Warrington Borough Council in Cheshire is facing a financial crisis after government-appointed envoys warned that the authority could lose around £109m from its commercial investments. The warning comes in a new report that also reveals the council has run up debts of £1.8bn and faces a budget shortfall of £130m over the next four years.
The ministerial envoys, who were brought in by the government to help sort out the council’s finances, have published their first report. It says the council’s investment strategy over the past 15 years has been a failure, with almost all commercial ventures losing money.
The report states that the council borrowed huge sums to fund regeneration projects and business ventures. At its peak, the authority had accumulated £1.8bn in debt – making it one of the most indebted councils in the country. While this has been cut to around £1.4bn, the envoys warn the situation remains extremely risky. The value of the commercial portfolio has fallen sharply, with a potential liability of around £275m now hanging over the council.
Cllr Hans Mundry, the council leader, said the authority accepts the findings of the report. “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,” he said.
To try to plug the gaps, the council has agreed to raise council tax by 7.48% for 2026-27. It has also identified £40m in initial savings and received emergency funding from the government, including £87m for this financial year and £92m for next year. The Ministry of Housing, Communities and Local Government has provided this exceptional financial support to prevent the council from effectively going bankrupt. The council faces a projected £39m deficit for the current financial year.
The envoys, whose work costs around £363,000 per year, say the next six months will be critical as the council tries to balance its books and restore confidence in its financial management.
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