Credit agency withdraws rating from Warrington Council

Time Square in Warrington

Credit reference agency Moody’s has withdrawn its credit rating of Warrington Borough Council due to the inability of the Council to produce audited accounts.

Their concerns come after a government commissioned report into the council’s finances was finally published in May 2024, which recommended an independent, expert panel should be created to oversee the complex investments made over the years by the debt-ridden council. 

The report from the Chartered Institute of Public Finance and Accountancy (CIPFA) was commissioned by the government because of Warrington Council’s £1.8bn debt.

Moody’s acknowledged that the UK local government sector as a whole has problems “in securing auditors of sufficient capacity and capability.”

In a statement this morning (17 June 2024) Moody’s said: “The rating withdrawal is driven by the lack of sufficient, current audited financial information caused by an audit backlog. Even though the audit for the fiscal year 2019 has been completed recently, there remains a backlog of five unaudited accounts for Warrington, including that of fiscal year 2024, for which draft accounts are available. The limited prospects towards a timely resolution of the audit backlog in England means that Moody’s considers it does not have sufficient information to maintain the ratings.”

“Moody’s has decided to withdraw the ratings because it believes it has insufficient or otherwise inadequate information to support the maintenance of the ratings.”

The council’s investments include the ownership of an Asda supermarket in Hulme, Manchester, solar farms in York, Hull and Cirencester, a BT development being built in Salford and a third share of Redwood Bank, which has created just 30 jobs in Warrington.

The Council also paid £18m for a 50% stake in Together Energy in 2019, which went bust in 2022.

The assets include a complex business loan book and a loan to Matthew Moulding’s THG. 

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