Ministerial envoys are set to be sent into Warrington Council over concerns raised about its commercial programme and debts.
An inspection was ordered by the previous Conservative government after criticism of the authority’s £1.8bn debt, related mostly to its commercial investments.
Local government minister Jim McMahon said the authority was failing to comply with its best value duty in relation to five areas, including leadership, culture and use of resources.
Council leader Hans Mundry described the situation as “a moment of reset” for the authority.
Warrington Council said it welcomed the proposal to appoint envoys.
“This is a supportive decision and will help us to deliver the changes needed,” it said.
McMahon said the report had found strengths in the local authority in areas including children’s services, public sector partnerships and community engagement.
But the report said there was “resistance” in the council’s response to external challenges and that the inspectors were not confident it had the “will and capacity” to make changes without external leadership.
It also found a lack of strategic direction, members being “highly respectful” of powerful officers, and a “defensiveness to internal and external scrutiny”.
The council’s commercial programme, it said, “lacks transparency” and decision-making was “disproportionately influenced by a small group of officers” and the authority managed a complex investment programme “without a clear strategy or the required expertise”.