Warrington Council finances slammed in leaked letter

In the letter, which has been seen by the Warrington Guardian, the Government can be seen questioning the council's ability to consider the risks of its investments.

Addressed to the leader of the council, Cllr Russ Bowden, the letter - dated July 21 - summarises a litany of issues that the Government takes with the council's finances.

The letter was sent to the leader of the council (Image: Newsquest)

This letter was written following a Capital Review of Warrington, undertaken by the Chartered Institute of Public Finance and Accountancy (CIPFA).

As it stands, Warrington Borough Council's debt has mounted to £1.8billion - which is almost 10 times the council's core spending power.

It is projected to rise to £2.3billion by the end of 2026.

Written on behalf of the Department for Levelling Up, Housing and Communities, the letter states that the findings of the review are 'very serious.'

It summarises the following issues:

• The council's debt-funded investments are large, uniquely complex, and carry significant inherent risk
• The council lacks clarity over the purpose of the investments
• The quality of scrutiny arrangements is disputed
• The management of a portfolio like Warrington's would present an exacting challenge to any local authority finance team and leadership

Sent by Lee Rowley MP, the letter says: "I am concerned that the council does not fully appreciate the level of risk it is exposed to and has not taken adequate measures to mitigate and manage these risks."

The letter is a damning indictment on the state of the council's finances (Image: Newsquest)

There are a number of steps recommended in the leaked letter, which include:

• A review of the council's commercial risk
• A review of the council's impairment decisions
• Complete a review of the council's capacity to complete core business

Other steps are also recommended, with Mr Rowley writing: "I would, of course, expect the council to take further steps as necessary to reduce capital risk."

Commenting on the contents of the leaked letter, Warrington South's Conservative MP Andy Carter said: "This letter sets the facts out very clearly, it is a really serious situation.

"Debt is almost 10 times core spending power, where the average [debt] for a similar council is around 1.4 times.

"Warrington Borough Council’s borrowing makes it a real outlier, carrying significant risk for the town’s finances.

“Labour councillors have dismissed my concerns and the very reasonable requests from Conservative councillors for answers on so many issues.

"They’ve ignored our calls for a change in strategy and even criticised me for raising the matter in Parliament. We now have an independent review by CIPFA saying things need to change."

Andy Carter MP has long called for additional scrutiny regarding the council's finances (Image: Parliament TV)

Mr Carter added: “Councillors need to take steps to reduce the authority's indebtedness.

"The borrowing is equivalent to £10,000 for every man woman and child in Warrington and we don’t want a situation developing where the council can’t afford to meet its obligations, as we’ve seen recently in Birmingham.

“I understand ministers are continuing to review correspondence from the council in response to the requests made and I urge Labour councillors to co-operate fully with officials as they work through the recommendations.”

Speaking to the Warrington Guardian, a spokesperson for Warrington Borough Council said: "We have recently been in discussions with public finance experts CIPFA on behalf of the government about our capital and commercial strategy.

"We welcomed their expertise and challenge so that we can continue to improve our processes.

“A report provided by CIPFA, which is currently in draft, contains a series of recommendations, which we support and accept.

“We take the findings of this report extremely seriously.

"We await further discussion with officials, and look forward to working at pace on developing and implementing the recommendations.

"We welcome the final report being completed and published as soon as possible.”