Tories raise further concerns over £10m “financial fiasco” property investment

OPPOSITION Tories on Warrington Borough Council have raised further concerns over a “Financial Fiasco” involving a £10m property investment which they say has now been valued at £1.3m.

But Labour finance spokesperson Cllr Denis Matthews has hit back saying they have been transparent and called upon the opposition to come forward with “positive ideas” to benefit residents of Warrington.

Tory finance spokesperson Cllr.Ken Critchley says “It has finally been revealed that Warrington Borough Council’s £10m investment in 2021 for shares in a Birmingham property company now has an estimated value of just £1.3m. This news follows challenges from the WBC Conservative Councillors Group for the Labour-led Council to come clean with residents regarding the extent of the failure of their investment in Mailbox REIT Plc.
“The Conservative Councillors Group believes that this investment decision was unconstitutional and that the truth about the financial difficulties was hidden from Councillors. The extent of the problem only came to light after a press article on 10 December 2023 in inews, and the Tories have now made an official complaint.”

He says that during 2023, the council’s Audit and Corporate Governance Committee was not made aware of the collapse of the property value of Mailbox, the collapse of the net asset value per share, the cessation of dividend payments or the breach of the company’s banking covenants. In the council’s 2023/24 Mid Year Treasury Review dated 14 November 2023, Mailbox was reported at full value of £10m and the report said, “The investment has maintained its value in the period, with a high degree of occupancy, rent collection, and long lease length.”

Cllr. Critchley added: “WBC’s Mailbox investment raises many difficult questions for WBC as it’s the latest financial disaster that is likely to lose Warrington residents’ money.”
“This is another example of embarrassingly bad investment decisions by WBC. What is worse is the way this investment was reported to the Audit and Corporate Governance Committee throughout 2023. A paper from the Conservative Group to the Council shows the extent of the investment misreporting and how the investment decision is, in our view, not constitutional.”
At WBC’s Audit and Corporate Governance Meeting held on 8 February 2024, Cllr Critchley says he tried to persuade the Chair of the meeting to allow questioning of officers over the reports they had presented to the Committee throughout 2023. However, Labour Councillors sought to avoid a discussion on the subject and the meeting then descended into chaos when a senior Council Officer decided to walk out. The conduct of this meeting has subsequently been the subject of complaints both to and from the Council.

Commenting on the meeting, Cllr. Critchley said: “£10m of public money now has an estimated value of £1.3m. Perhaps this explains why the Council did not want its latest fiasco revealed. Without the press picking this matter up in late 2023 we may still be none the wiser. This is a shocking situation. Warrington deserves better than the Labour Administration who have allowed this latest financial fiasco.”

In response Labour’s Cllr Denis Matthews, Cabinet Member for Corporate Finance “I understand that we have entered an election period but if the local Conservative Group had dedicated half as much time to lobbying their own Government for a fair long-term funding settlement for all Councils, rather than continually providing opposition for oppositions’ sake, then in my opinion they would have perhaps achieved something that they could demonstrate to their electorate. After three years as the official opposition on Warrington Borough Council, what have they actually delivered? What has been their positive contribution? What difference have they made to the lives of their residents and the communities that they were elected to serve?
“These questions are not for me to answer, but when the people of Warrington cast their vote in May I ask them to consider if they feel the Conservative Party have delivered for them and their family.
“As Cllr Critchley will be aware, a review into concerns expressed by himself and Cllr Balding regarding Treasury Management involvement into Mailbox was presented to members of the Audit and Corporate Governance Committee on 8th February 2024. This report is publicly available and can be found on the Council website. I would encourage everyone to read this report if they are seeking greater clarity around the matter. It is my opinion that this report presents a very different picture to that of the Conservative Group’s press release.
“The Labour Administration continue to be committed to the open and transparent conduct of our town’s finances. It is the Audit and Corporate Governance Committee that is charged with the scrutiny of Treasury Management, and it is a matter for individual members of the Committee as to whether they support the recommendations put forward by Conservative members after considering the merits of their proposals.
“I am always happy to speak with Cllr Critchley and any other member of the Conservative Group should they have positive ideas that they feel would be to the benefit of the residents of Warrington. However, debate via press statement does little to improve lives or promote our communities.”