THE Government has ordered a ‘best value’ inspection into Warrington Borough Council amid its huge level of debt.

The minister for local government Simon Hoare has announced that the Government has ordered the inspection.

The council says the move will have no impact on its day-to-day operations.

In a written statement, Mr Hoare said: “Warrington Borough Council is one of a small number of councils carrying the biggest risk in terms of debt leverage.

“The council is the most indebted unitary authority in England, with a capital finance requirement of £1.85 billion – 5.5 times its total service expenditure (as of March 2023).

“My department commissioned the Chartered Institute of Public Finance and Accountancy (CIPFA) to undertake a detailed review of Warrington's capital finances.

“The review, which we are publishing today, found that their portfolio of debt-funded investments is very large and uniquely complex – to a degree that is concerning and puts the council at risk. The report also raises some concerns with decision-making, governance and oversight.”

A lead inspector has been appointed to assess the council’s ‘compliance with its best value duty’, and specifically in relation to council functions of governance and section 151 of the Local Government Act 1972 and the strength of associated audit with particular attention to the decision making and scrutiny and risk arrangements, the capacity and capability across the organisation but particularly the finance function, and whether this is sufficient to meet the ‘best value duty’, the adequacy of the council’s plans and capacity to address the recommendations made by the CIPFA capital review and to control its debt levels and reduce them over time, what an appropriate level of capital risk would be for the authority, with regard to the statutory guidance on ‘best value standards and intervention, the impact the investment portfolio and its management has had on service delivery, and the prudence of financial decision making.

The lead inspector has been asked to report findings by August 30, or ‘such later date as may be agreed’, and will be able to request the appointment of assistant inspectors.

The Labour-run council has issued a statement.

A spokesman said: “The inspection will undoubtedly have our full co-operation, and we will work positively, openly and at pace with the inspector.

“Equally, we welcome the CIPFA review report being made public, following their review in February 2023. We have supported the report being made public since receiving the draft report in September 2023.

“While DLUHC recognises that we have taken steps to address areas for improvement, we will continue to identify any learning and further improvements that can be made as part of this inspection process.

“Finally, we would like to reassure residents and businesses that this review will not impact the valuable services that you depend upon. We will continue to make sure that our day-to-day services remain at the standard you expect and deserve.”

Warrington South Conservative MP Andy Carter has also shared his views.

He said: “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.”