WARRINGTON Borough Council has come in for criticism for the ‘hollow’ reasons it gave for refusing to release an auditor’s letter publicly – until now.

The council failed to sign off its 2017-18 statement of accounts before the deadline due to a valid objection questioning whether its investment into Redwood Bank was legal and in the public interest.

The objection was lodged by lodged by retired chartered public finance accountant Chris Haggett, a retired chartered public finance accountant.

Grant Thornton is the council’s independent external auditor.

As reported in September last year, the auditor found no ‘clear evidence’ that the council acted unlawfully in making the investment into the bank.

As a result of a Freedom of Information request by Richard Buttrey, and the involvement of the Information Commissioner, the council have now agreed – after earlier refusals – to publicly release auditor Grant Thornton’s decision letter on Mr Haggett’s objection to their 2017-18 accounts.

The letter was issued in July 2020 after a two-year audit investigation and has been strictly confidential, until now.

Mr Haggett says that while the objection was not sustained, the results of the investigation, set out over 11 pages, are ‘illuminating’.

He said: “The only individual named in the document is Cllr Russ Bowden – now council leader but, back then (2017), the lead executive board member.

“The auditor states that Cllr Bowden was provided with regular detailed updates about the change in structure (ie investing in a different company – Redwood Bank Financial Partners – rather than Redwood Bank itself, as originally intended). However, the auditor states, this is not the same as the executive board being aware of the change.

“Furthermore, the auditor continued, there is no evidence the executive board as a whole, was formally appraised of the change, or the rationale for it, at their meeting in January 2017 before the decision to invest was taken.

“The auditor argued this represented a weakness in the council’s governance arrangements and that, given the nature and scale of the investment, lessons should be learnt.

“The auditor considered at length the legality of the investment in relation to the interpretation of the minutes of that meeting. The issue was ‘finely balanced’. They concluded there was no clear evidence the council had acted outside its powers, although it was at least possible a court could decide the investment was illegal.”

Mr Buttrey says the auditor’s 11-page report into the 2017-18 public objection was only released after the Information Commissioner (IC) became involved, expressed concern that the council was not taking its responsibilities seriously, rejected the council’s reasons for not releasing the report and invited the council to ‘reverse or amend your position’ and gave a five bullet point list of specific actions the council must take.

He added: “It was effectively an ultimatum by the IC. The IC’s report makes it clear there was no reason why it could not have been released immediately it was received in July 2020.

“The council delayed and prevaricated for over twelve months often without even the courtesy of acknowledging chaser letters.

“Their reasons for refusing the original FoI request citing things like commercial confidentiality and damage to Grant Thornton’s reputation are now shown to be hollow.

“They hadn’t even bothered to ask GT if their reputation would have been damaged. The IC does not like assumptions being made about third parties without evidence.”

In a statement, the council says the review from Grant Thornton concludes that the external auditors found no clear evidence that the investment in Redwood Bank was unlawful.

A spokesman said: “We were always confident that this would be the case, given the detailed due diligence and external support we received, and that we evaluate and assess in detail the benefits and risks associated with any investment we make, alongside engaging cross-party risk workshops. These are always central considerations before any final investment decisions are made.

“We are, however, always looking to develop our processes and continually push to make improvements, and we therefore equally acknowledge areas for improvement in the report, which we have been implementing since the report was first published.”