WARRINGTON Borough Council says its investments have generated a return in the region of £100 million in the past four years.
A budget monitoring report for quarter one of 2024-25 came before the cabinet at its Town Hall meeting on Monday.
It stated that, at the end of quarter one, the financial forecast outturn for 2024-25 is an overspend of £28.985 million.
Cllr Denis Matthews – who is the cabinet member for finance, assets and investments – said: “I would like to make it crystal clear to every Warrington resident that the council’s commercial programme and borrowing are not contributing to the overspend position, indeed, we need to acknowledge that our commercial approach is continuing to help us manage our budgetary pressures.”
Furthermore, he said the £23 million “profit per year” which the commercial activity generates helps to support essential services and without it the council’s financial position would be “significantly worse”.
Council leader Cllr Hans Mundry said “we have to take actions now to make sure that the deficit doesn’t materialise in reality, so we’re taking actions to make sure the overspend doesn’t occur”.
He also said the council has been spending the revenue generated from the investments “over a number of years” and delivering services for people “time and time again”.
Cllr Mundry added: “From our investments starting, to date, we’ve generated – after servicing it, the loans themselves, and putting some money away to one side – over £100 million has been generated by the investments over that period of time, and has actually served the people of Warrington to make sure they get a better quality of life or the best quality life we can possibly do.”
He also said the £100 million was a “ballpark” figure.
The council says, in the last four years, its commercial portfolio has generated a return in the region of £100 million.
In relation to the comment about putting some of the money “away to one side”, the council said a proportion of investment income contributes “towards a strategic risk reserve given our diligent approach to commercial activity” – and this reserve currently stands at £16.2 million.
Furthermore, as recently reported, the council leader said he wants to “reduce” council investments and have “less dependence” on them – while replacing the money they generate with public funding.
Asked if the council is currently looking to “reduce” some of its investments, a council spokesman said: “We would be reliant on an increase in public funding to help keep our day-to-day services running, if we were to significantly reduce our portfolio of investments, which continues to generate around an average of £23 million a year, which helps to directly fund our frontline services.
“We continually review our investment portfolio and exit investments when the conditions are right and it would be economically advantageous to do so. We expect our current level of borrowing to reduce over the medium/long-term, in a measured and careful way.
“Generally, we could decide to sell our assets at any point, if we thought it was the right thing to do and the market conditions were positive. But we would lose the benefit of the money generated from the assets and this could impact on our frontline services.”
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