Warrington Borough Council credit rating withdrawn amid near-£2bn debts
Moody’s withdraw its credit rating after failings by the local authority to provide audited sets of accounts for recent financial years.
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Your support makes all the difference.Influential ratings agency Moody’s has pulled its credit rating of Warrington’s heavily indebted council.
Warrington Borough Council told bondholders on Monday that Moody’s withdrew its rating due to “the inability of the council to procure that its statements of accounts are audited by external auditors”.
The Labour-led council has a debt of £1.85 billion and has come under scrutiny for a number of investments.
Last month, the Financial Times reported that the local authority in Cheshire had refused to hand key information to its auditor, Grant Thornton, restricting its ability to review its books.
The Government appointed an inspector in May to investigate whether the council is complying with legal requirements after a review last year criticised its “very large and uniquely complex” set of debt-fuelled investments.
Auditors have only recently finished reviewing Warrington’s accounts for the year ending March 31 2019, meaning it is reporting years behind legal requirements.
The council said it has been unable to complete recent audits “due to challenges which apply across the local government sector as a whole in securing auditors of sufficient capacity and capability”.
It added on Monday that it is seeking to secure 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.
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.