WARRINGTON Borough Council has defended its investment in Birchwood Park after opposition Tories said it was now worth £28m less than the council had invested in the business park.
But the council says the Business Park is still worth more than they first invested and despite £200b being wiped off Britain’s real estate in the past 12 months, Birchwood Park was “still performing very strongly.”
The opposition Tories say the extent of the failure of the Council’s investment programme was exposed at a recent meeting of the Audit and Corporate Governance Committee.
When questioned by Cllr. Ken Critchley (Con) the Tories say it became apparent that not only had the Redwood Bank ordinary share investment been impaired by some £25M, and Together Energy by £9M, but that Birchwood Park was now worth £28m less than the £243m that the Council had invested by 31st March 2023.
They say those three investment decisions alone, each taken by the ruling Labour administration in Warrington, have put over £60M of public money at significant risk and the level of potential loss on these investments once again calls into question the high-debt, high-risk investment strategy and the due diligence processes of the Borough Council.
Coupled with the damming letter from the Government Minister responsible for Local Government, Lee Rowley MP, and the revelation that the Council had been investing in junk debt, they say it raises huge questions over the financial risks WBC has been taking with public money.
At the time Lee Rowley MP said “I am concerned that the Council does not fully appreciate the level of risk it is exposed to and has not taken adequate measures to mitigate and manage these risks.”
Cllr Critchley said: “The Conservative Group has been calling for the council to divest of its poorly performing investments and reduce the £1.8Bn “debt mountain” it has created in the last six years.
“However the Labour leadership seemed incapable of facing up to the financial mess they have created.
“We renew those calls to the new Labour Leadership.
Cllr Critchley added: “The scale of the potential loss of public money is simply staggering. It is high time that an exit strategy is implemented and that WBC sells its poorly performing investments, helping to reduce debt and bring the focus of the Council back to the provision of services for the people of Warrington.”
But in response, a Warrington Borough Council spokesperson said: “Birchwood Park is worth more than when we first invested in it.
“The Centre for Economics and Business Research cite that economic events of the last 12 months have seen more than £200 billion wiped off the capital value of Britain’s real estate. This is the largest ever recorded property value write down in UK history, which of course Warrington isn’t immune to.
“Despite this, Birchwood Park continues to perform very strongly, with rent collection rates at 99% and income from this being used to support council services. During the 2022/23 financial year, rental income from our portfolio increased by more than 3% and remains strong.
“It is also important to recognise that our investment in Birchwood Park was for policy reasons, primarily to support local employment, with around 6,000 employees and more than 150 businesses based at the Park.”
