IN the wake of Croydon Council issuing a Section 114 notice this week, it is essential that Warrington Borough Council urgently reassesses its own investment strategy and change tack to a more responsible course.

There are striking and worrying similarities in the financial positions of these councils, including borrowing themselves into debts reported to be in excess of £1.5billion and accumulation of a sizeable portfolio of commercial property.

Without a rapid and drastic change, there is a very real risk that Warrington follows Croydon down a path of financial ruin.

Some Warrington councillors continue to insist their investment portfolio remains in a strong position and is low risk.

Heading into what is almost certain to be a difficult economic climate, particularly for commercial property, I am entirely unconvinced the council’s financial projections can be guaranteed on the basis of the limited evidence available.

Some local councillors like to point to the £20million of net annual income generated by the council’s investments as an indication of success.

As a return on borrowing reported to be over £1.5billion, I suggest this is wholly inadequate and an indication the funds are not being used responsibly.

The closure in August of DW Sports, who occupied a council-owned building, should be seen as a red flag to the risk inherent in the council’s substantial investments in commercial property and a situation that could be repeated frequently over the coming months and years, leaving a devastating hole in the council’s financial future and a heavy burden for local taxpayers.

I suggest the following approach would be a more responsible approach to investment of borrowed funds.

First, investment of funds that Warrington borrows should stay in Warrington.

Instead of solar farms in Hull, York and Cirencester; an energy company headquartered in Scotland; and offices in Manchester, this money should be invested in the businesses and residents of Warrington.

Second, borrowed funds should provide tangible benefits to the people of Warrington, beyond just a simple investment return, in the form of jobs, housing, services or infrastructure.

Third, investments should seek to reduce future expenditures.

This could take the form of investments in new and upgraded infrastructure that will reduce future operation and/or maintenance costs.

Finally, and most importantly, the way these borrowed funds are being spent needs to become far more transparent than the current situation and a greater effort must be made to engage and consult with the community to ensure borrowing and investment remains aligned with the values and support of the residents of Warrington.