council replacing its old eFinancials finance system and Badger asset system with TechnologyOne cloud software. The April 2025 cabinet report sought approval for a combined capital budget of £560,000 for the finance and asset systems, and the later Contracts Finder award shows the contract was awarded to TechnologyOne UK Ltd, starting on 12 June 2025 and ending on 11 June 2029, with a total contract value of £770,922.. TechnologyOne describes itself as an Australian enterprise software company, while Companies House shows Technology One UK Limited as an active UK private limited company.

The council’s own papers make clear why a replacement was needed. FHDC said both the finance system and the asset system had been in use for more than 25 years, were no longer fully fit for purpose, and had become heavily dependent on manual off-system work such as emails, Word documents, paper forms and downloaded spreadsheets. The same report says a bug in the old finance system’s recurring billing function delayed essential billing and forced officers to spend time correcting the fallout rather than doing their normal jobs. This was not a sleek modern platform. It was a creaking core system being kept alive by workarounds.

That matters because the warning lights were already flashing long before this spring’s go-live. A Quarterly Internal Audit Update considered by FHDC’s Audit and Governance Committee on 7 December 2022 said the council’s Contract Management – Controls and Governance arrangements had received only Limited Assurance. This was supported by the External Auditor as well. In the audit definition later repeated in council papers, that means “significant gaps, weaknesses or non-compliance were identified”. Separate EKAP reporting also recorded Housing Contract Management at No Assurance. In ordinary English, that is not a minor wobble. It is a public statement that important controls were not working properly.

The detail was hardly comforting. The 2022 audit findings said that, from a sample of 15 suppliers, four had not been advertised. From a sample of 15 contracts, five had approved waivers and three of the remaining ten had still failed to obtain the required quotes or tenders. For a sample of 15 contracts worth more than £10,000, contracts were in place for only nine suppliers. The same material also said officers responsible for procurement and contract management needed Contract Standing Orders awareness training. That is not just a technical audit gripe. It is the council’s own control framework saying people were not following the rules properly.

And this was not happening in a vacuum. Shepway Vox reported in May 2022 that Anthony Wallner had been suspended and investigated over financial irregularities linked to the Premier Roofing contract, where the initial two-year contract value was reported as £484,056 but payments by 31 March 2022 were reported as £2,431,897. In June 2022, Shepway Vox reported that the council had publicly admitted two investigations into contractual and financial irregularities, the first involving Wallner, and later reported further suspensions including Alastair Clifford. Whatever the eventual personnel outcomes, the wider point is simple: public money had already gone out of the door while the council’s control environment was weak enough for serious questions to arise.

That is why the timeline matters so much. On 25 February 2025, members were still being told that CLT had reviewed the case for a new financial management system and that a cabinet report was being prepared, with rollout hoped for in April 2026 if approved. Cabinet then approved the combined £560,000 capital budget in April 2025. The same report estimated total costs of about £466,800 for the finance system and £83,100 for the asset system, and projected combined revenue savings of £140,000 over four years compared with the old arrangements. In other words, the formal business case came late, even though the concerns about controls had surfaced much earlier.

Then there is the money trail for the new system itself. Contracts Finder shows a “value of contract” field of £575,000, but an “award information” total contract value of £770,922. Meanwhile, FHDC’s own published supplier-payment files show five TechnologyOne-related payments between July 2025 and February 2026, totalling £235,784.10. Four of those payments were recorded to Technology One Ltd: £225,201.60 in July 2025, £675 in November 2025, £6,750 in December 2025 and £1,470 in January 2026. A fifth payment, for £1,687.50 in February 2026, was recorded to Technology One UK Ltd, the UK company named in the contract award notice. So, on the council’s own published data, there were four payments to “Technology One Ltd” and one to “Technology One UK Ltd”.

The capital trail is where the public paperwork starts to look messy. The February 2025 medium-term capital programme showed Financial System at £500,000, with a total projection across the programme period of £590,000. By July 2025, the updated programme showed Financial System at £490,000 latest approved budget and £558,000 latest projection, with the comment that £68,000 had been carried forward from 2024/25. By late 2025 and early 2026, the public capital papers showed the Financial System line at £558,000 approved and £618,000 projected. The Q3 2025/26 material also said the Replacement Asset Management System budget of £60,000 had been vired to NG54 because the council would be purchasing the AMS module from Tech One. That is clearly movement in the numbers. It is not, however, clarity.

Set against the April 2025 cabinet approval of £560,000, the Contracts Finder total of £770,922 leaves a difference of £210,922. That is 38%, above the figure cabinet approved in April 2025. There may be an explanation buried in the distinction between implementation budgets, carry-forwards, virements and the full four-year contract total. But the public record should not require residents to reverse-engineer the answer from half a dozen documents and procurement notices.

To be fair, the picture is not entirely static. By March 2025, two years after a limited assurance, members were told that internal audit had by then reported procurement and procurement governance at substantial assurance. The council’s case for the new system was also not nonsense. Officers said it would automate workflows, reduce manual inputs, improve reporting and give the council better live financial information. All of that sounds sensible, and after the old system’s problems of money flow to the great beyond, it ought to be the bare minimum.

But that is also the point. This was the bare minimum, and it still took years. FHDC is now asking residents to judge the story by the launch: new software, better workflows, cleaner reporting, a calmer future. Residents would be perfectly entitled to judge it by the delay instead. By the time the council got round to installing its modern finance system, the warnings had already been written, the investigations had already happened and the money had already disappeared into the great beyond. That is not a triumphant digital transformation story. It is a reminder that in local government, the most expensive system is often the old one you kept for too long.

The Shepway Vox Team

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