AN action plan to deal with a critical Government review of Warrington Borough Council’s debt burden will be put to members of the council’s cabinet on Monday.
Councillors will be asked to note the plan and make suggested changes to it – and to agree to receive quarterly updates starting next month.
The review, carried out by the Chartered Institute of Public Finance and Accountancy (CIPFA) on behalf of the Department of Levelling Up, Housing and Communities (DLUHC) was carried out in February last year but not published until last month.
Council chiefs say this was despite repeated attempts by the council to get it published earlier.
The review says Warrington’s portfolio of debt-funded investments is “very large and uniquely complex.”
It asserts that the borough council’s debt burden is one of the highest among English unitary authorities and the highest in its peer group. It holds financial assets and long-term debts outside of service operations totalling in the region of £1.249 million
These include loans to companies and registered social landlords, shareholdings and company interests in a challenger bank, energy and renewables companies and housing development and management companies, property acquisitions and holdings, such as Birchwood Park and supermarkets, etc., and regeneration assets, including town centre redevelopment.
The growth in the council’s investment portfolio has largely been financed through debt and the report comments: “There are plainly risks associated with this indebtedness.”
A number of recommendations are suggested in the report. The first – and most challenging, according to officers – is recruiting an independent investment advisory panel of commercial experts to review the council’s commercial programme.
Another, considered to be urgent by the DLUHC, is developing a commercial dashboard for incorporating all the council’s commercial schemes.
The council says it welcomes the recommendations as they will strengthen their processes.
But it believes there are other issues to address – including a current “communication vacuum” between the council and DLUHC. It is recommended discussions take place leading to setting up a formal communications strategy.
Cabinet members are being asked to note the action plan and make suggested changes to it.
2 Comments
Not impressed.
WBC was supposed to take on independent advisers years ago. They’ve delayed and stalled, and now claim to ‘welcome’ recommendations.
This has been a long time coming. I can understand why the local elections were so pro-Labour – reflecting the national mood – but I would hate for local councillors to feel they can rest on their laurels. We need our representatives to step up, ask awkward questions – regardless of Party – and shine a light on this debt mountain.
Many of these investments will be sound. Some clearly aren’t. It’s unacceptable that the electorate has been kept in the dark for so long.
Last time it was independent members of the finance committee they were trying to recruit, like every council has to.
This just adds more “independent advisers” to all the independent advisers that advised on the investments in the first place. Chances are they’ll say the same, that if the investment maintains its value it’s a good investment, if it doesn’t it isn’t. And like any investment adviser, they’ll charge for that advice.