Best value inspector to examine North West unitary saddled with £1.8bn in debt
The Department for Levelling Up, Housing and Communities (DLUHC) has announced a best value inspection at Warrington Borough Council to investigate the circumstances that have seen the local authority's debt rise to almost £2bn.
The former interim Local Government and Social Care Ombudsman, Paul Najsarek, will carry out the inspection.
The decision was announced in a letter sent Wednesday (8 May) from Max Soule, DLUHC's Deputy Director - Local Government Stewardship, to Professor Broomhead, Warrington's Chief Executive.
Soule wrote that the Department has appointed an inspector in order to secure direct, independent assurance that the council "is making arrangements to secure continuous improvement in the way in which its functions are exercised, having regard to a combination of economy, efficiency and effectiveness".
He said the decision came partly in response to Warrington's debt, which, as of March 2023, was at £1.80bn.
This figure is 5.5 times its total service expenditure, meaning Warrington has the second highest borrowing relative to its size for a unitary council in England.
He also cited concerns raised in a July 2023 CIPFA capital review, which found that the authority's portfolio of debt-funded investments was very large and uniquely complex.
"The [CIPFA] review also found that while senior officers showed grip a number of areas such as risk management could be sharpened to protect the council from shocks," the letter added.
DLUHC has directed Najsarek to inspect areas in relation to the authority's functions where it has concerns, "namely the governance; section 151 of the Local Government Act 1972 and the strength of associated audit with particular attention to the decision making and scrutiny and risk arrangements."
The letter also directed him to consider the capacity and capability across the organisation, particularly the finance function, and whether this is sufficient to meet the Best Value Duty.
It also called for an inspection of the plans and capacity to address the recommendations made by the CIPFA capital review and to control its debt levels and reduce them over time.
In addition, it directed Najsarek to consider what an appropriate level of capital risk would be for the council, examine the council's investment portfolio and consider the prudence of financial decision-making.
On overall decision-making, Soule's letter added: "Given our concerns relate to broad decision-making, and whether the standards expected for effective and convenient local government are being upheld, the inspection will consider decision-making in relation to those functions, encompassing leadership, governance, organisational culture, use of resources and impact on service delivery."
Najsarek will report his findings to the Secretary of State by 30 August 2024.
A spokesperson for Warrington Borough Council said: "The inspection will undoubtedly have our full cooperation, and we will work positively, openly and at pace with the inspector.
“Equally, we welcome the CIPFA review report being made public, following their review in February 2023. We have supported the report being made public since receiving the draft report in September 2023.”
It added: "While DLUHC recognises that we have taken steps to address areas for improvement, we will continue to identify any learning and further improvements that can be made as part of this inspection process."
The news of the best value inspection into Warrington came in a batch of intervention announcements from DLUHC on Wednesday.
The Department revealed a best value inspection into Spelthorne Borough Council, a change in intervention at Liverpool City Council, and a best value notice for South Cambridgeshire District Council.
Adam Carey
