Ship Street Folkestone: Enabling Costs Could Reach £1.43m as Land Value Remains Hidden

Open Folkestone & Hythe District Council’s latest Ship Street report and one detail does all the talking: a blank where the developer’s calculated land value should be. The public can see the proposed conditions, costs and risks, but not the figure needed to judge whether the eventual deal stacks up.

That hidden number sits at the centre of a decision now heading towards councillors. Cabinet is being asked to approve a revised planning strategy and support an application to Homes England for up to £25,000. It cannot finally approve the extra project budget itself: it is being asked to recommend that Full Council adds another £132,000 to the capital programme. The developer has made an indicative conditional proposal substantial enough to reshape the scheme, and FHDC calls it deliverable. Yet the same report says the developer has “not yet made a substantive financial offer” for the land. So the planning strategy is changing before a firm price has been placed on the table.

That is the story in a nutshell. FHDC may have found a route to 85 proposed affordable homes on one of Folkestone’s most stubborn brownfield sites. In return, the public sector is being asked to spend more, assume much of the early risk and accept that the land calculation remains hidden while negotiations continue.

There is a respectable case for intervention. Ship Street is a former gasworks with contamination, awkward levels, substantial retaining-wall requirements and challenging topography. The council says relatively low local house values and high remediation costs have made the scheme difficult to finance, helping to explain why the private market has left it untouched for decades. The Local Planning Authority’s position matters too: the outline ceiling must fall from 135 to 90 homes so that the developer can pursue a reserved-matters scheme based on 85 affordable units while meeting density and placemaking requirements. The council also says development could reconnect this deprived part of Folkestone with the town centre, harbour and railway station. This is not a clean, level plot that developers have inexplicably ignored. That is FHDC’s strongest case.

Public intervention, however, is not a blank cheque. Difficult land may justify subsidy; it does not remove the need to account for the subsidy properly.

Ship Street has been going round the houses for the best part of a lifetime. Gas production ended in 1956, the main structures had gone by 1964 and the final gasholders disappeared in 2001. Remediation followed between 2009 and 2011, but the plot remained fenced off. FHDC placed it in its housing pipeline in 2015, pursued an 85-home scheme in 2017, failed to secure Marginal Viability Fund support in 2018 and bought the land in 2021 for £400,000 plus VAT. The 2025 outline proposal then settled on up to 135 homes. Now the ceiling is being cut again. Councillors had already been warned in 2017 that acquisition was not expected to deliver a substantial commercial return and carried a risk of loss.

The latest turn is not simply “90 homes with 85 affordable”. The amended outline application would permit up to 90 units; the interested developer’s reserved-matters scheme would be based on 85 homes described by the council as affordable. The report does not explain why five units of planning headroom are required, whether they provide design flexibility or serve another purpose, and it does not identify the tenure mix behind the affordable-housing label.

Now follow the money. The council reports £814,000 spent on the project, excluding the site purchase and VAT. Of that, £636,000 went on the design team and architects, £71,000 on ground investigations and surveys, £68,000 on consultant advice including contaminated land and ecology, £20,000 on planning fees and associated costs, £16,000 on grounds maintenance and £3,000 elsewhere. Add the £400,000 purchase price and total public expenditure associated with acquiring and progressing Ship Street has reached approximately £1.214m, using the report’s excluding-VAT project figures and stated net land price. Another £29,000 is committed, taking the position to £1.243m. The design-and-architect bill alone is just over three quarters of the £843,000 spent or committed outside the purchase. That does not prove waste. It does show how much professional work has been paid for before a firm offer or a completed home.

The next package adds £184,183: £55,118 for an Arup contract variation, £35,500 in architect fees, £12,000 for ecology surveys, £6,950 for valuation and agency work, £10,000 for a Planning Performance Agreement, £30,000 in legal fees and £34,615 contingency. Existing budget covers £52,183, leaving the £132,000 shortfall.

Put the sums together and the potential acquisition-and-enabling total is £1,427,183: £400,000 for the land, £814,000 spent, £29,000 committed and £184,183 of proposed additional work. That is not £1.427m already spent, nor the construction cost of 85 homes. It is what public expenditure could reach before housebuilding and before the final disposal arithmetic is known. FHDC itself tells councillors to “manage expectations around any capital receipt”.

There are important qualifications. Homes England has already supplied £75,000 towards the project budget and may contribute up to £25,000 more, so the prospective total must not be presented as money funded solely from FHDC’s own resources. Grants are nevertheless public money, merely arriving through another route. Separate again is the £2.5m Brownfield Land Release Fund award intended to help unlock the site through remediation. That grant is not included in the £1.427m calculation because it is a distinct funding stream for land works. Nor should the figures be mashed together: one shows acquisition and professional enabling expenditure; the other is ring-fenced support on which the disposal conditions and viability heavily depend.

That £2.5m is not decorative. The disposal depends on FHDC retaining it, and the council rates withdrawal as a high-impact, medium-likelihood risk requiring an extension request. FHDC must also progress outline consent, deal with Section 106 obligations and secure the biodiversity solution. The developer then submits reserved matters and will not complete until that application is determined. A conditional deal therefore leaves room for the transaction to fail if planning, funding or viability does not fall into place.

Then there is the word “affordable”. Social rent, affordable rent and shared ownership do not impose the same costs on households, yet the report identifies no tenure split, expected rents, registered provider, nomination arrangements, local-connection rules or period of protection. Eighty-five proposed affordable homes could be an excellent result for East Folkestone, especially compared with the previous expectation of roughly 30. The district plainly needs more homes within reach of ordinary incomes. But a larger number does not settle the affordability question. Until the missing details are published, it remains a planning ambition rather than an account of who can afford the front doors.

The legal position needs equal precision. FHDC is both landowner and an active participant in shaping the scheme, while its planning authority must determine the applications. Its legal officer says those roles must be clearly separated. Any disposal must obtain the best consideration reasonably obtainable under section 123 of the Local Government Act 1972 unless supported by specific statutory consent from the Secretary of State. Councillors may hold confidential valuation material not included in the public report, and commercial sensitivity during live negotiations can be legitimate. The narrower criticism is that residents cannot presently test the calculation, compare it with the public expenditure or see what remains after deductions.

Contamination is central to the valuation. It helps explain why comparisons with clean development land may mislead, why the market has struggled and why the remediation grant matters. Curiously, the report says there are “no diversity or equalities implications directly arising”, despite proposing affordable housing in one of the district’s most deprived wards.

The timetable is brisk: outline resolution in November 2026, reserved matters in December, approval in March 2027 and disposal in June. Ship Street’s history counsels caution. A target date is not a home.

The public information trail is not keeping pace either. As of yesterday,  19 July 2026, FHDC’s Ship Street webpage still described the earlier proposal for up to 135 homes with 22% affordable, and still directed residents towards a consultation that closed in October 2025.

Which brings us back to the black rectangle. Ship Street has been classified as open mosaic habitat, so biodiversity provision may have to be secured off-site. Providers have indicated a current cost in the region of £1.2m. The council report hopes that the government’s brownfield consultation may reduce or remove the obligation, but the consultation has closed without a targeted brownfield exemption yet being announced, and previously submitted applications remain subject to the existing BNG rules. If a tariff is payable, FHDC says it must come from the final land receipt. Public expenditure could meanwhile reach £1.427m, the developer has not made a substantive financial offer and the public report conceals the calculated land value. If the receipt is lower than the biodiversity liability, it could be wiped out and leave another funding problem. If it is comfortably higher, the picture may look very different. For now, the public cannot tell.

Approving the revised strategy may still be defensible. Eighty-five affordable homes on a long-derelict former gasworks would be a substantial prize, and doing nothing has already delivered decades of nothing much. But the case now depends on precision, not another glossy promise. FHDC should define the tenures, explain the five-unit planning gap, separate council funding from grants, publish the final valuation and net receipt when commercial sensitivity ends, and report each missed or achieved milestone. Ship Street needs safe land, a fair deal, proper public accounting and homes local people can genuinely afford.

The Shepway Vox Team

Dissent is NOT a Crime