Warrington Borough Council has announced that the proposed disposal of its roughly £30 million holding in Redwood Bank has collapsed, adding fresh pressure to the authority’s already strained finances.
Sale fails, new offer under due diligence
The authority, which built up borrowing of about £1.8 billion in recent years connected to its investment programme, said the original sale did not complete. Council papers published ahead of a cabinet meeting on 27 July state the council has received a further approach from a third party unconnected to the initial bidder; that bid will be subject to due diligence.
The report warns the council has already incurred "significant costs" in relation to the now-failed sale and that this new offer would bring "new and significant costs". It adds that these costs are "non-recoverable" and will increase the cumulative losses recognised against the investment.
"The costs relating to the sale are 'non-recoverable' and would 'add to the cumulative losses recognised against this investment'."
Local impact and oversight
The Redwood Bank stake forms part of an investment strategy that has contributed to the council carrying substantial debt. That position previously prompted central government to appoint ministerial envoys to work with the authority. The failure to conclude the sale means the council faces additional immediate expenditure in completing due diligence on any new offer and absorbing sunk costs from the failed transaction.
- Stake involved: £30 million
- Associated council borrowing: about £1.8 billion
- Next steps: further offer subject to due diligence; costs likely to be incurred
What the council has said
Council documents make clear that costs already incurred cannot be recovered and that new offers will bring additional expense. No further financial details, identities of bidders or timing for completion of any new sale were provided in the papers released to councillors.
| Item | Figure / status |
|---|---|
| Stake in Redwood Bank | £30 million |
| Council borrowing linked to investments | £1.8 billion |
| Sale status | Original sale collapsed; new offer under due diligence |
Members of the cabinet will consider the position at their upcoming meeting. Until due diligence on the new approach is completed, the council says it cannot provide further detail on the prospective purchaser or the likely financial outcome for the authority.
The collapse of the deal and the prospect of further non-recoverable costs will be closely watched by councillors, residents and the ministerial envoys charged with overseeing the council’s recovery plan.
