Minister minded to send ministerial envoys into Warrington

The Local Government and English Devolution Minister has said he is "minded to" send ministerial envoys into Warrington Borough Council after a damning best value inspection report highlighted concerns about the council's investment decisions and governance.

Jim McMahon's decision – which was detailed in a ministerial statement on Thursday (8 May) – followed the publication of the best value report, which saw inspectors say they are "not confident Warrington Borough Council can face its financial challenges without external support".

As of March 2023, relative to size, Warrington had the second highest level of debt for a unitary authority in England (£1.8 billion).

The Government sent a team of best value inspectors into Warrington in May 2024, following a capital assurance review carried out by the Chartered Institute of Public Finance and Accountancy (CIPFA).

The inspectors' report said the council shows a number of weaknesses in meeting its best value duty in the areas of leadership, culture, governance and use of resources.

Paul Najsarek was Lead Inspector and was supported by Richard Paver and Michael Hainge.

The team concluded that: "The council is in a very challenging position with a complex high-risk borrowing and investment programme; no agreed strategy for dealing with it; likely reductions in income and increases in costs of the programme; an increasingly precarious revenue budget position with rapidly diminishing reserves, which might be found to be overstated when the audit of the outstanding years commences; and a lack of track record in delivering large scale savings at pace."

The inspectors recommended the appointment of commissioners to the council, noting that the council's previous responses to external reviews and its limited capacity "do not give confidence" that the council acting alone recognises the severity of the issues it faces.

The inspectors also recommended the council review its internal governance structures and update them in alignment with the latest corporate governance codes to ensure accountability and effectiveness.

In it addition, it called for the council to review the structure and reporting lines of its audit and corporate governance, and scrutiny committees.

It suggested changes that could include appointing an independent chair for the audit and corporate governance committee, ensuring it submits reports periodically to the cabinet, and fostering cross-party collaboration in scrutiny processes, with the potential for an opposition member to chair.

Speaking in Parliament on Thursday, McMahon said after carefully considering the inspectors' report and other material, he was satisfied that Warrington is failing to comply with its best value duty in relation to continuous improvement, governance, leadership, culture, and use of resources.

"I am therefore minded to exercise powers of direction under section 15(5) and 15(6) of the 1999 Act to implement an intervention package that ensures the Council’s compliance with its Best Value Duty", he said.

The proposed intervention includes the appointment of 'Ministerial Envoys' who specialise in leadership, governance, finance, and commercial investment.

He described the envoy model as representing a "further evolution of our approach as this government continues to test and learn how best to support councils to recover and reform".

He added: "As part of our commitment to reset the relationship with local and regional government, I am seeking to develop the ‘envoy’ model, which prioritises building a council’s own capacity to improve, by supporting its recovery primarily with expert advice, rather than taking over functions."

Under the model, he said he expects the council to remain responsible for driving its own improvement with the support, challenge, and advice from the Ministerial Envoys.

Some envoys will have power to exercise certain and limited functions to be treated as in reserve, intended to be used only as a last resort to ensure compliance with the best value duty, he said.

He proposed the intervention be in place for five years, with the options for handing back functions to the council earlier in light of progress.

Under the intervention, the council will be directed to prepare and agree an Improvement and Recovery Plan and progress against the plan must be demonstrated, through regular reports from the ministerial envoys.

Warrington has since been invited to make representations on the report and proposed intervention package by 22 May.

A spokesperson for Warrington Borough Council said the local authority welcomed the proposal to appoint envoys, adding: "Our workforce is determined and motivated to make a difference, the standards of our day-to-day services are good, and we are proud of our work to support and enhance Warrington’s strong and thriving local economy.

"We’re keen to take the opportunity to embed improvements in the areas identified, with the support of the appointed envoys, so that ultimately we can demonstrate that we are a council that is well-governed, has effective leadership, works openly with residents and communities, and uses resources effectively.

"To this end, it is our utmost priority to demonstrate these improvements to our residents and businesses."

Adam Carey