‘Major challenges ahead’ for Warrington warn govt envoys
Combatting the council’s £1.4bn debt will be a long process, although government-appointed special advisers were optimistic that changes in the top team will make a big difference.
Ministerial envoys were sent to Warrington Council in July 2025 after the local authority failed its Best Value Inspection and a £1.8bn debt was unearthed – the highest for any unitary authority in England. That debt has since decreased to £1.4bn.
The envoys are Harry Catherall, Carolyn Williamson, Cllr Steve Houghton, and Phil Brooks. They are charged with aiding the council in improving its financial position. They will remain in place until July 2030.
The envoys’ first report to government, sharing their insights on Warrington Council’s progress, was published on Tuesday.
The report showed that headway has already been made on the council’s debt, which was reduced by £400m between January 2025 and February 2026. However, there is a lot more that needs to be done and the council is facing a four-year budget gap of £130m.
As to how the debt got so bad, the envoys wrote the following about the council’s investment strategy: “There is some evidence in the council, that initially, local regeneration was a driving factor, but over time the range of activities pursued became more removed from local priorities, more complex and contained much greater risk and were clearly driven by the primary purpose of generating income.”
Unfortunately, with the exception of the Housing Association Loan Portfolio, these investments failed to generate surplus income and resulted in a net loss of £109m.
Any commercial income that was garnered was also spent on council services rather than transformation programmes, as had been the initial intent. The commercial income over the past 15 years was £165m.
Over the past years, the council’s reserves have been depleted and therefore, to help get it back on its feet, it has filed for exceptional financial support from government. That request has not yet been answered.
“There are major challenges ahead for the council in delivering the level of change needed to address its financial position and there still appears to be some pockets of resistance to change in the culture of the organisation,” the envoys wrote.
“The scale of the situation has now been laid bare and going forward on the back of a positive six months, it is vital the council fully understands and accepts the severity of the position it is in.”
To help tackle the debt, the envoys have encouraged the council to review its buildings to see which can be sold. This process is already in the works.
The envoys noted key leadership changes as well, including the retirement of former chief executive Steve Broomhead last year. His replacement, Sarah Smith, is due to start in post in March.
Claire Postlethwaite joined as director of finance in January from the Greater Manchester Combined Authority. Claire Hogan has also been appointed as executive director for transformation and improvement. She is with the council on secondment from the LGA.
Major questions should be asked of the previous senior management and political leadership of the council about how they could have possibly thought this very risky approach could be justified. I have not seen the previous leadership explain their approach
By George
Clearly – from the full report – a terrible failure of both senior officers and political leadership, although perhaps more a centralised political leadership placing too much faith in those senior officers about something they really didn’t understand, and discouraging scrutiny and debate.
Many senior councillors elsewhere seem to think cheap PWLB loans are magic money and that capital spend can never affect on the revenue budget – see for example MCC having to find the money to finish Aviva Studios and then borrowing £525,000,000 to do up the Town Hall with no real scrutiny or opposition.
But Westminster is also very much responsible, for signing off all the PWLB loans without question up to 2020. At least one GM council I worked for was making money borrowing at super-low interest rates and lending it straight back out at higher ones, so Warrington weren’t the only ones trying to play the markets.
By Town Clerk
Town Clerk at 5.49pm – very clear difference between Warrington Borough Council and MCC’s investment strategies – Warrington was very clearly one that sought to generate revenue to offset the loss of Government monies from 2010 onwards. As well as pointing the finger at senior officers and politicians those external agents who advised on the transactions may also be implicated if they did not adequately flag up the very significant risks the Council were taking with public money.
MCC was investing in a cultural asset and addressing the need to invest in a Grade 1 listed building. Neither Aviva Studios or the Town Hall generate revenue for MCC. The point about real scrutiny is however well made particularly in respect of the significant increase in costs associated with the Aviva Studios.
By Anonymous
Most of those involved are currently in situ. They were borrowing from Central Government at low rates and lending it on either by way of Corporate Loans or Property Loans, hoping to make arbitrage over risky debt lending. A number of large advisory firms made a lot of money introducing these projects to the Team, who like the current UK Government, were very inexperienced and lacked the skill and qualifications to make the investments.
By Fidel