WITH one of the highest levels of debt in the country Warrington Borough Council says it is satisfied with draft accounts for 2022/23 despite deep concerns from opposition Tories.
The Conservative Group says it is “deeply concerned” regarding the accuracy of the latest Warrington Borough Council draft accounts which are prepared up to 31 March 2023.
The borough council published the draft accounts before the deadline of 31 May 2023.
However, the Tories have raised concerns about a backlog of five years of unaudited accounts that must be signed off, saying there are ongoing disagreements with the External Auditor over the application of a charge known as MRP.
The Conservative Finance Spokesperson Cllr Ken Critchley said: “Little reliance can be placed upon the figures contained in the accounts until they are audited”.
At the last WBC Audit and Corporate Governance Committee meeting Cllr Critchley stated that he did not believe that the draft accounts showed a true and fair view of the Council’s finances.
Cllr. Critchley referred specifically to four areas of disagreement relating to the Council’s approach to MRP.
These issues were: the Redwood Bank investment where the Council is effectively spreading the MRP cost over 50 years when guidance requires a 20-year period; the Time Square investment where the asset has been constructed and is in use, yet to 31 March 2023 no MRP had been charged; the MRP for the property portfolio, where a treatment is being used that has the effect of pushing MRP costs into future years and future generations; the MRP treatment of impaired assets such as Together Energy and Redwood Bank.
Cllr Critchley stated that, in his opinion, WBC’s proposed MRP charge is understating the true cost. He commented“With five years of unaudited accounts it means that this year’s accounts are potentially subject to multiple years of adjustments and very little reliance can be put on the reported reserves. This is hugely concerning for WBC with £1.8Bn of debt, and a Council using up reserves to fund day-to-day expenditure.
“The continuing issues with WBC’s approach to MRP could have a material impact on the reserve position if the External Auditor continues to challenge the Council’s aggressive approach to MRP.”
“For the sake of Warrington’s financial stability, the Labour Controlled Council needs to reduce its debt by selling its low-return property portfolio and adopting a far less aggressive position with MRP. The consequences of not doing this could well be disastrous for Warrington.”
A Warrington Borough Council spokesperson said: “We reviewed our MRP policy two years ago, and have kept it up-to-date and in line with government guidelines. We are therefore satisfied with our draft 2022/2023 accounts.”
2 Comments
I would expect WBC to continue making encouraging noises right up to the point when everything collapses, just as they did with Together Energy.
Can’t say I’m reassured. We desperately need a better process for managing council finances. The current situation – with one Party in charge to such an extent that no amount of questioning seems to stir them – is no kind of accountability.
Agree wholeheartedly with you Jim. Instead of continually juggling with the figures to make them paint a rosier picture than the reality; it’s about time Russ Bowden’s administration stopped glossing over the parlous financial situation it has created. On becoming Council leader he did say he wanted an open honest debate. There has been little sign of that, but there has been plenty of smoke and mirrors, as this admirable report confirms.