It follows a report which found the council is the most indebted unitary authority in the country, with "their portfolio of debt-funded investments... concerning" which put not only the council at risk, but could also have "significant impact" for local residents.Simon Hoare, the Minister for Local Government, announced the 'best value' inspection on 8 May which will see an inspector investigate whether the council can work to control its debt and reduce it over time.
He added: "I have been warning this would happen, the council have borrowed a sum of money, £1.8 billion, and what we've seen over the last few weeks is significant evidence of reckless decisions with organisations going bust, investments into properties which are making losses, and even investments into junk bonds which are causing losses for the council.
"While DLUHC recognises that we have taken steps to address areas for improvement, we will continue to identify any learning and further improvements that can be made as part of this inspection process. He added that the council had invested money because it had been told by the national Conservative government "they should look to find other sources of income generation".
The report concluded that, in the author’s opinion, the council failed to get the necessary permission before it spent the £10 million, and for the next three years it issued misleading reports about the type of its investment, its valuation, and its returns.