The Minister for Local Government, Simon Hoare MP, today announced that the Government has ordered a Best Value Inspection into Warrington Borough Council in response to the £1.85billion debt amassed by the local authority.
In a statement, the Minister confirmed that the Labour-run Council is currently the most indebted unitary authority in England. Warrington Borough Council was recently the subject of a review by the Chartered Institute for Public Finance and Accountancy (CIPFA), whose report has concluded that the Council’s large and complex series of investments, funded through borrowing, have put them at significant risk. The report also raises concerns with decision-making, governance and oversight at the Council.
In response to the CIPFA review, meetings with the Council, external auditor reports, and the approval and subsequent reversal of a £145million loan agreement by the Council last July, the Government have concluded that the financial risks are too great and will now intervene to avoid significant impacts on local residents in Warrington.
The Secretary of State for Housing, Communities and Local Government has appointed a Lead Inspector to assess Warrington Borough Council’s governance and financial management. The inspection will focus on the Council’s compliance with the recommendations made in the CIPFA report to control and reduce its debt levels, the impact of the Council’s investments on delivery of local services, the decision-making process in relation to the Council’s finances, and the capacity and capability across the Council.
The Inspector will also consider the appropriate level of capital risk for the authority under the newly-issued statutory guidance on Best Values Standards and Intervention, which provides greater clarity to local government authorities in England on what constitutes best value, the standards expected, and a clear escalation pathway to intervene in the event of failure to uphold these standards. The Inspector’s findings are due to be reported by the end of August.
Andy Carter MP, who just last month raised his concerns with Warrington Council’s debt and called for inspectors to be sent in during Prime Minister’s Questions, has welcomed this action from the Government.
The Warrington South MP commented:
I welcome this necessary announcement, I’ve repeatedly raised my concerns about the £1.85billion borrowing by Labour at the Town Hall because this level of debt puts local services at risk. It is residents who will have to finance the losses that may occur because Councillors are using public money on commercial schemes that carry significant levels of risk.
Having had the opportunity to read both the CIPFA review and the Council’s response, I’m not convinced that elected Labour Councillors understand the steps they need to take to address the concerns raised, and I’ve seen no evidence that they intend to deal with governance and accountability issues highlighted by Conservative Councillors. It’s also very clear that the nonsense published by Liberal Democrats ahead of the local elections – which dismissed my concerns – was just that, nonsense, and the Government is now taking action.
An independent Inspector has been appointed to review the Council’s actions and set out a report to the Secretary of State in August, and I look forward to engaging with him in the coming weeks.
The Local Government Minister’s full statement can be found here: https://questions-statements.parliament.uk/written-statements/detail/2024-05-08/hcws446
