New credit rating for cash-strapped council

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CASH-strapped Warrington Borough Council has received a ‘BBB+ credit rating’ with a stable outlook, despite a huge black hole in its finances.

The council has issued a recruitment freeze and an all but essential travel ban due to its need to make millions of pounds of savings.

The new credit rating from S&P Global, follows an evaluation of its finance, governance and strategic planning. The authority faces a £20.904m overspend leading to the cuts.

The overspend is as a result of pressures on budgets including adult and children’s social care.
The stable outlook reflects a view that, despite the ongoing financial pressures facing all councils, Warrington’s efforts to contain costs should mitigate some of these pressures, primarily relating to increasing demand for care services in the borough.
In its report, S&P Global states that economic recovery and cost-saving measures will gradually strengthen the borough’s financial indicators, with Warrington’s budgetary performance modestly improving, supported by economic recovery, moderating inflation, and the council’s own plans to improve efficiencies.
The report also highlights the steps the council is taking to address its high debt and exposure to non-treasury investments, which, if effectively delivered, should reduce its exposure to riskier activities.

Supporting the BBB+ rating is the council’s strong liquidity position, which includes access to various sources of external liquidity, including the Public Works Loan Board (PWLB).
Warrington Borough Council Leader, Cllr Hans Mundry, said: “I’m pleased that we have received this positive credit rating, following a thorough evaluation of our financial health by S&P Global.
“Like all local authorities, we are facing financial challenges. This stable outlook can give us confidence that we are heading in the right direction and doing the right things to help us meet these challenges.
“It demonstrates that our proactive approach to maximising our resources and improving efficiencies is having a positive impact and helping to strengthen our financial sustainability.
“While we are encouraged by this rating, we will review the information and recommendations in the report, to help us identify ways in which we can further improve our financial performance and protect essential services for the people of Warrington.”


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