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The former Royal Victoria Hospital is on the market after Kent County Council completed a seven-site acquisition from the NHS in a deal worth more than £3.5 million.
The Folkestone site is expected to be sold for housing development with KCC welcoming "conditional and unconditional offers" for the land.
Officers have not ruled out bringing the site back into public use but only if a developer comes forward with a proposal.
Victoria Seal, KCC’s head of property, told the Folkestone and Hythe Express the authority had not “at any point” bought the site “for our own use” and it was put up for sale with Savills.
The future use of the site remains likely to be for new homes, with the land already allocated in Shepway District Council housing strategy plans and a dormant planning application registered for the Radnor Park Avenue site.
KCC spent £3,636,000 buying the sites from East Kent Hospitals University Foundation Trust.
Talks started in April 2016 for the portfolio and was completed earlier this year.
The trust said the former hospital was surplus to needs as it has been redundant for more than five years.
But it also admitted no review was carried out about using the site for health purposes in its decision to sell.
Part of the deal for the RVH included KCC buying out a legal covenant granted in the 19th century which releases it from being solely used as a charity hospital.
Ms Seal said she anticipated it being sold for housing, saying: “There isn’t any report or correspondence around it [the future use]. We didn’t at any point buy it for our own use.
“We have staff and expertise to add value to it. What happens is not for us to determine. It’s for the planning authority and what the market decides.
“We want to work with EKHUFT to maximise the return to the public purse. We can look creatively whether that means in public life.”
“There’s no answer [to where the money will be spent on the RVH sale], it goes into one pot and out of the other.
“All of the money, or almost all the money, we raise is directed into new schools. We have a huge requirement for new schools and creating school places.”
"What happens is not for us to determine... it's for the planning authority and what the market decides" - Victoria Seal
It comes as a blow to campaigners hoping for the RVH to be upgraded with greater health or social care facilities.
The Express backed a campaign by members of the WI in Folkestone who have been leading calls for improved health care or social care at the site in the wake of more housing planned and a growing ageing population.
KCC says it expects the future use of the land to be determined by a service need rather than the site itself.
But the site has not been earmarked with a particular need for KCC or the NHS, which ruled it surplus to requirement.
Ms Seal said: “If a private developer comes along and, say, someone in social care use for dementia beds, if there’s a provider to social care or the NHS that contract will be in place.
“They may well then source a site. That could be the RVH.”
A clause in the contract between KCC and EKHUFT for the seven sites means that if any property is sold and makes a profit, EKHUFT will receive an additional sum from the sale.