Commercial approach has failed, says council

A Cheshire council has said its controversial commercial approach "has failed" as it identified an extra £40m budget shortfall - with cuts to some services under consideration.

Warrington Borough Council had built up about £1.8bn in debt, mainly linked to its commercial investments, which led to government intervention last year.

Denis Matthews, the council's cabinet member for finance, said Warrington had borrowed too much and taken on too much risk, and would now consider the future of all of the council's commercial assets.

He added an initial £90m funding gap revealed in December had since been revised to £130m because of the impact of its commercial programme and six years of unaudited accounts.

The council had previously said its commercial portfolio had provided an income

'Borrowed too much'

But Mathews said it was now clear the commercial approach "did not provide the level of sustainable returns anticipated".

"We borrowed too much, and we took on too much risk – to the point where it is now clear that our overall commercial approach has failed," he said.

"The value of our portfolio has declined significantly, with a potential liability of around £275m. We are developing a plan to assess the future of each of our commercial assets. However, there will be no 'fire sale' of our assets."

A report to councillors identifies £40m of savings that needed to be made.

They include reviewing adult social care services including supported accommodation, day care provision, nursing care and home care visits.

There are also proposed changes to parking including introducing charges for resident parking permits in areas where they are currently free, charges for on-street parking in the town centre and Sunday parking fees at Times Square.

The authority is also planning to review leisure services - which it said could mean facilities in a smaller number of locations - close the town centre CCTV control room and stop funding the annual Warrington Walking Day.

The council said in December it had asked for exceptional financial support from the government, which could include a council tax rise of more than the usually permitted 4.99%.

It said if it does not receive it, its reserves cannot support the budget and it would need to issue a section 114 notice - which is when a council is effectively bankrupt.

The authority will find out in February if it has been approved for exceptional financial support before the budget is discussed by the full council in March.

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