17 June 2024 , 11:15
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Ratings agency Moody's has withdrawn its credit rating for Warrington Borough Council due to major debts.
The council, led by Warrington Borough, has informed bondholders that the withdrawal of the rating occurred because of "the inability of the council to procure that its statements of accounts are audited by external auditors". The Labour-run council is facing a £1.85billion debt and has come under close scrutiny for several investments.
Just last month, it was reported by the Financial Times that the local Cheshire authority had denied essential information to its auditor, Grant Thornton, limiting their ability to review its books. After a critical review of Warrington's "very large and uniquely complex" set of debt-driven investments last year, an inspector was appointed by the Government in May to investigate the council's legal compliance.
Auditors have only recently completed their review of Warrington's accounts for the fiscal year ending March 31 2019, which means the council is years behind legally required reporting. Warrington Borough Council stated they were unable to finalise recent audits "due to challenges which apply across the local government sector as a whole in securing auditors of sufficient capacity and capability".
On Monday, the council released a statement saying they are in the process of securing an alternative rating from another EU-recognised ratings agency. Warrington Borough Council has built up its debts amid a raft of investments in a roughly £1.5 billion portfolio, which included now-collapsed energy firm Together Energy.
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It has also reportedly provided loans to ecommerce entrepreneur Matthew Moulding to fund a property deal for his THG business. Its investments also include a number of supermarkets in Greater Manchester and solar farms in York and East Yorkshire.