MP urges Prime Minister to call in inspectors as council’s £1.8b debt costs more than £1m a week in interest payments

WARRINGTON Borough Council’s £1.8bn debt was in the national spotlight again during Prime Minister’s Questions today as Andy Carter MP flagged concerns over interest repayments on borrowings on risky investments.

While Labour’s finance spokesperson Cllr Denis Matthews, says the council isn’t facing bankruptcy with the borrowings “largely secured against assets,” the Warrington South MP raised his concerns with the Prime Minister, Rishi Sunak, saying that payments to simply cover the interest on Labour’s £1.8bn borrowing, are now estimated to have exceeded £1million a week.

Mr Carter said this was as a result of numerous “risky investments” by the Council which included businesses that have gone bust, leaving serious questions for Labour Councillors to answer over the governance of their investment decisions. Reports by the BBC in January show Warrington now has the third largest average debt per resident among local authorities in the UK, more than £8,000 per man, woman and child living in Warrington.

Mr Carter said: “Every month my constituents see the Labour-run Warrington Council spend nearly four-and-a-half million Pounds on interest payments to cover their £1.8billion debt – borrowing they’ve used to spend on an energy company that went bust, offices in Birmingham and Greater Manchester, and even a business park through an offshore company, presumably to avoid paying tax.
“Does the Prime Minister agree with me it’s time to send in the inspectors, Warrington Council has gone way too far in its money making schemes and local councils should focus on delivering great services.”

Responding, the Prime Minister said:“This year the Government announced a further £600million in extra funding for local councils, a real terms increase as it has done every year of this Parliament.
“But we all know what happens when Labour are in charge, whether that’s racking up debt in Warrington as [Andy Carter] said, the 21 percent council tax increase in Labour-run Birmingham, slashing services in Nottingham or higher crime on average in each Labour Police and Crime Commissioner area.
“It’s crystal clear whenever Labour are in charge, it’s working people who pay the price.”

The Council’s investments and debt have been the subject of a review by the Chartered Institute for Public Finance and Accountancy (CIPFA) and consideration by ministers in the Department for Levelling Up, Housing and Communities of Government intervention if spending is not brought under control.
Last month Mr Carter also met with the Housing Secretary, Michael Gove, to discuss the process for auditing Warrington Borough Council’s accounts dating back to 2018, and asked his Department to take urgent action to ensure full transparency for local residents to have confidence in how their tax money is being spent by the Council.

In response Cllr. Denis Matthews, Cabinet Member for Corporate Finance said: “I am happy to meet with Andy Carter should he have concerns about Warrington Borough Council’s investment portfolio that generates around £23m profit each year.
“It is time we had an honest conversation about the council’s borrowing and investments. For too long the message pushed out by many is that Warrington Borough Council has massive debt, and that we are heading towards bankruptcy. This is simply not true.
“Your Council has around £1.8bn of borrowing that is largely secured against assets. This borrowing has been used to create a diverse commercial investment portolio. These assets generate over £23m in profit every year. This profit is taken after all the interest on the borrowing is paid, and a reserve is put to one side to cover us in the event of a rainy day. The simplest way to look at it is like if you had a buy-to-let mortgage, where the rent you received paid the mortgage and you were left with a profit each month that helped to pay your bills.”

Cllr. Matthews added: “The reality is that WBC has entered into these investments because the National Conservative Government told all councils that they should look to find other sources of income generation. Without finding other sources of income, further cuts in the essential services that are expected by all Warrington residents would have been unavoidable. The Revenue Support Grant received from National Government to WBC in 2016/17 was £17.2m, and in 2024/25 was only £1.9m.
“The investment income of over £23m that is generated by your Council’s investment portfolio is the main reason why Warrington could deliver the legal balanced budget for 2024/25 that was agreed by Full Council on Monday 26th February. Without your Council having taken action, it is likely that our town would be facing a Section 114 Notice like many
other Councils across the country- effective bankruptcy.
“In a broad sense, the £23m investment income generated this year means your Council has £1.9m more this month to spend on essential services that many of us rely on. From this
income our bins have been emptied, our streets have been cleaned, potholes have been filled, and adult and child social care has been delivered. Without this income cuts of a similar amount would have been necessary to these and other services.
“I do not pretend that what your Council delivers cannot always be improved upon, but those who say we should not have investments or sell them all off do not explain how they would fill the gaps created over the long-term. In the absence of National government fairly funding all councils and providing the money needed to serve the people of Warrington, our investments mean the difference between effective service delivery and further Tory cuts.
“The Warrington Labour administration believe that the discredited Conservative policy of austerity must never be inflicted upon the people of Warrington again, and where some wish to push forward with more rounds of self-defea6ng ‘efficiencies’, we will work to protect our town’s people from such ideological harm.
“All councillors are answerable to the people of Warrington, and I understand the wishes of many to be kept in the picture of what our investments deliver for you.
“I hope honesty and transparency over time will help everyone to feel better informed regarding our town’s finances – even if they disagree with the actions taken.
“The simple question for Warrington residents in the May elections is what have the Conservatives delivered for Warrington in the past 14 years. With the Tory record of national failure, what positive vision do local Conservative candidates offer?”