Concerns over council investment labelled as ‘financial fiasco’

The Conservatives have highlighted that it has ‘finally been revealed’ that the Labour-run council’s £10 million investment in 2021 for shares in a Birmingham property company now has an estimated value of just £1.3 million.

They say this news follows challenges from the Conservative councillors’ group on the council for the Labour-run council to ‘come clean’ with residents regarding the extent of the failure of their investment in Mailbox REIT Plc.

The Conservative councillors group believes that this investment decision was ‘unconstitutional’, and that the truth about the financial difficulties was ‘hidden from councillors’.

They highlighted that the extent of the problem only came to light after a press article in December 2023 on inews.co.uk – and the Tories have now made an official complaint.

Cllr Ken Critchley, Conservative, said: “WBC’s Mailbox investment raises many difficult questions for WBC as it’s the latest financial disaster that is likely to lose Warrington residents’ money.

“This is another example of embarrassingly bad investment decisions by WBC. What is worse is the way this investment was reported to the audit and corporate governance committee throughout 2023. A paper from the Conservative group to the council shows the extent of the investment misreporting and how the investment decision is, in our view, not constitutional.”

The Conservatives have highlighted that, at the council’s audit and corporate governance committee meeting on February 8, Cllr Critchley ‘tried to persuade’ the chair of the meeting to allow questioning of officers over the reports they had presented to the committee throughout 2023. However, they added that, Labour councillors ‘sought to avoid a discussion on the subject and the meeting then descended into chaos when a senior council officer decided to walk out’ – and that the conduct of this meeting has ‘subsequently been the subject of complaints both to and from the council’.

Commenting on the meeting, Cllr Critchley said: “£10m of public money now has an estimated value of £1.3m.

“Perhaps this explains why the council did not want its latest fiasco revealed. Without the press picking this matter up in late 2023 we may still be none the wiser.

“This is a shocking situation. Warrington deserves better than the Labour administration who have allowed this latest financial fiasco.”

Labour’s Cllr Denis Matthews, the council’s cabinet member for corporate finance, has issued a statement in response.

He said: “I understand that we have entered an election period but if the local Conservative group had dedicated half as much time to lobbying their own Government for a fair long term funding settlement for all councils, rather than continually providing opposition for oppositions sake, then in my opinion they would have perhaps achieved something that they could demonstrate to their electorate.

“After three years as the official opposition on Warrington Borough Council what have they actually delivered? What has been their positive contribution? What difference have they made to the lives of their residents and the communities that they were elected to serve?

“These questions are not for me to answer, but when the people of Warrington cast their vote in May I ask them to consider if they feel the Conservative Party have delivered for them and their family.

“As Cllr Critchley will be aware, a review into concerns expressed by himself and Cllr Balding regarding treasury management involvement into Mailbox was presented to members of the audit and corporate governance committee on 8th February 2024. This report is publicly available and can be found on the council website. I would encourage everyone to read this report if they are seeking greater clarity around the matter. It is my opinion that this report presents a very different picture to that of the Conservative groups press release.

“The Labour administration continue to be committed to the open and transparent conduct of our town’s finances. It is the audit and corporate governance committee that are charged with the scrutiny of treasury management, and it is a matter for individual members of the committee as to whether they support the recommends put forward by Conservative members after considering the merits of their proposals.

“I am always happy to speak with Cllr Critchley and any other member of the Conservative group should they have positive ideas that they feel would be to the benefit of the residents of Warrington. However, debate via press statement does little to improve lives or promote our communities.”