WARRINGTON Borough Council has given approval to exit its controversial investment of over £30m in Redwood Bank, following a decision by Cabinet, for a “substantial loss.”
The council had received a formal offer to sell its interests in the bank for a confidential financial return.
At the meeting last night (Monday) the Cabinet discussed and approved the sale of the council’s interests in the bank.
Members heard this would realise a substantial financial loss compared to the initial investment the council made into the bank in 2017. However, in exiting the bank – subject to regulatory approval – the council would be protecting itself from any future risks, and would be exiting from one of its more complex investments.
This is particularly significant, as the council continues to work hard to reduce both its debt level and the complexity of its commercial portfolio, with support from the council’s government-appointed Ministerial Envoys. The council has already agreed to sell off Birchwood Park and is looking at other investments to sell as it bids to plug a budget shortfall and £1.4 billion of debt.
Cabinet member for finance, assets and investments, Cllr Denis Matthews, said: “I believe that this is a decision in the best interests of the council at this time. We have huge financial challenges and a significant task in ensuring we can become a sustainable organisation. Focusing our resource and effort on this goal is critical.
“As we have previously acknowledged, we need to simplify our commercial portfolio, while reducing our overall level of debt to a more manageable level. Continuing to adopt this approach will enable us to prioritise our resources on providing services for our residents and working towards financial sustainability.
“Ultimately, we need to keep making measured decisions about our overall commercial portfolio to ensure we can become a modern and efficient council that provides the best possible services, while living within our means.”
The investment in Redwood Bank was one of the key reasons why the council was unable to sign off its accounts, following a legal challenge by retired accountant, the late Richard Buttrey.
Richard Buttrey
