Folca: The £5.6m Former Debenhams Bill and the 25-Year Payback Question

Folkestone & Hythe District Council bought the former Debenhams building in May 2020 for £2.05m. Six years later, the public trail points to at least £2.419m paid or incurred, rising to £5.619m once identified Levelling Up Fund and CIL allocations are included — while the council’s own modelling raises a harder question about how long the wider bill really takes to recover.

Folkestone & Hythe District Council bought Folca, the former Debenhams building in Folkestone town centre, on 15 May 2020 for £2,050,000. That’s where this story starts: not with a ribbon-cutting, not with a medical centre, and not with a regenerated high street, but with a public body buying a large empty department store and placing a very large bet on what it might become.

The council says Folca was bought to help drive town-centre regeneration. The building is now split into Folca 1, the Edwardian section fronting Bouverie Place, and Folca 2, the larger Art Deco section fronting Sandgate Road. Folca 1 has been purchased by Arcvelop, while Folca 2 remains the council’s preferred mixed-use scheme, potentially combining commercial space with a new medical centre.

FOLCA 2 – Where medical Centre is proposed to go

The Shepway Vox Team has reconciled the purchase price, FHDC’s published payments-to-suppliers data, purchase orders, procurement notices, Cabinet papers and CIL material. The result is not a tidy council-published Folca total. Instead, residents are left following suppliers, contract values, Cabinet tables and redacted business-case assumptions. As ever, local democracy comes with a complimentary treasure map and no torch.

The cleanest paid-or-incurred figure we’ve identified is £2,418,876.39. That is the £2.05m purchase price, plus £368,876.39 in likely Folca-related supplier payments identified from the payment and procurement trail. The caution matters because many payment rows are described generically as “Professional Advice & Fees”, rather than being clearly labelled “Folca”. A council should not need a forensic reconstruction before residents can understand what has been spent on one of its flagship projects.

The public-money figure then grows. FHDC’s own Folca page says £2.2m from the government-funded Folkestone — A Brighter Future programme is earmarked for Folca, and Cabinet papers say the preferred scheme also uses £1.44m Salix funding. Shepway Vox’s reading of the draft business-case material identifies a further £1m CIL allocation in the mixed-use funding stack, alongside NHS/ICB funding and council borrowing.

That means the stronger public-money figure is now £5,618,876.39: the £2.419m paid or incurred, plus £2.2m Levelling Up Fund and £1m CIL. This is not the same as saying all of that has already left the council’s bank account. It is saying that the identifiable paid, incurred and allocated Folca trail now reaches £5.619m before the full Folca 2 development is complete.

Then comes the larger business case. The May 2025 Overview and Scrutiny material put the recommended Folca 2 option at £13.2m, made up of £2.2m Phase 1 LUF works and £11m Phase 2 construction costs and contingency. The finance plan then listed £2.2m LUF, £1.4m Public Sector Decarbonisation Scheme, and £9.6m FHDC capital, with repayment options being explored with the NHS.

The February 2026 Cabinet report is where the payback story becomes more slippery. It says the mixed-use medical-centre option is modelled over 40 years, with financial return, payback period and risk compared against a commercial-only alternative. Shepway Vox’s earlier analysis of the draft figures recorded the headline projection: £13.2m development cost and £9m surplus over 40 years for the mixed scheme, compared with £8m cost and £10.5m surplus for the commercial-only scheme.

Cabinet papers say the medical-centre element breaks even in year 1, the commercial element produces a positive return from year 2 and breaks even in year 5, giving a combined break-even of four years. But there’s a very large “mind the gap” sign attached: the report says this calculation excludes repayments for capital borrowing. In other words, “break even in year 4” is not the same as “the whole Folca bill is paid back in four years”.

A simple arithmetic test shows why that distinction matters. If the mixed-use scheme produces a projected £9m surplus over 40 years, that averages £225,000 a year. Against the £2.419m paid-or-incurred figure, that implies a rough recovery period of just under 11 years. Against the wider £5.619m paid, incurred and allocated figure, it points closer to 25 years. That is not the council’s formal model; it is a plain-English stress test of the public-money trail against the projected long-term surplus.

There are also assumptions doing a lot of heavy lifting. The Cabinet papers refer to 75% occupancy, a 25% vacancy allowance, rent-free periods for commercial tenants, capital receipts from Folca 1 and the Civic Centre reducing borrowing, and the ICB’s formal business case still needing to go through its own approval process. If the NHS route doesn’t proceed, the council says it’ll move to the commercial-only option. That is not failure, but it is risk wearing a council lanyard.

So the fair conclusion is this. Folca has cost at least £2.419m paid or incurred so far, rising to £5.619m once identified LUF and CIL allocations are included. The council says the operational mixed-use scheme breaks even in year 4, but that excludes capital-borrowing repayments. When the projected £9m 40-year surplus is tested against the wider public-money trail, the simple average points much nearer 25 years to recover the identified paid, incurred and allocated total.

Folca may yet become the town-centre anchor residents were promised: a medical hub, commercial space, footfall, cleaner energy and a better use for a building that has been empty too long. But hope is not a ledger. When a council buys a building for £2.05m, attaches millions more in public funding, and then tells residents the project breaks even in four years, it should also publish the bigger answer: what has been spent, what has been allocated, what has been committed, and how long the whole public bill really takes to earn its way back.

Seen something the public should know about? Send tips, documents or concerns to TheShepwayVoxTeam(at)proton(dot)me. You can contact us in confidence, speak off the record in the first instance, and help us follow the evidence where it leads.

The Shepway Vox Team

Journalism For The People NOT The Powerful