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The Lowdown Hub

One English council’s painful journey into investingHighly leveraged Warrington local authority

local authority under fire after taking stake in energy company that went bust

A Labour-controlled council in north-west England, which has come under fire for its strategy to generate income, has strongly defended its record and insisted it is on course to deliver a balanced budget this year.

Cathy Mitchell, deputy leader of Warrington borough council in Cheshire, said the local authority’s portfolio of investments and loans would deliver a net return of more than £20mn this financial year, without which public services would be decimated. “We are ready to deliver a balanced budget,” she added.

Warrington is one of many local authorities in England that have made investments to boost their incomes and offset cuts in central government grants that followed the financial crisis. But several councils have run into severe financial difficulties as a result.

Warrington started lending in a small way in 2013 by bankrolling social housing landlords in the town, which has a population of 212,000 and is located midway between Liverpool and Manchester.

But the council’s portfolio of loans and investments has since expanded to finance the transformation of the town centre, develop outlying business parks and create neighbourhood hubs with health centres and libraries.

Cathy Mitchell: ‘We are ready to deliver a balanced budget’ © Andrew Collier