VIDEO: WARRINGTON Borough Council Chief Executive Prof. Steven Broomhead says he remains confident the council’s accounts will be signed off soon and the council can continue to service loans moving forward.
But he admitted to being “anxious” about the investment in Together Energy, due to the fact around 15 other energy companies had gone under in the past two months.
Regarding the issues surrounding the council accounts still not being signed off from 2017 he said it had been a “very complex and difficult situation involving the council’s auditor’s Grant Thornton. We have been in constant dialogue with them on every point they’ve raised – and my God they’ve raised a lot of points around technical detail going back to 2017 including how we account for our debt and our Minimum Revenue Provision.”
He added: “Despite the fact they have signed off accounts in several other councils, they have decided our provision, which was the same as twelve other councils, was not suitable for here! We didn’t understand that.
“I do believe the accounts for 2017 will be signed off very soon. I know I said that two years ago, but it has been an interesting journey with our auditors throughout the process.
“Ninety percent of council accounts in the land have not been signed off for 2018/19 and 19-20, partly due to the capacity of the auditors to deal with immensely complex issues inside councils. In the past councils did not have commercial interests. It has got more and more complex as councils sought income and diverse income to deal with the shortfall in income against the demand of service cost.
“Councils had to go out because of austerity. I know people don’t want to hear this but the council’s budget has fallen by 55 percent since 2012 and we have had to find more and more sources from outside of the council.”
Regarding investments like Redwood Bank and Together Energy, Prof. Broomhead said he was “very pleased” people were curious about these issues.
“Each went through a rigorous due diligence process and continuous performance monitoring. I can’t speak at any length on Together Energy as I am a non-executive director, so I am conflicted about speaking about the matter, being Chief Executive of the council. But what I can tell you is that Together Energy is likely to get a new investor. This is under commercial confidence at the moment and the fact the council is alleged to be £50m adrift is not true when you look at the value of the hedge.”
Prof.Broomhead added: “On Redwood Bank, there has been a dispute on the value of the shareholding but it has done exactly what we said it would do producing income and jobs supporting local businesses.
“There’s two sides to every story and we only hear the negativity. The Government has not funded this council properly. We either cut services or seek other come. We have taken advice on all investments – it hasn’t been done in a gambling or cavalier way.
“I am confident the council can service loans moving forward.”
While saying he had no concerns in the investment in Redwood Bank Prof. Broomhead admitted to being “anxious” regarding Together Energy, following the demise of 15 other energy companies in the past two months.
“I don’t believe Together Energy will be in that position and I am confident Redwood Bank was a good investment.”
While he agrees the millions received from Government for the Town Deal and a new electric bus fleet was good news the main issue was generating funds for the revenue budget.
6 Comments
Good interviews with the CEO.
Has Redwood Bank generated an income as he claims?
I don’t think it has … it’s never made a profit
It will be interesting to hear from the council how much net income it’s generated as per the CEO’s statement here.
Geoff,
Clearly you have a low bar to what constitutes a good interview. As far as I’m cooncened it was riddled with blatant untruths which should have been exposed. He flaunts with the Nolan honesty principle at his peril. One day….
No, 90% of councils do not have unsigned accounts. The PSAA say that by October 2018 the PSAA report that 87% of council’s accounts had received an ‘unqualified audit report’
No Redwood has not returned any money. By law it can’t until it has reversed the last four years cumulative losses. We’ll have to see how much new investors pay for their shares. Anything less than the huge premium WBC paid will dilute WBC’s equity even further.
He says Together Energy is not £50m adrift. Why then did Grant Thornton and indeed the council report that was indeed the risk exposure at the last ACGC meeting.
He trotted out the old straw man defence that all investments went through due diligence procedures. Well yes, of course. No one is claiming they didn’t. But due diligence is essentially done to ensure an investment is legal. 100% of councils that have gone ‘broke’ all undertook due diligence. DD doesn’t prevent a bad commercial investment being made.
Time to wake up Geoff.
It would make more sense for the Council to do what is supposed to, i.e look after the people and the infrastucture of Warrington instead of wasting the ratepayers’ money on ill-advised and un-necessary “investment” schemes which they are clearly not qualified to undertake.