Tory leader issues 73 page report on council’s “misleading” £10m investment in Junk Bonds

OPPOSITION Tory leader Cllr Nigel Balding has published a 73 page report claiming Warrington Borough Council issued misleading information over a £10m investment in Junk Bonds.

Its one of the latest attacks on investments made by Warrington Borough Council, with Labour’s finance spokesperson Cllr. Denis Matthews, again inviting the Tory leaderhip to round table talks

Opposition Tories say that in 2021 the council decided that it had too much cash sitting in its bank accounts and so decided to gamble £10m on shares in a small Junk Bond fund in the hope of a good financial return.
Cllr Nigel Balding (Birchwood), who is Leader of the WBC Conservative Councillors Group, has published his 73-page Report on the investment, after previously inviting feedback from the Council, the Investment Fund, and the Labour Leader of the Council.
The Report discusses a timeline of the investment decisions made since 2018 and the associated WBC Treasury Management reports. The Council’s decision-making is reviewed, along with the associated rules in Government Statutes, professional Guidance, and the WBC Constitution.
The Report concludes that, in the author’s opinion, WBC failed to get the necessary permission before it spent the £10m, and for the next three years it issued misleading reports about the type of its investment, its valuation, and its returns.
After reviewing WBC’s financial reports, the conclusion is that “WBC’s reports show a lack of openness and transparency for this investment, which is symptomatic of the reporting of most other WBC Treasury investments. Omissions, mistakes, lack of clarity, and late reporting have all been preventing proper audit and scrutiny of the [investment]by Councillors or by Warrington residents.”

Cllr Balding commented: “In my opinion WBC has departed from prudent management of our monies and has been sucked into a series of investment gambles which have nothing to do with being a Council. It’s a field of expertise which is different from normal council responsibilities, and WBC chose to cover up what it was doing by misleading Councillors.”
“The Labour Councillors Group has been in charge at Warrington Borough Council since before this investment was made and they now need to provide explanations to residents. They must explain whether they knew that WBC had invested in a fund of junk bonds (if not, why not?) and why did they allow (or encourage) the Council to publish misleading financial information?”
“My Report provides 18 easily implementable recommendations. Several have been proposed before by others, but many are new. I’m asking for WBC and Labour Councillors to provide a formal response before allowing a proper discussion of the full Report and all its recommendations.”
The full report can be read by CLICKING HERE

Cllr Denis Matthews, Cabinet Member for Corporate Finance responded: “The Local Conservative Group are obviously entitled to their views, but it is in my opinion a sign of their failure to deliver any positive improvements for their residents in the past three years that they have here raised an issue already investigated and fully resolved.

“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?
“In regard to the Altana Corporate Bond Fund, a report imaginatively named ‘Post completion review of the Altana Corporate Bond Fund’ was presented to the Audit & Corporate Governance Committee on 18th January 2024. This report is once again publicly available and can be found on the Council website within the specific Audit & Corporate Governance Committee meeting agenda pack. Cllr Balding will have been aware that this report has already been produced and considered by the Committee, and in my opinion presents a very different picture.
“The investment was as per the Council’s agreed Treasury Management Strategy previously agreed by the Audit & Corporate Governance Committee and Full Council, which adheres to
the Council’s constitution.
“Further, can I refer Cllr Balding to the scheme of delegation for Treasury Management contained within section 20 of the Council’s 2024/25 Treasury Management Strategy agreed at full Council on 26th February 2024 and which fully complies with the 2021 CIPFA Treasury Management Code. It is indeed the Audit & Corporate Governance Committee that is charged with the scrutiny of Treasury Management.
“I am once again happy to meet with Cllr Balding to discuss his report and the recommendations that it makes, but debate via press statement does little to improve the daily lives of the residents that we were elected to serve.”