WARRINGTON South MP Andy Carter has criticised the decision of Labour Councillors to give a £145m commercial loan to a business in Manchester without asking a single question.
Speaking before a meeting of tonight’s Audit and Governance Committee meeting (27th July) Mr Carter says “the astonishing level of complacency” comes at a time when Local Government Ministers have ordered a review of the practices at Warrington Borough Council, which has one of the highest levels of borrowing of any Council in the country.
Labour Cabinet members were last week asked to approve two new loan agreements which the Council argues are transfers to a new party. Despite the complicated arrangements and strict protocols which Council have to operate under, Mr Carter says not one Cabinet Member had any questions to make sure the deal was within the rules and benefiting their town in terms of regeneration.
Meanwhile, at the annual Council Meeting in May, Labour forced through a reduction to the number of Councillors from opposition parties who attend the important Audit and Corporate Governance Committee, responsible for checking the processes of the Council, promising to replace them with ‘independent experts’. To date, no new ‘independent experts’ have been appointed but the elected Councillors have been removed from the Committee.
Mr Carter said : “I am genuinely concerned that these Councillors do not fully appreciate the level of risk the Council is exposed to and they’re simply not taking adequate measures to ensure residents are protected.”
“Warrington Labour has borrowed £1.8bn, meaning our Council is a significant outlier. The Council’s debt is £1,801bn, which is 9.9 times the Council’s core spending power. As a comparison, the average debt to spending power ratio is about 1.4 for unitary councils. We, because it’s our money after all, are in way over our heads. It is the second highest level of debt for any unitary authority after Thurrock, who lost control of their finances and more than double that of Slough. Commissioners had to take over the running of Slough after the Council effectively went bust.
“Last week Labour Councillors at the Cabinet meeting literally nodded through a loan to a commercial business for more than £145 million without challenge, I’m sure they will have looked at the papers but I cannot imagine this type of approval being granted anywhere in business without some discussion or challenge, they either don’t understand or they’re simply not taking it seriously. There is zero scrutiny of what’s happening to taxpayers money and Opposition Councillors are being excluded.
“I want to be assured that Councillors understand the proposals, I want to see what the regeneration benefit for my constituency and this town is. Every bit of evidence suggests there’s no benefit because the funds are going to a business to operate hotels and a business park in Manchester, not Warrington. I think this new agreement fails to meet the requirements of the Prudential Code and I’ve written to the Leader to ask for an explanation of how this meets the rules for regeneration.”
The Government recently commissioned an independent Capital Review of Warrington Borough Council, undertaken by the Chartered Institute of Public Finance and Accountancy (CIPFA). Warrington is one of five Councils where a review is being carried out due to its high levels of debt and extent of commercial activity. The Council’s investment into Together Energy failed to deliver any benefits to the Borough when it entered administration in 2022. Findings from the review are expected to be published in the coming weeks.
The loan is understood to be connected with The Hut Group to be invested in a hotel and a business park in Manchester.
Warrington Borough Council, leader Cllr Russ Bowden and Deputy leader Cathy Mitchell have all been contacted for comment.
When previously criticised for the amount of borrowing the Labour administration have said the “investments” are necessary to plug a shortfall following the Tory Government’s cutbacks and generate around £20m to maintain frontline services.
3 Comments
Thank goodness we’re finally seeing some scrutiny of this council’s excessive appetite for investment.
Councillors – of all parties – we expect you to scrutinise decisions like this to breaking point. It’s what a business would do – investments on this scale wouldn’t simply be nodded through. I know you won’t all have a business background and might feel exposed, but even the simplest of questioning would have shown up Together Energy and Redwood Bank as questionable investment decisions.
Please, please, get a grip. We didn’t elect 2 or 3 councillors to make all the decisions – we elected all of you. You represent the people of the town and you’ve been asleep at the wheel. No more, please!
This is actually disgusting and horrendous news, I’m glad someone’s finally asking questions and trying to do something. I don’t understand how the government have even allowed this to happen and the disgrace of our towns people to be paying council tax to be put in an unpayable amount of debt. This needs to stop and we all need to wake up and realise council tax is not a legal payment they can’t provide proof that it is law to pay it, therefore it is theft
“Labour forced through a reduction to the number of Councillors from opposition parties who attend the important Audit and Corporate Governance Committee, responsible for checking the processes of the Council, promising to replace them with ‘independent experts.”
We should all be very concerned at this turn of events, if it comes about, because it strikes at the very heart of local democracy. Councillors are elected to represent the constituencies they serve and whose interests they safeguard. The “independent experts” the current administration proposes should replace opposition party members on the Audit and Corporate Governance Committee will have no such democratic credentials, nor will they represent any constituencies in the borough.