Council’s “mountain of debt” back in the national spotlight

WARRINGTON Borough Council is once again in the national spotlight over its “mountain of debt” which Tory MP Andy Carter says cannot be allowed to continue while new Labour leader Cllr Hans Mundry blames 14 years of brutal Conservative austerity.

It follows a report by the BBC revealing the debt mountain at UK councils reaching staggering levels, posing a risk to local services, according to the Public Accounts Committee.

BBC analysis shows UK councils owe a combined £97.8bn to lenders, equivalent to around £1,400 per person – in Warrington it has been stated to be nearer to £10,000 per person!
Committee chair Meg Hillier warned of an “extreme and long-lasting effect” if more councils go bust.
But Council leaders, including at Warrington, with the third highest level of debt in the country, say years of government under-funding have forced them to invest in commercial ventures.

Commenting on the findings Warrington South MP Mr Carter said: “Labour have created a debt mountain for Warrington’ residents and used £1.8bn of public money to invest in commercial business but have failed to improve facilities like the Broomfield Leisure Centre which is what the public works loan bird should be used for. This simply cannot be allowed to continue.
“We urgently need a full review of all of the spending by Warrington Borough Council including property, bonds and commercial businesses and then an independent assessment of their true financial return. Conservative Councillors are trying very hard to get answers but there is a culture of secrecy, dismissing legitimate questions and obfuscation when there is challenge.
Labour Councillors have reduced the number of opposition Councillors involved with scrutiny and audit and have failed to secure independent members to replace them. This simply isn’t the way to manage £1.8bn of public money.
“I’ve written to the Secretary of State to ask for an update on the steps he intends to take following the CIPFA Report and the Council’s response to Ministers. I’m deeply worried there is no plan to address the issues the Council are facing in terms of using its reserves and a potential section 114 notice.”

But Warrington Borough Council Leader, Cllr Hans Mundry, responded: “Over the past 14 years, towns and cities across the country have been suffering at the hands of brutal Conservative austerity and cuts to public services.
“Warrington Borough Council’s investments generate a net return of around £23m a year after all the costs of borrowing have been deducted. The £23m in profit assists us in paying for services we all rely on.
“The majority of our investments are secured and were borrowed when interest rates were low, meaning they are locked in at low rates for the long term.
“In 2010, Warrington Borough Council received £70m in Revenue Support Grant funding from the Government. This year we received £1.6m, a reduction of more than £68m – a 97% drop. The Conservatives have taken £68m in funding away from hardworking families here in Warrington.
“Local authorities such as ours were encouraged by the Conservative Government to be more commercial and to make investments to generate alternative sources of revenue to pay for vital services.
“The Council has invested in things like solar farms to power council buildings, loans to social housing providers to build affordable homes right here in Warrington and the regeneration of our town centre.
“The sound management of council finances is of utmost importance, and our plans and actions will ensure our budget remains as stable as possible into the future.
“Warrington Borough Council can balance its budget despite Conservative austerity, because of our investment portfolio. The surplus profit of around £23m goes directly into supporting Warrington’s most vulnerable residents, with more than 80% of every pound we spend going into things like protecting vulnerable children and adult social care.

“The Labour Administration took the decision to invest in Warrington. We have invested in our local economy, and we have invested in our residents. Our investments mean we can offset some of the Conservative cuts forced on our town.
“It’s on the Conservatives’ watch that our country’s national debt has risen to more than £2,636,900,000,000 – that’s £2.6 trillion – almost £40,000 for every man, woman, and child in the UK.
“And it’s on the Conservatives’ watch that public services we all rely on have been decimated, with NHS waiting lists at record highs and asylum backlogs soaring.
“Local Conservatives should be calling on the Government to provide the funding needed to support the services we all rely on, and ask their Chancellor to provide a full and fair funding settlement for all councils.”