Council due to grant 125 year, peppercorn rent lease to college group for Margate Digital campus at former M&S store

Margate Digital Image Lee Evans Partnership

Thanet council is expected to agree a 125 year lease on a peppercorn rent for East Kent Colleges Group’s  digital and education campus with studios, gallery, café and workshops at the former Marks and Spencer building in Margate High Street,

The Margate Digital scheme is funded with £6.3 million from the governments Levelling Up Fund and  £720,000  plus an additional further education budget for programme delivery and student support from EKC.

In 2022 the M&S building, owned in a joint venture between Thanet council and Homes England, was initially agreed to be let to EKC Group on a 10-year, nil rent lease.

But the project hit a snag when shortly after the lease agreement was made the Office for National Statistics (‘ONS’) reclassified further education corporations and sixth form colleges as public sector bodies, forming part of central government.

One part of that change meant colleges could only make capital investment in an asset owned by them in freehold or on a long lease. The Department for Education expects a long-term lease to be 125+ years at a peppercorn or nominal rental.

The new proposal for the 125-year, fully repairing and insuring lease means East Kent College Group can invest in the Margate Digital scheme.

The lease would allow for the use of the property for education and ancillary purposes only. A sublet would be allowed within the property, with approval from the council, and for organisations that fit with the education terms of the planning approval.

The Margate Digital project will include 2,000 sq m of  industry-relevant training space which will focus on digital technology.

It will be primarily aimed at 16- to 19-year-olds and the campus will offer a range of qualifications including T Levels, HNDs and HNCs..

Thanet council documents say that EKC Group’s business plan shows an eventual growth in student numbers will mean the project will start to break even by year eight or nine and they will be able to reinvest by year 10.

Photo Frank Leppard

A report to Cabinet members says: “The 20-year projections are based upon an initial intake of 90 students, rising to an estimated capacity of 220 students by year eight. Income for the campus is provided by way of fee income from a variety of courses including adult learning courses.

“The anticipated revenue also includes operating and service charge contributions from leasing out space within the building. Negotiations are taking place on the type of operation that could happen within the building to support the campus.”

Image Lee Evans Partnership

Thanet council would not receive any monies from sale of the building – which has been projected to have a capital value of £390,000, because although the legal title for the property is in the name of Thanet council, Homes England has the benefit of a restriction on title.

The Margate M&S has been shut for some 17 years. The building freehold was bought in 2006 by Thanet council for £4.5 million with grant funding from SEEDA (now Homes England). It has since been used by Turner Contemporary and then Store 21 until its closure in 2017.

In 2021 £750,000 from the Towns Fund from the Ministry for Housing, Communities and Local Government was spent on removing asbestos and renovations to the roof of the building.

A report to Cabinet members says: “The only alternatives are to either give the funding back to central government, or for the council to deliver the Margate Digital campus themselves.

“There are currently no other Further Education or Universities in Thanet that could add a new campus to their provision. The council is not in the position to deliver an education campus, and therefore the only option is to provide East Kent Colleges Group with a lease in order that they can deliver the scheme they put forward for the Levelling Up Fund programme, which was awarded the grant funding.”

The Levelling Up funding for the Margate Digital project must be spent by March 2026.

The lease is expected to be agreed by Thanet council Cabinet members at a meeting on February 29.

The Margate School halts role in Margate Digital campus project due to unexpected rent and funding ‘demand’

44 Comments

  1. So which is it? Is the educational body a private business? With owners and profits and dividends? Or is it a publicly- owned body, part of our national or local educational system? Will the staff be paid according to national agreements? Will the management appoint themselves, and pay themselves what they like? Or is there any democratic input at any point?
    Will the body provide the courses that we need locally or nationally? And who decides about the quality of the courses and whether they are what Thanet needs ?
    Without clear indications about this I fear that this sounds like a cobbled-together project by a local Council that hasn,t got the cash to actually provide their own service.

    • It is not a private business and does not have profits or dividends.
      It is a public sector organisation.
      Just like hospitals are.
      But do you get to input into how a hospital’s run? Nope. So why would you expect to do so with an education organisation?
      The democratic input is when you elect a government. That government then has a series of authorities, that you give to it. One of those authorities is to manage the education system.
      If you bother to look at EKC Groups recent Ofsted report, you’ll see that it is praised for delivering high quality courses that meet both student and local skills needs. There are very few FE colleges that achieve these benchmarks and certainly none in Kent other than this one.

      Oh well. A very small but noisy minority in Thanet love to shoot down projects like this, that actually stand a chance of regenerating things.
      Let me just ask you, if you know so much better than the council, why don’t you put up or shut up and go for election yourselves.
      Sad little people trying to tear down something good and positive. Still, quite typical amongst a small, but very loud minority in Thanet.

      • It won’t regenerate anything. It will just put off what few shoppers still visit Margate High Street. Where else does High Streets have schools… and how do they still encourage shoppers?

        • Okay, so you really don’t think education and the development of skills helps to regenerate areas? Let me take you through it step by step as you quite clearly need this in the most basic possible terms.
          Education and skills development ensures that there are higher salary jobs being created, as there is a steady supply of labour. That in turn increases the disposable income in the local community, leading to more businesses and higher employment. This has a multiplier effect benefiting the entire community.
          Now, to many people this is quite a simple concept. Even just having the building there with students in it will ensure there’s a higher level of footfall, and greater aspiration.
          But again, there’s a handful of very vocal people who wouldn’t know good regeneration if it bit them somewhere unpleasant.
          Once more, I’d challenge you and the few other naysayers to enter the race for public office if you really think you’d do a better job. Otherwise, go play somewhere else.

          • A “higher level of footfall”? Compared to what? Not compared to Poundland, Iceland, The Works, Saveers or other proper shops it won’t.

          • Poundland? Wow, talk about a low aspiration for the town from you. I’d like to think that regeneration can lead to better everything, and over time you’ll get far more shops and footfall than some sort of short term fix with any retailer who’ll fill the gap.

            Again, if you really care, stop banging on here and step up for election. Let’s see whether your sad, low aspiration perspective is shared by a majority in Thanet. I highly doubt it will be, because unlike you, the majority want more for the district.

          • Your precious students will be using Poundland and The Works a lot more than they will No. 42 by Guesthouse and The Buoy and Oyster… or are you against them getting high street bargains?

            As for me standing for election, I know I’m not cllr material, no more than I’m capable of being a Doctor or running a police force. That doesn’t mean I have no right to criticise the people that I’m paying for.

            Oh, and if you want to convince others, you need to learn to tone down the bitterness and anger, as well as your obvious disdain for the poor.

          • DaveyBoi, I agree with what you say about the value-in more ways than one- of education and skills development.

          • But where are the local jobs for these skills? Surely, they’d be of more use locally training for work in care homes, on farms and in the building trade?

          • I’ve absolutely no disdain for the poor – I grew up on a council estate. Thankfully, I had an aspirational family that wanted to rise up, rather than just accept a minimum wage job. And you know what, I’d like more people in Thanet to be aspirational about their futures, rather just accepting a minimum wage job. Equally, I have no issue with people getting a bargain. But the list of shops you just plonked down is hardly setting the world on fire. Let’s think BIG for Thanet, for once.

      • I think you have mistaken the reasons for my enquiries. I am actually in favour of public services and I am very suspicious when projects are funded when it isn’t clear who is running them and how they are structured. As you will have observed, privatisation has been the “flavour of the month” for many years, both in Education as well as in the NHS. So when a new scheme comes along ,with varied sources of funding, I am naturally suspicious as to the reasons for it being favoured.
        One way of judging the nature of any project is to be able to assess if anybody benefits more than others from it’s operation. And if there is a self-perpetuating management structure. Or if there is a local form of democratic input. You point out that we don’t get any local democratic input into the NHS. Isn’t that a problem? We get the chance to vote in General Elections every few years. An opportunity so remote from the actual running of our Health Service that we now have a choice of voting for Tory privatisation or Labour privatisation.
        As for having to stand for election myself, I DID. And I was elected in a part of East Kent. But it quickly became apparent that all power, particularly financial, resides in Westminster.
        So let’s say that I am now more reassured that this new scheme will not be too much of a money-spinner for private companies. But I remain committed to as many forms of local democratic input as possible rather than shrug and accept the services that we are given without making basic enquiries and wanting to know how they are run and in whose interests.

  2. Digital education which will boost the employment possibilities of Thanet young people and that will bring people into the town. Better than an empty shop or a second hand shop surely???

  3. Let’s hope it’s more successful than the training restaurant that East Kent College built in Folkestone with Government money which then had to close within a year as it went bust.

    The fact this project has been on the drawing board already for 3 years without anything substantial happening doesn’t fill me with hope.

    • Blame TDC, HomesEngland and the Department for Levelling Up, if they’d sorted their issues out before Colleges went back under DfE the lease would have been 5 or 10 years not 125.

  4. Is the figure of 390k correct for its current value? Didn’t TDC pay a few million for it originally? When did the homes england clause come into the mix?
    I’ve obviously lost track of whats happened or got things mixed up, can anyone clarify?

    TIA

    • Yes – TDC paid £4.6m in 2006.

      TDC has now tied itself up in a knot.

      Are there any other buildings worth millions that I can have for the next 125 years for nowt ?

    • Homes England is the joint partner, it was SEEDA money that was used to buy the property. The report to councillors says: “Following analysis of the proposed terms, Thomas Lister has, on behalf of the JV
      partners, concluded that the property could potentially secure a capital value in the
      region of £390,000 on an existing use basis, assuming a Freehold or Long Leasehold
      (FRI) disposal.”

      • Thanks Kathy / John- the 4.6 million looks a bit generous in light of the current valuation, but a very convenient way of justifying a peppercorn rent.
        But i’d beminterested to know what value the property has on EKC’s books in the near future.
        But at least the property wasn’t bought with TDC’s own money.
        Anyone know how much of TDC’s money has gone into the building since aquosition?

  5. 125 years – just wow- we are also forgetting the money that was allocated to fix the roof with early development funding- this is a massive white elephant with very poor value for money and dreadful outcomes in terms of pupils and jobs. Cabinet are in a pickle. The dreadfully managed levelling up and town deal projects – real concerns about the match funding for theatre royal with limited time frames.

    • Hannah has hit the nail on the head.

      This government funding is a once in a generation opportunity to revitalise Margate and Ramsgate and it is being dreadfully mismanaged at every turn.

      Giving an organisation a 125 year lease at a peppercorn rent whilst acknowledging they are going to be turning in profits at the site with a decade of being there is scandalous. All because “oh well, it’s better than leaving it empty and returning the money to the government”.

      Sometimes it is better to walk away.

  6. FE Colleges have been reclassified quite a few times by Government, not by their own choice. They don’t have owners, issue shares or make profits, they’re governed by Governing Bodies as schools are, and they pay staff according to agreed national pay scales. So they operate entirely in the way a public sector body does, but every so often a Government takes it into its head to move them about in terms of their status, like pawns on a chessboard, which is hugely frustrating for everyone concerned.

  7. If the department of education stipulated the 125 year pepper corn rent, perhaps the DoE should pay for it. Should not have done it.

    • These exclusive “education” hubs are the new art galleries. They’re “successful” when propped up by OUR money.

      • They are funded by students who either pay for tuition fees themselves or through the Education and Skills Funding Agency. It has nothing to do with TDC. Getting the funding from the ESFA is no easy feat – not all courses will attract government funding.

  8. If all the businesses in the high street could have a 125 year lease
    and peppercorn rent our high streets would be buzzing. I guess this will increase footfall.

    • Exactly, Bill. As with the bottomless money pit for everything vaguely “art”, these things have an unfair advantage over real businesses.

  9. I’m all for increased Gentrification of Margate.
    It’s made me rich on paper! Inward investment in the Arts and education is a positive step for the younger generation that want nothing to do with low aspiration jobs like picking fruit, emptying coin cassettes or spreading glue on crane grab merch.

    No-one is going to Margate high street to shop for anything other than their weekly Morrison’s 6-packs and cheap bangers. That ship has sailed.

  10. My Daughter who is on benefits and trying to better herself pays £200 for a one day 13 week Course in Social Work at Canterbury. This Course should be free to encourage people to get employment.

    • No idea why that is, as there is plenty of funding for courses for adults on benefits.

      Is she doing the course via the Job Centre?

      And who is she doing it with? A university, a private training provider, or a college?

  11. Artful dodger.. Got to pick a pocket or too. You seen the cost of the margate digital for people. It keeps pleading poverty. Show me your accounts..

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