CONSERVATIVES in Wokingham have defended claims made in their election leaflets over the council’s debt levels after the Liberal Democrats called for them to be withdrawn, saying they are misleading.
For several months, the opposition party has said the council’s debt level is closer to £750 million, something the Conservatives vehemently disagree with.
In election leaflets for the Tory candidates in Emmbrook and Evendons, the party says: “Ernst & Young’s independent audit states WBC’s debt is £83 million with £1.4 billion in assets”.
A similar claim has been made in graphs posted on social media by the Conservatives.
Wokingham’s Liberal Democrats say that this is not the case and accounting firm Ernst & Young (EY) had not audited the council’s treasury management report and the company had not been aware that its name was being used in election literature.
Wokingham.Today has contacted EY for a response, but understands that the company has had not been asked to endorse the Conservative’s statement, and were unaware of it.
The party’s deputy leader – and candidate in Hawkedon ward – Clive Jones said: “It’s not audited by Ernst & Young; it is a false claim invoking one of the country’s leading auditors. It’s unacceptable.
“The claim must be withdrawn.”
Wokingham Borough Council has confirmed with the Liberal Democrats that the company had not audited the treasury management report, but instead the 2019/20 external audit. This was presented to the audit committee in March.
The Liberal Democrats say that in the year 2023/24, the council’s projected external borrowing level will be £580 million and £166 million from internal borrowing – a total of £746 million or £750 million when rounded up.
Their figures come from the Treasury Management Strategy 2021-2024 report, which was presented to a council meeting held on February 18 this year and can be read here (PDF document). The figures the Lib Dems refer to are on pages 98 and 104.
The party argues that the Conservatives “do not take into account the future borrowing to fund their capital spending programme over the next three years, and they also deduct their cash investments from the borrowing”.
However, Cllr John Kaiser, the Executive Member for Finance on Wokingham Borough Council and Conservative councillor for Barkham, said that the party’s claim was not new.
“We’ve been over this many times – the Council’s politically-impartial Chief Financial Officer in his public report in November last year declared that the Council’s net debt is £83million, that it has usable reserves of £130million, and that it owns £1billion in assets,” he said.
“Every year, Ernst & Young have audited and signed-off the Council’s accounts and are due to audit them again this year.
“Are the Liberal Democrats calling the Council’s chief financial officer (CFO) a liar?”
Mr Jones said: “It is a really serious issue about credibility. The Conservatives are claiming that our claim is not credible, and yet our claim can be substantiated.”
And the party has contacted the Conservatives’ election agents to demand retractions.
It is prepared to take it further, adding: “The Conservatives are besmirching the name of EY. Why they make these wild claims I don’t know.
“Who do you trust? The Conservatives? I don’t think so.”
Cllr Imogen Shepherd-Dubey, the Lib Dems’ finance lead and not up for election this year, said: “I sit on the WBC Audit Committee and I know that the Auditors are only just finishing off the 2019-2020 Audit.
“The Auditors don’t audit the forward-thinking Treasury Management reports, so how can they have endorsed these Conservative claims?
“We asked the auditors and sent a copy of the Conservative leaflet.
“My deputy, Cllr Maria Gee, used to be an Auditor and Auditors have their own code of conduct and it would not be appropriate for them to endorse the claims of one political party over another, but it is very clear that they don’t audit any information relating to the Council’s predicted debt.
“Unsurprisingly, the auditors have firmly denied having anything to do with the Conservative claim and have made very clear that they would have refused to have their name used for political purposes. They have also not audited anything that would validate the Conservative claims about the level of debt.”
She added: “The £750 million of borrowing that we are quoting is very clearly in the Treasury Management report as the total borrowing expected for the year 2023/24.
“It includes Internal borrowing, where the council borrows money fro m its own departments and borrowing that is just used for investment purposes.
“It is very clear, that the Conservatives are not including these items in their calculations, even though it all still has to be paid back eventually.
“However, the fact that the Conservatives are making these claims and clearly don’t know what the WBC Auditors are actually doing for us, shows how little they understand about managing their own Council finances.”
This debt level has been disputed by the Conservatives for several months.
At the budget council meeting in February, council leader John Halsall – the Conservative candidate for Remenham, Ruscombe and Wargrave in next week’s election – told the chamber: “Our borrowings far from already being at £700 million and running away from us as the opposition states, is budgeted to be just under £400 million at the end of next year.
“In reality, it is likely to be nearer £300 million given the necessary level of slippage on the capital programme into future years.
“Our net borrowings, after taking into account of our cash balances, will be somewhere between £200 million and £265 million. It surely must give us great confidence that backing this debt, we have total asset value rising to £1.4 billion.
“What an incredibly strong position to be in.”
And Cllr Kaiser, who is not up for election, told Wokingham.Today that the onus was on the Liberal Democrats to prove that the council’s financial officer (CFO) had misled councillors when the financial documents were presented to them.
“If the Liberal Democrats have any evidence that the CFO has misled the Council, they should produce it – otherwise I suggest they withdraw their scurrilous accusations,” Cllr Kaiser said.
“Meanwhile, the Conservatives are getting on with the job of continuing our successful financial management of the Council, and focusing on rebuilding our communities for a post-pandemic world.”
And Labour also disputes the Lib Dems’ figures.
A tweet from their group leader, Andy Croy, accuses the party of “unbelievable levels of financial illiteracy”.
Also standing in Bulmershe and Whitegates ward: Sheila Jordan (Lib Dem); Samuel Langlois (Green Party); Fiona Morley (Freedom Alliance); Shahid Younis (Conservative).
Also standing in Hawkedon ward: Mark Craske (Labour) and Eileen Kessel (Conservative).
Also standing in Remenham, Wargrave and Ruscombe Ward are Martijn Andrea (Lib Dem) and Stuart Crainer (Labour).
Standing in Evendons ward are: Daniel Hinton (Conservatives), Annette Medhurst (Labour), Ian Shenton (Lib Dem) and Louise Timlin (Women’s Equality Party).
Standing in Emmbrook ward are: UllaKarin Clark (Conservative), Morag Malvern (Lib Dem) and Llewelyn Reed-Jones (Labour).