Minister for local government and English devolution Jim McMahon has extended the time period for Best Value Inspection reports at Warrington and Spelthorne councils until 29 November 2024.
The reports were initially scheduled to be submitted by 30 August.
Former secretary of state Michael Gove commissioned the inspections because of concerns over high levels of debt at both authorities.
At Spelthorne, the previous government deemed the council’s debt-funded investments to be a “clear financial risk” after it considered the results of a CIPFA capital review.
The inspection is being led by local government senior leader Lesley Seary. A request from Seary for additional assistant inspectors is being considered by the Ministry of Housing, Communities & Local Government, while the scope of the inspection remains unchanged.
In a recent article in Room151, Spelthorne Borough Council’s deputy chief executive and section 151 officer Terry Collier detailed why he believes the authority’s long-term borrowing plan is secure, with there being a strong focus on risk mitigation at the council “from day one”. Spelthorne’s investments will generate £500m towards services over 50 years, he said.
At Warrington, a Best Value Inspection was commissioned after the government raised concerns over “extremely high levels of debt” and “controlling” management arrangements that were highlighted in a CIPFA assurance review into the council.
Paul Najsarek was appointed to lead the inspection. His request for assistant inspectors is being considered, the Ministry of Housing, Communities & Local Government said, while the scope of the inspection also remains unchanged.
A recently published Local Government Association corporate peer challenge report into Warrington noted the council’s position that its investments generate £23m per year in additional revenue and help keep essential services running, but said that the authority would benefit from providing a “detailed narrative around what this has meant in practical terms”.
The peer challenge also said that Warrington’s overall borrowing and finance risk threshold should be clearly established as managing medium term risk “will be crucial to the authority’s financial sustainability”, with the council’s approximate £1.8bn in borrowing and reliance on investment returns giving it a “very different” risk profile to many other local authorities.
Minister for local government and English devolution Jim McMahon will be one of the key speakers at this year’s Local Authority Treasurers Investment Forum (LATIF) & FDs’ Summit, taking place in London on 19 September. For more information on the event and to attend, please click here.
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