Warrington faces legal challenge over £30m bank investment
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Warrington Borough Council faces a formal challenge questioning the legality of the authority’s investment in a bank.
The authority last year made a £30m investment in Redwood Bank to help local businesses and generate income.
However, it has emerged that auditors have been unable to sign off the council’s accounts due to a formal objection to the investment.
Council documents said: “During the period in which the council’s accounts were open to public inspection, Grant Thornton received an objection from a member of the public regarding the investment of Redwood Bank.”
According to officers, the audit firm is obliged to reply to the challenge, after which the objector has time to respond.
The council said Grant Thornton cannot sign off the council’s accounts for 2017–18 until the process is complete.
It is understood that the challenge relates to the timing of a change to the company’s articles of association.
Campaigner Richard Buttrey claims that the change could put the authority at financial risk.
A statement from Redwood Bank said the change in articles went through the appropriate process.
“Even though the council were not shareholders at the time, the articles were validly adopted. The council was fully aware of the proposed changes.
“The relationship and agreement with our shareholders has not changed and we remain committed to demonstrating a sustainable return on investment for all of our shareholders.”
A statement from the council said objections to council accounts were not rare.
“The council’s independent external auditors have received an objection to the accounts from an individual,” the statement said.
“The council has no control over the timescales in which this process can be concluded.
“Objections to local authority accounts are not uncommon and enable a layer of public scrutiny.
“This process means, however, that a guaranteed date for the accounts to be signed off can’t be given.”
Writing in Room151 last year, Danny Mather, corporate manager at Warrington, said the council’s investment in the bank “has anticipated emerging government and opposition party policy, as well as growing recognition of the vital need to re-establish local banking which understands and responds to local needs, and is accountable locally”.
