WARRINGTON Borough Council’s £1.6b “risky” investments in capital projects could be under review by the Government after Warrington South MP Andy Carter called for an urgent inquiry into excessive council borrowing.
In a House of Commons debate today (17/12/20) on Local Government Finance the Conservative MP for Warrington South urged the Secretary of State for Communities Robert Jenrick MP, to hold an inquiry into Council borrowing and investment strategies.
It comes as Croydon Council in London recently declared itself “bankrupt” by issuing a Section 114 notice due to its “severe and ongoing” financial difficulties, including owing around £1.5 billion.
The MP for Warrington South has serious concerns that Warrington Borough Council could be next and that the Labor-run Council has taken what could have been a sensible investment strategy and allowed it rocket out of control, with reckless borrowing of more than £1.6billion on projects that fall outside of the Town.
Mr Carter said:
I’m not against a sensible level of borrowing to fund some investments and to build new facilities for local residents like leisure centres – but Warrington Labour have taken their borrowing to a whole new level within excess of £1.6bn debt and I’m seriously concerned that the Council could shortly be following the same fate as Croydon.
Warrington South Residents and local stakeholders deserve a level of transparency; they want to know that there is effective governance and effective oversight over decision making but accounts still haven’t been signed off back to 2017/18. The consequences as we’ve seen in London and Nottingham can be very serious.
Careful Financial management is always going to be a part of life for councils, the Government has provided funding additional support in recent months to cover Covid costs. I’m deeply concerned that Warrington Labour simply doesn’t understand when enough is enough, if their risky investments fail, the debt will ultimately fall onto the shoulders of council taxpayers.
That’s why I’m calling for an urgent inquiry so we can put a stop to unrestricted spending and make local councils more accountable to the people.
Responding in the House, saying he may look into the financial affairs at Warrington after his statement, Secretary of State RT Hon Robert Jenrick MP said:
We all want to see Councils have access to funding at low-interest rates to fund housing and regeneration within their own boundaries, we do not expect local Council’s to be indulging in risky financial ventures, either within their own area or beyond, that is a mistake, and many local Council’s quite clearly do not have the financial management skills to do that.
The Minister went onto say that the Government needs to: “bare down on Councils that are using taxpayer’s money as if it were monopoly money and to respect the individuals who are actually paying the bills at the end of the day.
Mr Carter has also welcomed news of a review of the effectiveness of Local Authority External Audits announced today, particularly given accounts dating back to 2017/18 are still to be signed off, despite constant promises by the Council Leader that they would be presented to the Council.