Tories accuse Labour of creative accounting over Time Square “financial fiasco”

OPPOSITION Tories have accused the controlling Labour group on Warrington Borough Council of “creative accounting” following an administrative mix-up over finances around the Time Square development

In what Labour’s finance spokesperson Cllr Denis Matthews described as an “administrative mix-up” a net loss of £6.4m per annum became an operating profit of £317k. He went on to describe Time Square as a “fantastic asset” and invited the opposition Tories “to work constructively with the Labour Administration to help deliver positive outcomes.”

In a letter of correction to a question asked at Full Council last December, the opposition Tories say Warrington Borough Council’s Labour group has attempted to distance itself from the revelations it made in a written reply. The question concerned financial losses being made on the Council’s Time Square development. Members of the council’s Conservative Group say they are incredulous at the new answers.
In his original reply, the Labour Cabinet Member for Corporate Finance, Cllr Matthews, stated that the £142M investment is “currently recording a net loss to the Council of £6.4M per annum”. It went on to say, “Time Square is currently valued at £69.2M (excludes Dolmans Lane which is not valued until 2023/24)”.

Cllr Ken Critchley (Appleton) who is the Conservative Finance Spokesperson said: “WBC’s letter of correction dated 16 January now claims that there was a terrible mix up and, after what looks like some creative accounting, the new answer says that an element of the Time Square development is actually making a small operating surplus of £317K.”
“However, in arriving at this number, WBC is answering a question that was not asked. We asked for the NET return from the £142M Time Square investment, whereas the new answer deals with only some of the investment and gives the OPERATING return which would normally exclude significant costs such as interest which could be in the region of £5M.
“The new answer sent by WBC looks like a shoddy exercise in trying to distance itself from the candour of the original text. We believe that the first figures sent for the net return and valuation of Time Square are much more credible. If WBC wants to show otherwise, then it should publish an open and transparent analysis.”

“In our opinion, Time Square looks like another entry on the growing list of financial fiascos for Warrington Borough Council. We’re asking whether this investment is an epitome of folly, or in other words a white elephant that is diverting council resources away from providing services to the people of Warrington.”
“It’s shocking that these financial details have slipped out in a written answer as though the millions of pounds of public money potentially being lost is a trivial matter. Instead, the Leader of the Council should have issued a public statement explaining what has been going on.”

The Conservative Group is now demanding full disclosure, an enquiry, and an explanation into how this flagship project has apparently turned so spectacularly sour!
The Conservative Group has constantly criticised Labour-led WBC for its lack of openness and transparency. They are saying that this attempt to hide the original answer is just another example of a culture that does not deal with its problems and only responds when forced to.
Cllr Critchley added: “Basic questions need to be answered, such as what is the true net return on this £142M investment of public money after all costs have been charged? Who took the decision to proceed? What return did the business plan predict? When did WBC know the investment was struggling? What is being done to hold those responsible to account? What is being done to rectify the situation?”
“For a council already reeling from numerous poor financial decisions, the shoddy way the basic Time Square question has been answered just adds to our view that WBC is operating without proper, open, and effective financial monitoring and without the governance that council finances of this complexity require.”
“To be sitting on a potential £70M impairment, and for that potential impairment not to be known or explained to councillors, is another indictment of the closed and opaque culture that permeates Warrington Borough Council.”
“The words of Lee Rowley MP in his damning letter to WBC hit the nail on the head, “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.”
“Warrington deserves better than the inept Labour Leadership and the string of financial disasters that is bringing the town to its financial knees.”

Cllr Ken Critchley (left) and Cllr Denis Matthews

In response, Cllr Denis Matthews, Cabinet Member for Corporate Finance said: “The Labour Administration is fully committed to being open and transparent in the conduct of our town’s finances.
“Following an administrative mix-up, a written response to submitted Question 4 from Full Council on 4th December 2023 was issued to Cllr Chapman on or around the 8th January 2024. When the inaccuracy of the response issued was brought to my attention, I contacted Cllr Chapman on 12th January to make her aware and apologise for the error. I assured her that officers were working to provide the correct figures and that an amended correct answer would be supplied.
“The corrected answer was sent to Cllr Chapman on the 16th of January 2024, which confirmed that in the current year, the Council is forecasting an operating net surplus of £317,000 for Time Square.
“The Time Square development is, in my opinion, a fantastic asset that is enjoyed not only by residents of Warrington but those who live outside our great town. It serves as a meeting place for families and friends to enjoy the leisure and hospitality choices not just within its boundaries, but in the wider town centre. It brings in businesses and promotes employment. It is to any fair-minded observer, an outstanding achievement that promotes Warrington within our region.
“I am shocked by the comments made by Cllr Critchley.
“As new analysis by the Centre for Cities shows, the gross domestic household income of Warrington residents is over £8,400 lower than predicted in 2010. The Conservative government during this period has delivered soaring inflation, an NHS waiting list of over 7m, and a flatlining national economy that no longer serves the people who work within it.
“Decisions made by the Labour Administration to invest in our town through flagship developments like Time Square have helped to make Warrington an attractive place to live and work. There were 23,530 more jobs in Warrington in 2022 than in 2010, and positive investment helps to drive these numbers. Behind each is a person able to better make their way in life and support their family.
“The success of Warrington should be celebrated, and I once again ask Conservative Councillors to work constructively with the Labour Administration to help deliver positive outcomes.”