COUNCIL chiefs believe buying Birchwood Park will help plug 'significant funding gaps in the face of continued austerity'.

But leading councillors have been warned of the potential ramifications of such a move – days before they vote on the proposed deal.

As reported by the Warrington Guardian on Friday, the deal, worth in the region of £210 million, was discussed by Labour councillors at their group meeting on Thursday night.

It would be by far the biggest purchase made by the council and follows deals to acquire land which houses DW Sports in the town centre, on Academy Way, and Matalan, on Winwick Road.

The matter will come before the executive board at a special meeting on Monday following backing from members of the Labour group who were in attendance.

In his report to members, deputy council leader Cllr Russ Bowden, who is also executive member for corporate finance, said there is an 'opportunity to secure a new, net income' for the council.

He added: “This can be achieved by acquiring a property in Warrington for financial investment purposes to support the medium term financial plan.

"Budget cuts and austerity measures have seen significant funding gaps in local authorities’ finances.

"Like most local authorities Warrington is finding it increasingly difficult to deliver a balanced budget in the face of continued Government austerity policies.

"Income generation is now at the forefront of many local authority financial strategies.

"Local authorities can take a longer term view of income and capital growth than most of the current investment market.

"As a council, we also have access to cheap debt finance, cheaper than most of the current investment market.

"Local government last year doubled its spending on acquiring land and buildings.

"The Department for Communities and Local Government has confirmed that capital expenditure and receipts for the whole of 2016-17 reveal that land and building purchases rose from £1.2 billion in 2015-16 to £2.8 billion during 2016-17, a rise of 133 per cent largely attributed to a desire among councils to seek commercial returns to prop up services.

"If another party acquires the property, it is anticipated that it would be run prudently and efficiently.

"However, the net income returned to the owner is very likely to be spent elsewhere, outside of Warrington, rather than invested back into the town in providing much needed services for local people."

Cllr Bob Barr, leader of the Liberal Democrats, has highlighted his fears ahead of Monday's meeting at the Town Hall.

He said: "Warrington Borough Council’s proposed investment in Birchwood Park is one of the largest, and riskiest, money-making ventures that the Labour administration has undertaken so far.

“Investing in a successful business park at a fair price in a town that is doing well should not be a significant risk.

“But that is what local authorities said when placing their money for a good return with Icelandic banks. Those speculations ended in tears.

“In this investment Warrington is on its own.

“If it goes sour, as it may well do if the nuclear sector suffers a serious downturn because of Brexit, there will be no one to bail us out.

"The town will suffer a loss of well paid jobs and a non-performing investment.

“While the Liberal Democrats understand why Labour have turned to relatively risky banking and speculative investment to support their spending ambitions, they should be straight with the council and the public about the level and nature of the risks they are incurring.”

The executive board is recommended to approve the ‘principle of acquisition’ and approve the ‘holding structure for the asset’ as will be set out in part two of the report, along with the financial details.