Financially struggling Warrington Council is facing a net loss of nearly £110m due to its investment strategy and faces a ‘significantly challenging period’, ministerial envoys say.
The local authority’s debt has increased to £1.8bn in large part due to its commercial investment programme, which prompted the Government to send in envoys last July.
In their first report, the envoys detail how except for the Housing Association Loan Portfolio, ‘all remaining investments have failed to generate surplus income and overall have resulted in a net loss over the period of circa £109m based on the most recent asset valuations.’
The report also said there were ‘major challenges’ ahead for the local authority and warned of ‘some pockets of resistance to change in the culture of the organisation’.
However, despite these difficulties, the envoys noted they were ‘confident that the council are now showing clear signs of acceptance to challenge and change.’
Leader of the council, Cllr Hans Mundry, said: ‘The report reflects what we as a council willingly accept – that we need to address the failings with our commercial portfolio, that we need to work quickly to address our financial challenges, and that we need to drive widespread organisational changes to ensure that we can become an efficient, stable, and sustainable, organisation.’
‘As the ministerial envoys reflect in their report, the next six months for us as a council will be crucial. We need to make difficult decisions to begin closing our budget gap,’ he added.
