UNDER-fire Warrington Borough Council has suffered another setback in its race to recover from financial devastation, following the collapse of its high-profile sale of its shares in Redwood Bank.
Confirmation of the collapse is revealed in the agenda for the upcoming Cabinet meeting next Monday, 27 July 2026. It exposes a failure to secure vital capital receipts meant to pay down the council’s debt. The collapse lands a heavy blow to the local authority, which is already under severe Government scrutiny and Ministerial Directions following a damning Best Value Inspection.
The disposal of Redwood Bank was part of the council’s “Corporate Asset Optimisation Strategy,” an aggressive offloading of commercial investments engineered to desperately mitigate its unstable financial framework.
The bank sale collapse further highlights what finance chiefs now explicitly admit was an “overreliance on optimistic savings and income assumptions”.
The council’s extreme vulnerability is laid bare in its own financial assessments. The authority is now trapped in a vicious cycle: it has been forced to rely on £87.029 million in emergency Government Exceptional Financial Support (EFS) just to balance its books.
Alarmingly, this emergency state funding is not free cash; it carries severe sting-in-the-tail consequences. It creates an ongoing, devastating annual pressure of £8.703 million per year in combined Minimum Revenue Provision (MRP) and interest costs. Every commercial deal that falls through further suffocates the council’s ability to restore long-term financial sanity.
In his strategic financial briefing, Councillor Denis Matthews, the Cabinet Member for Finance, highlights the following critical directives regarding the council’s asset strategy.
Cllr. Matthews highlights the urgent need to address significant financial challenges by focusing resources on becoming a sustainable organisation. He advocates for simplifying the council’s commercial portfolio, reducing debt, and making “measured decisions” to ensure a modern, efficient council that prioritises essential services.
Warrington Borough Council initially invested £30 million to £30.9 million in 2017 to secure a 33% stake in Redwood Bank.
Redwood Bank officials pictured with Warrington Borough Council representatives when they arrived in Warrington
Internal deal-making figures initially targeted a recovery value of roughly £15 million. However, council chiefs openly conceded that the original sale was set to crystallise a “substantial financial loss” before macroeconomic conditions caused the entire arrangement to fail.
Following the collapse of the original transaction, the council confirmed it has already received an entirely new, further offer for its shares from an unrelated third party.
The new offer remains unverified and must still undergo rigorous due diligence checks.
The council has already burned through significant, completely non-recoverable legal and advisory fees attempting to execute the first failed sale.
Progressing this new third-party proposal will trigger a wave of new, substantial transaction costs. Finance chiefs warn these fees will ultimately add to the massive cumulative losses already inflicted on the public purse by the entire banking venture.
After being contacted by Warrington Worldwide Cllr Denis Matthews, Cabinet member for Finance, Assets and Investments commented: “As residents will be aware, WBC owns a 30.5% shareholding in Redwood Financial Partners Limited, which in turn wholly owns Redwood Bank Limited.
“In April Cabinet approved the structure of the sale of the Council’s interest in Redwood Bank, but having been advised that this sale has fallen through, a further offer from a separate third party has been received.
“A report that recommends the reaffirmation of the Council’s intention to sell its interests in the Bank, and agrees other such related actions, is to be considered by Cabinet at its meeting on 27th July.
“Residents rightly expect their Council to be focused on delivering the core services that matter most to them, and positive actions regarding commercial assets should be seen within this context.”
