I CAME across an interesting fact while I was doing a little light reading over the weekend.

According to the Chartered Institute of Public Finance and Accountancy, if Warrington Borough Council was a commercial entity, it would be big enough to be listed on the London Stock Exchange FTSE250.

Of course, it isn’t a private commercial entity but by now, it is well documented that elements of the council’s business and financing certainly operates in the commercial world.

As financial support from central government has reduced, we have witnessed the amazing sight of Labour-run councillors acting more as entrepreneurs, landlords and property developers than any kind of socialist-led organisation.

It has borrowed eye-watering amounts of money to buy everything ranging from solar farms to a stake in a challenger bank, from gyms to ‘big shed’ distribution warehouses – more Duncan Bannatyne than Kier Hardie.

In fact, Warrington is one of a number of councils that has a commercial credit rating which allows it to borrow money on the open market as well as from the government-backed Public Works Loans Board (PWLB).

There’s a certain logic to all this borrowing.

Warrington council chiefs insist commercial properties are being bought in an attempt to offset the impact of cuts in government funding by boosting income through rent.

Council leader Cllr Russ Bowden is unapologetic about using commercial business dealing to fund alternative sources of income.

“Should councils be making investments in property and acting in a commercial way? My honest answer, hand on heart, is no”, he said. “But, equally, councils should be getting properly funded for the very important job they are asked to do.”

He says the controversial commercial strategy is key to maintaining vital services for residents.

“For every one of these that comes forward, there is probably another four or five that have been dismissed or fallen by the wayside,” he added.

Perhaps the key is making the ‘right’ commercial decisions, unlike Croydon Council which last month issued a Section 114 notice – effectively declaring itself bankrupt.

To be fair to Croydon, it is a small player compared to Warrington. Croydon spent more than £210m over the past five years to acquire properties ranging from a shopping centre to a hotel in the hope of generating a steady stream of rental income. While this might have worked before coronavirus, closures during the pandemic sharply reduced the income they received.

The Croydon Park hotel, acquired in September 2018, went into administration in June this year, and the Colonnades retail park, acquired in May 2019, closed in March 2020.

Compare that with Warrington’s £45m deal to buy a major logistics hub in St Helens or the £137m to fund an office development as part of the Salford New Bailey scheme close to Manchester city centre, which will become home to a ‘significant telecommunications company’.

As part of my ‘day job’, I spend a lot of time researching and reading about the property market in the north west and I can tell you both of these deals look like really good investments to me.

But I do wonder if the lending gravy train is about to hit the buffers.

According to Jonathan Ford writing in the Financial Times last month, the government has become a bit jumpy about the level of indebtedness some councils find themselves in (I think Warrington would come into that category).

We’ll just have to see where that leave’s Warrington’s strategy.

I started with an ‘interesting fact’ so I think it’s only right I finish with one from Warrington Council’s ‘Capital Strategy’ document of February, so here goes: “At the end of 2022/2023 it is forecast that the council’s debt will be £2.548bn.” Yes, billion.