Unitary council loses credit rating over delays in signing off of accounts
Credit rating agency Moody's has removed its rating for Warrington Borough Council, which is saddled with almost £2bn in debt, due to an audit backlog in the authority's accounts.
The decision was driven by a backlog of five unaudited accounts for Warrington, including that of the 2024 financial year, the financial services company said.
"The limited prospects towards a timely resolution of the audit backlog in England means that Moody's considers it does not have sufficient information to maintain the ratings," Moody's added.
Moody's had previously put Warrington's rating under review in March of this year.
A Warrington Borough Council spokesperson said that the council was “one of only a small number of councils with a credit rating”.
The statement added: “Like other councils across the country, we have been impacted by the national issue of delays in the signing off of council accounts.”
The news comes a month on from the Department for Levelling Up, Housing and Communities's decision to launch a best value inspection at the local authority to investigate the circumstances behind the council's near- £2bn debt.
In a letter explaining the decision, Max Soule, DLUHC's Deputy Director for Local Government Stewardship, said the inspection came partly in response to Warrington's debt, which, as of March 2023, was at £1.8bn.
He also cited concerns raised in a July 2023 CIPFA capital review, which found that the authority's portfolio of debt-funded investments was "very large and uniquely complex".
Warrington is among a number of local authorities with a backlog of audited accounts.
In a consultation on the local government audit backlog in February, the Government cited figures that showed the number of outstanding opinions peaked in September 2023 at 918.
The consultation noted that in December 2023, the backlog of outstanding audit opinions stood at 771.
The LGA has since described the local government audit system as being "in crisis".
Adam Carey
