Ahead of the Council’s Audit and Governance Committee meeting today, Warrington South MP Andy Carter has criticised the decision of Labour Councillors to give a commercial loan to a business in Manchester without asking a single question. The astonishing level of complacency comes at a time when Local Government Ministers have ordered a review of the practices at Warrington Council, which has one of the biggest levels of borrowing of any Council in the country.
Labour Cabinet members were last week asked to approve two new loan agreements which the Council argues are transfers to a new party. Despite the complicated arrangements and strict protocols which the Council have to operate under, not one Cabinet member had any questions to make sure the deal was within the rules and benefiting their town in terms of regeneration.
Meanwhile, at the annual Council meeting in May, Labour forced through a reduction to the number of Councillors from opposition parties who attend the important Audit and Corporate Governance Committee, responsible for checking the processes of the Council, promising to replace them with ‘independent experts’. To date, no new ‘independent experts’ have been appointed but the elected Councillors have been removed from the Committee.
Andy Carter MP said:
“I am genuinely concerned that these Councillors do not fully appreciate the level of risk the Council is exposed to and they’re simply not taking adequate measures to ensure residents are protected.
“Warrington's Labour administration has borrowed £1.8billion, meaning our Council is a significant outlier. The Council’s debt is £1,801million, which is 9.9 times the Council’s core spending power. As a comparison, the average debt to spending power ratio is about 1.4 for unitary councils. We, because it’s our money after all, are in way over our heads. It is the second highest level of debt for any unitary authority after Thurrock, who lost control of their finances and more than double that of Slough. Commissioners had to take over the running of Slough after the Council effectively went bust.
“Last week Labour Councillors at the Cabinet meeting literally nodded through a loan to a commercial business for more than £145million with no questions asked. I’m sure they will have looked at the papers but I cannot imagine this type of approval being granted anywhere in business without some discussion or challenge, they either don’t understand or they’re simply not taking it seriously. There is zero scrutiny of what’s happening to taxpayers money and Opposition Councillors are being excluded.
“I want to be assured that Councillors understand the proposals, I want to see the regeneration benefit for my constituency and this town. Every bit of evidence suggests there’s no benefit because the funds are going to a business to operate hotels and a business park in Manchester, not Warrington. I think this new agreement fails to meet the requirements of the Prudential Code and I’ve written to the Leader to ask for an explanation of how this meets the rules for regeneration.”
The Government recently commissioned an independent Capital Review of Warrington Borough Council, undertaken by the Chartered Institute of Public Finance and Accountancy (CIPFA). Warrington is one of five Councils where a review is being carried out due to its high levels of debt and extent of commercial activity. The Council’s investment into Together Energy failed to deliver any benefits to the Borough when it entered administration in 2022. Findings from the review are expected to be published in the coming weeks.
