WARRINGTON Borough Council could be required to make 'additional disclosures' when borrowing purely to invest in commercial properties to fight 'devastating cuts' under Government plans.

The Department for Communities and Local Government's (DCLG) consultation on the 'proposed changes to the prudential framework of capital finance' has now concluded, with ministers hoping that changes will come into force in the 2018-19 financial year.

Under the proposals, local authorities would be placed under further scrutiny to ensure that their risky investments are deemed appropriate.

The DCLG's consultation paper stated: "The Government believes that it is important that councillors, or the equivalent, understand the total exposure of their local authority due to borrowing and investment decisions and that this information is presented in such a way that allows them to compare any change in exposure from year to year.

"Borrowing solely to invest rather than to deliver statutory services or strategic objectives has always been considered to be borrowing in advance of need.

"The Government believes that it is appropriate for the revised guidance that recognises this and requires additional disclosure by local authorities who borrow solely to invest in revenue-generating investments."

The authority has borrowed around £240 million to invest in commercial properties since 2010.

Last year's controversial purchase of Birchwood Park followed deals to acquire land that houses DW Sports, on Academy Way, Matalan, on Winwick Road, and Pure Gym, on Fennel Street.

The town's Conservatives group believes 'borrowing to become a commercial landlord is outside of the council's remit'.

A spokesman said: "Warrington Conservatives do not back the council's practice of risky borrowing to invest in commercial properties.

"It's the council's primary role to make sure they use their resources to provide services to residents.

"Being the guardians of the public purse it is right that any temptation to take risks is prevented.

"This is not a new occurrence, many will remember the 1990s and the collapse of the BCCI Bank, with some councils, including neighbouring Wigan Council, amassing losses of millions of pounds of taxpayers' money which had been irresponsibly invested.

"Borrowing to invest, or support public services, that directly benefit residents is the right thing to do but borrowing to become a commercial landlord is outside the council's remit.

"In principle, it is hard to see why councils are risking taxpayers’ money to speculate on property or similar schemes.

"There are no one-way bets on this type of speculation.

"The role of our council should be to focus on the provision of high quality services, as cost-effectively as possible.

"If any council intends to raise borrowing and risk public funds to make speculative investments then, as a minimum, they require total transparency and full scrutiny."

But deputy council leader Cllr Russ Bowden, executive board member for corporate finance, has hit back.

He said: "The Government launched this consultation last year and the council's response was agreed by the executive board in December.

"Warrington has established a strong track record of commercial investments and was asked to co-author the recent CIPFA guidance on financial risk assessment and due diligence.

"Our enterprise theme will generate a net income to the council of around £25 million a year by 2019-20.

"Without this income, residents would be facing devastating cuts to the services that they value and rely upon.

"Tory Government austerity cuts aren't working but have taken more than £100 million out of the council's annual budget.

"We are doing our utmost to maintain services and not simply pass the Government funding cuts onto the people of Warrington, particularly the most vulnerable.

"The two Tory members on the council have been fully supportive of the enterprise approach and the generation of income from financial investments.

"This includes access to detailed information through the cross-party treasury management board.

"It might be helpful if Warrington Conservatives got a more informed view by speaking with their colleague on the council."