WITH one of the highest council borrowing levels in the country at £2 billion, Warrington Borough Council has confirmed that it is set to begin talks with public finance watchdog, the Chartered Institute of Public Finance and Accountancy (CIPFA).
The council’s deputy leader Cllr Cathy Mitchell, who is also cabinet member for finance, says it follows “positive discussions” about the council’s approach with the Government’s Department for Levelling Up, Housing and Communities (DLUHC) over the last 12 months.
The basis of discussions with CIPFA will be on the council’s capital strategy and the level of risk to the council in future, which Warrington South MP Andy Carter has described as “gambling with public money.”
Discussions will also focus on the council’s level of borrowing and its existing, detailed governance procedures and effective performance monitoring.
The council’s capital strategy explains how it determines what its capital investment decisions and priorities are, and how they contribute to the council’s ability to run services effectively.
The council’s borrowing relates to investments in property and infrastructure to support economic growth, as well as supporting the council’s efforts to combat the climate emergency.
Cllr Mitchell said: “For the past year, alongside other councils, we have had cordial discussions with government officials about our capital strategy and level of borrowing.
“As part of discussions so far, we have shared detailed financial information and data about our approach. All of our investments are always supported by rigorous risk assessments and prudent business cases, with strong and detailed governance.
“Our investments support our net zero ambitions and our wider vision to make Warrington a great place to work, live and visit.
“During the last few years, for example, we have invested in Time Square, affordable housing, highways, Warrington Youth Zone and the refurbishment of Walton Hall, with Warrington also set to soon welcome the arrival of the all-electric ‘ZEBRA’ bus fleet.
“We borrow to be able to invest in projects that we wouldn’t otherwise be able to do due to government cuts. Many of our investments also directly generate income that we can use to fund vital services. It’s absolutely vital that we do everything we can to protect those services, which some of our most vulnerable people rely on.
“We, therefore, look forward to working with CIPFA and continuing discussions with the government and showing how our approach is working for Warrington.”
Commenting on the talks between the council and the CIPFA, Warrington South MP Andy Carter said: “The Government is rightly concerned at the excessive levels of debt and has now taken steps to escalate the interventions by asking Officers to meet with the CIPFA and have said they will escalate to a Statutory Intervention if necessary.
“This is happening in a small number of local authorities, Warrington’s £2bn level of borrowing means it is one of the highest levels of borrowing in the country and despite the red flags when Together Energy went into administration, they show no signs of changing their strategy.
“Labour Councillors seem to see Warrington Council as an Investment House, giving loans to businesses and buying commercial property in Salford and Manchester – they don’t have the expertise and in-house knowledge to do this. They mention some of the projects in the town they’re supporting, like the zero-emission bus programme, these are being backed by Central Government after I intervened to gain the support of the Prime Minister and a £42m grant for the town.
“The returns they’re seeing on their commercial investments are so low that a small change in the market could result in zero returns, unlike private investors, it’s not the shareholders that bear the losses, it’s the people living in Warrington, it’s simply not what local Councils should be doing. I welcome the steps now being taken by Government, along with Conservative Councillors, I’ve flagged to Ministers that the strategy being employed by Labour is one of high risk and low return – with debts of around £10,000 for every man woman and child in Warrington, the Councillors are gambling with public money, not their own and that’s really dangerous.”
Opposition finance spokesperson Cllr Ken Critchley said: “Since the Conservative Group became the official opposition in May 2021, we have been consistent in our criticism of the Council’s high debt, high risk, low return strategy.
“Total Council debt is approaching £2Bn, £10,000 for every man, woman and child in Warrington. Poor returns from property investments and the failure of Together Energy highlight the risks with public money that are being taken by the Labour Leadership. We would welcome an opportunity to share our concerns with CIPFA.”
*The Chartered Institute of Public Finance and Accountancy is a professional institute for accountants working in public services, national audit agencies, in major accountancy firms, and in other bodies where public money needs to be managed.
They have investigated councils like Nottingham which faced Statutory Intervention after facing bankruptcy.
1 Comment
Quite a lot of political verbiage in this one – from both sides.
I’m glad that the accounts and investments are finally being looked at externally – they’ve been a source of concern for years now.