A LABOUR councillor says it is ‘simply not true’ that Warrington Borough Council is heading towards bankruptcy amid a row over its debt.

During Prime Minister’s Questions last Wednesday, Warrington South Conservative MP Andy Carter raised the issue with Prime Minister Rishi Sunak.

Mr Carter said: “Every month my constituents see the Labour-run Warrington Council spend nearly four-and-a-half million pounds on interest payments to cover their £1.8 billion debt – borrowing they’ve used to spend on an energy company that went bust, offices in Birmingham and Manchester, and even a business park that they purchased through an offshore company, presumably to avoid paying tax.

“Does the Prime Minister agree with me it’s time to send in the inspectors? Warrington Council has gone too far in its money making schemes and local councils should focus on delivering great services, and the way to achieve that is vote Conservative on May 2.”

In response, the Prime Minister said: “This year the Government announced a further £600 million in extra funding for local councils, a real terms increase as it has done every single year of this Parliament.

“But we all know what happens when Labour are in charge, whether it is racking up debt in Warrington as my honourable friend said, the 21 percent council tax increase in Labour-run Birmingham, or indeed slashing services in Nottingham or, as I just said, higher crime on average in each Labour police and crime commissioner area."

The Prime Minister added it is 'crystal clear' that whenever Labour are in charge, it is working people that 'pay the price'.

Labour’s Cllr Denis Matthews, the council’s cabinet member for corporate finance, has issued a lengthy statement.

He said: “I am happy to meet with Andy Carter should he have concerns about Warrington Borough Council’s investment portfolio that generates around £23m profit each year.

“It is time we had an honest conversation about the council’s borrowing and investments. For too long the message pushed out by many is that Warrington Borough Council has massive debt, and that we are heading towards bankruptcy. This is simply not true.

“Your council has around £1.8bn of borrowing that is largely secured against assets. This borrowing has been used to create a diverse commercial investment portfolio. These assets generate over £23m in profit every year. This profit is taken after all the interest on the borrowing is paid, and a reserve is put to one side to cover us in the event of a rainy day.

“The simplest way to look at it is like if you had a buy-to-let mortgage, where the rent you received paid the mortgage and you were left with a profit each month that helped to pay your bills.

“The reality is that WBC has entered into these investments because the national Conservative Government told all councils that they should look to find other sources of income generation.

“Without finding other sources of income, further cuts in the essential services that are expected by all Warrington residents would have been unavoidable. The revenue support grant received from national Government to WBC in 2016/17 was £17.2m, and in 2024/25 was only £1.9m.

“The investment income of over £23m that is generated by your council’s investment portfolio is the main reason why Warrington could deliver the legal balanced budget for 2024/25 that was agreed by full council on Monday 26th February. Without your council having taken action, it is likely that our town would be facing a Section 114 notice like many other councils across the country – effective bankruptcy.

“In a broad sense, the £23m investment income generated this year means your council has £1.9m more this month to spend on essential services that many of us rely on. From this income our bins have been emptied, our streets have been cleaned, potholes have been filled, and adult and child social care has been delivered. Without this income cuts of a similar amount would have been necessary to these and other services.

“I do not pretend that what your council delivers cannot always be improved upon, but those who say we should not have investments or sell them all off do not explain how they would fill the gaps created over the long-term. In the absence of national Government fairly funding all councils and providing the money needed to serve the people of Warrington, our investments mean the difference between effective service delivery and further Tory cuts.

“The Warrington Labour administration believe that the discredited Conservative policy of austerity must never be inflicted upon the people of Warrington again, and where some wish to push forward with more rounds of self-defeating ‘efficiencies’, we will work to protect our town’s people from such ideological harm.

“All councillors are answerable to the people of Warrington, and I understand the wishes of many to be kept in the picture of what our investments deliver for you.

“I hope honesty and transparency over time will help everyone to feel better informed regarding our town’s finances – even if they disagree with the actions taken.

“The simple question for Warrington residents in the May elections is what have the Conservatives delivered for Warrington in the past 14 years. With the Tory record of national failure, what positive vision do local Conservative candidates offer.”