Council accounts look set to be signed off as Tories accuse Labour of “aggressive accounting policies”

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WARRINGTON Borough Council’s accounts for 2017-18 could at long last be signed off in the coming weeks, although opposition Tories have accused the ruling Labour group of “aggressive accounting policies.”

While Lib Dems described the council and external auditors Grant Thornton reaching a compromise as “good news”, opposition Tories attacked the council’s handling of the situation which they say casts doubt on some the council’s controversial investments.

But Labour’s finance spokesperson, deputy leader Cllr Cathy Mitchell, accused the Tories of “completely undermining the audit process and ignoring the failure of Grant Thornton to properly deal with this process over the past four years. ”

At last week’s Audit & Corporate Governance Meeting, Liberal Democrat Finance Spokesperson Cllr Ian Marks said, “After years of delay and endless broken promises, it appears the 2017/18 Council Accounts are now close to being signed off by the External Auditor, Grant Thornton.

“There must be some confidence by both the Council and the Auditors this will happen, because we have a specially organised extra meeting of the Committee on *9 December to discuss this topic. The good news is that there appears to have been a compromise on the major outstanding point of disagreement between the Council and the Auditors. This means the Auditors will no longer be issuing a ‘statutory recommendation’ which is a way of showing their disapproval over the way Warrington has accounted for some of its investments. The bad news is that there are still a number of minor areas of disagreement which need to be resolved in the next week.

"Council should be

Cllr Ian Marks

Cllr. Marks added: “The controversial topic of Together Energy was raised yet again. I expressed my view that I was pleased that two independent directors have now been appointed to the board of this company. Their task is to look after the Council’s financial interest in the energy company which is vital in the current turbulent climate of energy supply. I have been pressing for this for some time.”

After the meeting Cllr Marks added, “Right now the Council should be devoting its efforts to working with Together Energy to ensure it doesn’t go bust like many other energy companies including the country’s seventh-largest company Bulb. Anything the Council can do to help raise money from alternative sources to safeguard viability and stability would be welcome. Liberal Democrats have always opposed this investment but constant criticism about the investment by others is not helpful to anyone. However the company’s delay in paying its Renewable Obligations beyond the required date and the spin on making out a profit had been made rather than a loss does not inspire confidence amongst the public.”

Warrington’s Borough Council’s Cabinet Member for finance, Cllr Cathy Mitchell, “We are continuing to make progress in our work with Grant Thornton over matters relating to the ongoing audit process. Discussions continue over a small number of areas of disagreement, and we expect Grant Thornton to be in a position to sign off our 2017/18 accounts in the coming weeks.

“We welcome Cllr Ian Marks’ comments on Together Energy and agree that we need to work together to support the company in what is an extremely difficult time for the energy sector as a whole. Every energy company has been heavily impacted by the unprecedented shock to the sector and the huge increase in wholesale prices. At the same time, whilst a government price cap remains, no energy company can make a profit on new customers. We are committed to doing all we can, in these challenging circumstances, to help safeguard Together Energy’s future.”

Meanwhile, opposition Tories said the Labour Council had been forced to abandon its “aggressive accounting policies” after External Auditors Grant Thornton threatened to make a statutory recommendation regarding the issue.

They said the Council had been forced to climb down and adopt more prudent policies but the adjustments would affect the still open 2017/18, 2018/19, 2019/20 and 2020/21 accounting years of the Council. The cumulative costs to 2020/21 would be in the region of £15 Million with ongoing additional costs to the Council in the region of £6 Million per annum.

Grant Thornton commented that it was most unusual to have to threaten to make a statutory recommendation to gain a Council’s acceptance that it had to abide by Statutory Guidance and went further stating, “The Council did not set an acceptable MRP policy it is a significant governance issue”.

In a further blow to the Council, Grant Thornton commented that it may now have to qualify its Value For Money statement in the 2017/18 Statutory Accounts.

High risk investments

Cllr Ken Critchley

Councillor Ken Critchley (Con) commented, “This huge additional cost is a direct consequence of the aggressive accounting policies that the Labour leadership of the Council have pursued. Now even more doubt is placed on the soundness of the investment decisions made during the period 2017 – 2021, when the true costs of the investment to the taxpayers of Warrington were being understated. Investments like Birchwood Park and the Council’s Property Investment Portfolio will now for the first time correctly require MRP charges to be made against them, this may well make a number of these investments non-viable. It’s time for the Labour leadership to stop the spin and reveal the true returns from all of its investments.”

Commenting on the Tory attack Cllr Mitchell added: “These comments are completely undermining the audit process and ignoring the failure of Grant Thornton to properly deal with this process over the past four years.

“In addition, these ongoing attacks from Warrington Conservative Group are undermining Council officers and are of no help in addressing the under-resourcing, and the continual cuts to all local authorities which we have experienced for the past 11 years from the current Government.

“We call on upon all Warrington Councillors and MPs to join our call for an appropriate level of funding for all Councils, so that we can provide the appropriate level of services to our residents.”

*RE The additional meeting set to take place on Thursday 9th December to consider the 2017/18 statement of accounts. Due to the papers from Grant Thornton not being available by the required publication date this meeting has been rearranged and will now take place on Wednesday 15 December at 2pm in the Council Chamber.

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4 Comments

  1. Mmm, perhaps the LDs (and WWW since the opening line is not in quotes” are being a little premature given Chris Haggett pointing out an item in the Times today

    Article is headed
    “Council audit report delayed by years”. It reads as follows:

    “Grant Thornton, auditor for WBC, is still working on the audit of the accounts for 2017/8, having requested further information from the council, including an adjusted set of accounts for “audit mis-statements” and “disclosure issues”.

    A timetable published at a council meeting this month shows GT hopes to complete the 2018/9 audit next April. It has not yet started audit work on the accounts for the following two years.”

  2. I wonder did the council dither around producing information in piecemeal fashion for Grant Thornton to carry out their audits, for as long as they did responding reluctantly to the FOI request(s) about their questionable investments? If they did it’s no surprise this situation has taken so long to be unravelled. Remember, at one stage we were told the initial audit delay was “a mere technicality.” It seems to have much more than that.

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