Warrington council

[Tenacious]

1.85B in the red. For one council. Seems like they've been spending the cash like no tomorrow.

So what happens next? Bailiffs go in? Nope, didn't think so.

https://www.warringtonguardian.co.uk/news/24391312...

[The Leaper]

Tenacious said:

1.85B in the red. For one council. Seems like they've been spending the cash like no tomorrow.

So what happens next? Bailiffs go in? Nope, didn't think so.

https://www.warringtonguardian.co.uk/news/24391312...

Where have you been? This is nothing new...plenty of other councils in the same situation eg Croydon, Woking etc. They all seem to have been investing their funds in dubious developments: Croydon even bought a hotel, now closed down.

R.

[Tenacious]

The Leaper said:

Tenacious said:

1.85B in the red. For one council. Seems like they've been spending the cash like no tomorrow.

So what happens next? Bailiffs go in? Nope, didn't think so.

https://www.warringtonguardian.co.uk/news/24391312...

Where have you been? This is nothing new...plenty of other councils in the same situation eg Croydon, Woking etc. They all seem to have been investing their funds in dubious developments: Croydon even bought a hotel, now closed down.

R.

So what happens next then?

[kiethton]

Tenacious said:

The Leaper said:

Tenacious said:

1.85B in the red. For one council. Seems like they've been spending the cash like no tomorrow.

So what happens next? Bailiffs go in? Nope, didn't think so.

https://www.warringtonguardian.co.uk/news/24391312...

Where have you been? This is nothing new...plenty of other councils in the same situation eg Croydon, Woking etc. They all seem to have been investing their funds in dubious developments: Croydon even bought a hotel, now closed down.

R.

So what happens next then?

As somebody in Croydon your council tax bill goes to nearly £4k a year and public services get cut even more

[Tenacious]

kiethton said:

As somebody in Croydon your council tax bill goes to nearly £4k a year and public services get cut even more

Shocking behaviour.

[EastStand]

Sounds like amateurs playing the markets with council tax payers money.

I look forward to those responsible being held to account……….I won’t be holding my breath though!!

[hidetheelephants]

The Leaper said:

Tenacious said:

1.85B in the red. For one council. Seems like they've been spending the cash like no tomorrow.

So what happens next? Bailiffs go in? Nope, didn't think so.

https://www.warringtonguardian.co.uk/news/24391312...

Where have you been? This is nothing new...plenty of other councils in the same situation eg Croydon, Woking etc. They all seem to have been investing their funds in dubious developments: Croydon even bought a hotel, now closed down.

R.

At least that's a tangible asset, these goobers got themselves their taxpayers rinsed for nothing at all by this grinning beardface.

[The Leaper]

Tenacious said:

The Leaper said:

Tenacious said:

1.85B in the red. For one council. Seems like they've been spending the cash like no tomorrow.

So what happens next? Bailiffs go in? Nope, didn't think so.

https://www.warringtonguardian.co.uk/news/24391312...

Where have you been? This is nothing new...plenty of other councils in the same situation eg Croydon, Woking etc. They all seem to have been investing their funds in dubious developments: Croydon even bought a hotel, now closed down.

R.

So what happens next then?

The council is allowed to increase the rate of local tax by more than the legal limit, which I think is 4.99%, so in the case of Croydon I think it went up by 15%. Services are cut to the bone too, of course. Financial management is supervised by the government, and a plan put together to get finances back to where they should be. That's roughly what happens as I understand things.

R.

[asfault]

Councils should not be investing in anything. Their job is to spend the funds they have wisely and appropriately.

[brownspeed]

In most occupations- blowing funds in a manner like this would be a sackable offence. As a resident of Warrington borough ;I want those responsible held accountable and at the very least; in the stocks so we can throw rotten veg or housebricks at them.
I expected a large portion of the losses were due to installing the worlds largest speed bumps in the area, not this farce.
Surely if they had surplus funds to invest- they had too much money

[The Leaper]

asfault said:

Councils should not be investing in anything. Their job is to spend the funds they have wisely and appropriately.

Of course, that is correct. However, as with any business, councils do accumulate excess funds at times, usually known as reserves, and these need to be invested. The issue is: how wisely are these reserves are invested? In recent years there's been evidence that some elected councilors with no financial background have been able to persuade their committees to invest reserves in pet/vanity projects usually speculatively, and this has gone horribly wrong. Croydon's Brick by Brick project is typical of these situations, and recovery plans are always at the cost of the local tax payer, unfortunately.

R.

[JQ]

The Leaper said:

asfault said:

Councils should not be investing in anything. Their job is to spend the funds they have wisely and appropriately.

Of course, that is correct. However, as with any business, councils do accumulate excess funds at times, usually known as reserves, and these need to be invested. The issue is: how wisely are these reserves are invested? In recent years there's been evidence that some elected councilors with no financial background have been able to persuade their committees to invest reserves in pet/vanity projects usually speculatively, and this has gone horribly wrong. Croydon's Brick by Brick project is typical of these situations, and recovery plans are always at the cost of the local tax payer, unfortunately.

R.

I may be wrong, but that's not my understanding of the situation. Councils are able to borrow money from the gov at a discount. The councils then invest in property with greater returns than the cost of the debt. That provides a profit which can be invested in council services, making up the shortfall of cuts to council budgets. That's why some tiny councils have invested £billions.

The wheels come off when the councils invest poorly. Some councils have invested poorly, others have invested wisely and will reap the rewards. One of my clients is currently buying a property off a council. Said council will have seen a £13m return on their investment on their 5 year hold period for a single property.

A council holding £2billion of debt is not an issue if that has been invested in property currently worth £2.5billion that's producing an income of £130million per annum. However, if the properties are now worth £1.5 billion, then there's an issue, so without knowing the current value of the assets or the returns being produced it's difficult to comment.

Ultimately, with the Gov lending £billions and £billions to councils there should have been greater independent oversight into where the monies were being invested. Lending money to buy a property let to Amazon for 25 years with annual RPI rental uplifts should be relatively safe, lending money to a local entrepreneur to build a PV farm with no financial guarantees should be an absolute non-starter. I believe councils have done both with our money.

[asfault]

JQ said:

The Leaper said:

asfault said:

Councils should not be investing in anything. Their job is to spend the funds they have wisely and appropriately.

Of course, that is correct. However, as with any business, councils do accumulate excess funds at times, usually known as reserves, and these need to be invested. The issue is: how wisely are these reserves are invested? In recent years there's been evidence that some elected councilors with no financial background have been able to persuade their committees to invest reserves in pet/vanity projects usually speculatively, and this has gone horribly wrong. Croydon's Brick by Brick project is typical of these situations, and recovery plans are always at the cost of the local tax payer, unfortunately.

R.

I may be wrong, but that's not my understanding of the situation. Councils are able to borrow money from the gov at a discount. The councils then invest in property with greater returns than the cost of the debt. That provides a profit which can be invested in council services, making up the shortfall of cuts to council budgets. That's why some tiny councils have invested £billions.

The wheels come off when the councils invest poorly. Some councils have invested poorly, others have invested wisely and will reap the rewards. One of my clients is currently buying a property off a council. Said council will have seen a £13m return on their investment on their 5 year hold period for a single property.

A council holding £2billion of debt is not an issue if that has been invested in property currently worth £2.5billion that's producing an income of £130million per annum. However, if the properties are now worth £1.5 billion, then there's an issue, so without knowing the current value of the assets or the returns being produced it's difficult to comment.

Ultimately, with the Gov lending £billions and £billions to councils there should have been greater independent oversight into where the monies were being invested. Lending money to buy a property let to Amazon for 25 years with annual RPI rental uplifts should be relatively safe, lending money to a local entrepreneur to build a PV farm with no financial guarantees should be an absolute non-starter. I believe councils have done both with our money.

Councils job imo is to spend the money they are given. Every single penny but as effeciently as they can on lots of things that you dont see a direct monitary return on ie litter picking, bin collection etc. not how can we make more money to do the above.
Yes they will at times have funds set aside for the rest of the year etc but that should only be in the safest of investments not properties, or hotels or failing shopping malls.

[BoRED S2upid]

JQ said:

The Leaper said:

asfault said:

Councils should not be investing in anything. Their job is to spend the funds they have wisely and appropriately.

Of course, that is correct. However, as with any business, councils do accumulate excess funds at times, usually known as reserves, and these need to be invested. The issue is: how wisely are these reserves are invested? In recent years there's been evidence that some elected councilors with no financial background have been able to persuade their committees to invest reserves in pet/vanity projects usually speculatively, and this has gone horribly wrong. Croydon's Brick by Brick project is typical of these situations, and recovery plans are always at the cost of the local tax payer, unfortunately.

R.

I may be wrong, but that's not my understanding of the situation. Councils are able to borrow money from the gov at a discount. The councils then invest in property with greater returns than the cost of the debt. That provides a profit which can be invested in council services, making up the shortfall of cuts to council budgets. That's why some tiny councils have invested £billions.

The wheels come off when the councils invest poorly. Some councils have invested poorly, others have invested wisely and will reap the rewards. One of my clients is currently buying a property off a council. Said council will have seen a £13m return on their investment on their 5 year hold period for a single property.

A council holding £2billion of debt is not an issue if that has been invested in property currently worth £2.5billion that's producing an income of £130million per annum. However, if the properties are now worth £1.5 billion, then there's an issue, so without knowing the current value of the assets or the returns being produced it's difficult to comment.

Ultimately, with the Gov lending £billions and £billions to councils there should have been greater independent oversight into where the monies were being invested. Lending money to buy a property let to Amazon for 25 years with annual RPI rental uplifts should be relatively safe, lending money to a local entrepreneur to build a PV farm with no financial guarantees should be an absolute non-starter. I believe councils have done both with our money.

That shouldn’t be allowed. They are not investment gurus, they are not businesses. Spend what you have and not a penny more.