LOCAL Lib Dems have criticised what they describe as a “bitter row” between Warrington Borough Council and their auditors Grant Thornton.
Group finance spokesman Cllr Ian Marks now believes the signing off of the 2017/18 accounts now looks further away than ever following the heated meeting of the Audit and Corporate Governance Committee last week.
Calling for “common sense” and a meeting of minds” Cllr Marks said: “Unless the differences of view can be rectified very quickly, the Council will receive a strongly worded letter criticising their actions on investments.
“Both sides are adamant they are in the right having taken expensive legal advice from barristers. The Council’s barrister says its actions are lawful but the Auditor’s says they are not. When I suggested the two barristers should talk to each other, the Auditor told me in no uncertain terms this was not possible. There has been a lack of communication by both sides yet my common sense proposal to help put this right was rejected.
“Signing off the 2017/18 Accounts looks further away than ever. It doesn’t help that Grant Thornton has received a good deal of criticism nationally for their work on audits and in particular on the baking and cafe chain Patisserie Valerie where they were fined £3m for a ‘serious lack of competence.’
“I have repeatedly said that Liberal Democrats support reasonable Council investments that generate income to keep vital services going. The Conservatives criticise these policies but have never told us how they would make up the shortfall. Investing in Redwood Bank and Together Energy is too risky and not the right way of spending public money. The ongoing collapse of energy companies just compounds our worries.
“A meeting of minds is needed to restore the Council’s reputation and banish suspicions of wrongful behaviour.”
As reported yesterday the council say Grant Thornton have highlighted issues that remain under discussion in the report to last week’s Audit and Corporate Governance Committee and are continuing to discuss outstanding issues and hope to reach a shared position to take forward, which will then be reported back at the next Audit and Corporate Governance Committee.
Talks ongoing with auditor as council faces more criticism over “high risk” investments
10 Comments
Too little to late by the Lymm – Dems . They were in opposition throughout Redwood . They chose not to publicly xall out the ridiculous 12x share price deal the council entered into abd nr marks himself is on record as saying (on behalf of Lymm Dems) “we’ve given you an easy time of it “ (regarding scrutiny) . A “chat” won’t clear this mess up .. in which labour and Lymm Dems were involved .
I agree with your analysis. Redwood. An opposition needs to oppose.
For that matter, I would have expected Labour councillors to have been vastly more forthright, too. Party discipline shouldn’t trump doing the right thing.
The Tories and their social media fellow travellers remain totally obsessed with the two high risk investments, Redwood and Together, that were opposed by the Liberal Democrats. Yet these investments represent no more than about 5% of the Councils investments, which, in total, are delivering more than £20 m per annum to support a revenue budget of £150 m which pays for all Council Services. More than £ 100 m of that is spent on adult and children’s social care, protecting the most vulnerable members of the community.
Would a Conservative administration slash the budget by £ 20 m in order to disinvest and freeze Council Tax? They won’t say.
They don’t believe in local government and are only interested in appealing to those who look after themselves and don’t care about the needs of the community as a whole. If there isn’t a profit in it it doesn’t count.
They also ignore the fact that the Redwood Bank deal was done with a major donor to the Conservative Party who was lined up to be Party Treasurer. Are they telling us that he is cheating Warrington or exploiting the Council’s naivety.
Our finance spokesman has also questioned the loan of £ 200 m to another local major donor to the Conservatives.
Yet, being generous, these two deals with Conservative donors may both have been perceived, and analysed by all parties involved to be win – win where Warrington benefits, as do the counter parties.
Perhaps the Conservatives should spend less time on their obsessive negative attacks and think more about how all parties might cooperate to support the town in very difficult times. I know the Labour one-party state of Warrington and the Leader don’t make this easy, but it is how responsible Councils deal with crises.
Mr. Barr, The investments may be returning £20 million pounds but how much is the cost of servicing the £1.6 billion of debts?
Bob, I’m not a member of any political party, nor am I minded to support one party or the other. I’m really concerned about the investments. Perhaps I could set out a few reasons for my concern here. TBH I feel as if you’re trying to marginalise normal people like me who have genuine concerns.
1. Yes, the Together Energy and Redwood Bank investments look like bad deals. I’m hoping that TE will benefit from the current crisis, which might be to our advantage. Even if that comes off and WBC does well out of the deal, it doesn’t mean that it was a wise investment in the first place. The TE deal looked ridiculous – a company with virtually no assets, we had to loan them £4 million and then invested £18 million for a 50% share. Redwood Bank is so skewed as to be scandalous. My dog wouldn’t have done such a bad deal
2. Are these two investments somehow trivial? Not really, they account for well over £50 million of taxpayers money. There’s also the question of ‘what we don’t know’ about the other investments. Where the deficiencies are very obvious, as with TE and Redwood, citizens can ask questions fairly easily. The other investments are more opaque. Maybe they’re great investments – but when the ones we DO know something about are so bad, it doesn’t create confidence.
3. I haven’t seen hard evidence of the returns of £20 million p.a. – just occasional press statements. Let’s take this at face value, though. That’s £20 million on borrowing of over £1.6 billion – not a sparkling return. How much risk are we carrying for this trivial return? Investments can, and do, provide negative returns. How confident can we be that we won’t face many years of the investments COSTING £20 million p.a.? (Or some other sum)
4. You don’t like the Conservatives. That’s fair enough – party politics and all that. It doesn’t free you from your duty to challenge the current administration – whatever colour their rosette. I’d like to see Labour councillors challenging their leadership also – something else which has been sadly lacking these past few years.
I believe there is more to add to the Together Energy investment Jim. WBC also parted with some more cash when TE bought items from the collapse of Bristol Energy, another figure of £4 million was quoted then. In addition there has been mention of a rolling credit arrangement set up for TE, but I’ve seen no mention so far of any drawings being made on it. Nor have I read of any questions being asked by any party about this arrangement.
Bob,
Our council can’t even keep the footpaths clear or bins emptied in a timely manner.
Why would we trust them to invest in risky start ups with characters like Redwood. Perhaps spend less time on here justifying the councils position and more time on actually getting the simple stuff right eh!?
Dear mr Barr .. rather than you’d usual “whataboutery” and conflation please focus on Redwood .. please explain in simple terms what the accounting problem is that is stoping sign-off . I’m sure you know but clearly even you dont want to apologise for a potential 20+m loss ? I’ll let you have first go at the numbers …
Redwood Bank: Accounts made up to 31 December 2020 are due at Companies House today (30th Sept). Does anyone know if they’ve gone in? If they have, they should appear on Companies House website within a week’s time.
The objection to 2017/18 was made in June 2018.
The decision by GT was published in June 2020.
Why did it take two years? The decision itself does not seem to contain anything that couldn’t have been discoverable in a relatively short period.
A FoI request for the correspondence between GT and WBC which had discussed the objection was not released by WBC until April 2020. A lot of that correspondence shows WBC spending a lot of time and effort arguing various points, presumably in an effort to get GT to reject it even though GT had already acknowledged it as being a valid objection.
At one point a prominent officer wrote to GT saying that they thought the objector had released some information that was confidential and suggesting that GT might like to take the matter up with the police.
I suggest that shows how keen the council were to stamp on the objection.
Let’s take a step back here and look at what’s actually in dispute. Until the very recent stuff like MRP and the Cheshire Pension Fund liability became an additional matter of concern, in the early days it was just Redwood that was occupying WBC and GT.
The draft 2017/18 accounts show WBC claim a Valuation for Redwood as £10m. Clearly GT see it as something less, I can’t imagine LG would be arguing about it if GT were valuing it at a larger amount. Even if GT consider the valuation was zero the difference between the two is trivial. LG could have said, OK, I disagree fundamentally with GT but I’ll reluctantly accept the GT valuation in order to get the audit over the line and the accounts signed.
Instead he’s dug his heels in and contracted more expensive professional legal opinion in an attempt to persuade GT they are wrong and to change their minds. Why? It’s just a number on a Balance Sheet. In the overall scheme of things, given the trivial amount, does it really matter?
I’m of the opinion this could have been finalised before March 2020. Had that happened then presumably the accounts would have been signed off and cast in stone, meaning all the later stuff about MRP and Land/Plant valuations for 2017/18 would never have arisen.