FINANCE chiefs have come under fire for buying sites – such as DW Sports and Matalan – despite the significant budget cuts the authority is facing.

As previously reported, the council has bought the building occupied by DW Sports, on Academy Way, in a deal totalling £4 million.

It is also acquiring the property occupied by Matalan, off Winwick Road.

Details of the transaction remain a secret but the move could generate £393,000 a year for the council.

Similar negotiations have been taking place across the country – but why is council taking this new approach?

Cllr Russ Bowden, who became executive board member for corporate finance in May 2012, insists the deals will help save crucial services and moved to dispel myths over the council's finances.

He said: "There is a very clear difference between the council's revenue spending on services and its capital budget.

"The council's revenue budget is based on income from central Government grant, council tax and our 27 per cent take of business rates.

"The council has the legal authority to borrow money – as part of its capital budget – for capital expenditure purposes.

"We have this misunderstanding between capital and revenue – it is crucial to get the message across to our residents.

"There is a general assumption that we have millions to spend on buying sites, such as DW and Matalan.

"However, there is a big difference between capital and revenue.

"Legally, we can't use capital borrowing to fund services but there are many things we can do with capital borrowing.

"It is all subject to risk assessment and due diligence to make sure we are making sound decisions.

"Our recent investments are a bit like a buy to let mortgage.

"We borrow money and pay back the borrowing over, say, 25 years.

"At the end of it we own it but in the meantime we are generating a steady income stream through the rent over and above the cost of borrowing.

"For example, the most recent deal could see us making almost £400,000 a year.

"We can then put that money coming in into services.

"I make no apology about taking sound financial decisions in order to maintain services – the alternative is yet more service cuts.

"We have done very well in Warrington to protect frontline services but in the last year residents have started to see the impact that is having.

"Without generating income like this, the council would be in a very difficult position.

"Since I took over responsibility for finance, the work with our officers has helped us to make cuts and savings, while continuing to deliver crucial services.

"In the last two years alone we have generated £13 million of income through these finance initiatives – without that, we would be struggling far more."

Cllr Bowden (LAB – Birchwood) will deliver the 2017-18 budget to the executive board on February 13 before it is put to a vote at full council on February 27.