Property developers have been routinely put off building in the city after conversations with the council caused them to doubt decisions would be made fairly and objectively, said the author of a damning report into the authority’s operations.
“Developers believed there was little point in bidding for sites because the [procurement] process led by Liverpool City Council would not be fair,” Max Caller, a strategic advisor to the Government, told Place North West in an exclusive interview.
“In conducting our report, we took evidence from a number of developers who said to us, you know what, we’ve got ideas and we’ve got money and we really think we can do some great things in Liverpool, but we decided not to work there because we found we couldn’t get a fair hearing [on our proposals] and that decisions appeared to be sewn up.
“The developers told us this happens too often for coincidence,” Caller said.
Caller’s report, published on Wednesday, was commissioned by the Ministry of Housing, Communities & Local Government towards the end of last year following a string of high-profile arrests of senior public officials connected to Liverpool City Council, including former mayor Joe Anderson, his son David and the council’s ex-head of regeneration Nick Kavanagh.
The arrests were made as part of Merseyside Police’s Operation Aloft probe into suspected corruption in the award of building contracts across the city. All 11 people arrested to date have been released without charge and deny any wrongdoing.
Announcing publication of Caller’s report, communities secretary Robert Jenrick highlighted evidence it raises that Liverpool City Council had awarded “dubious contracts” and that there had been a “continued failure to correctly value land”.
The report paints a “deeply concerning picture of mismanagement” and a “dysfunctional, rotten culture” within the authority, Jenrick told the House of Commons. “The report is unequivocal. The council has failed in numerous respects to comply with its [statutory] Best Value duty to taxpayers.”
‘Some people do not deserve to be in public office’ – Caller
In response, Jenrick is sending Whitehall-appointed commissioners to oversee various aspects of Liverpool City Council’s operations, including its regeneration, highways and property departments, for the next three years. Liverpool City Council, meanwhile, has pledged to address the concerns raised in the report and produce an ‘improvement plan’ as soon as the May local government elections have been held.
The report notes that the council has already taken steps to resolve some of the issues since the arrival of chief executive Tony Reeves in 2018.
Caller conducted his investigation with the help of experts on local government, property and law including solicitor Viv Geary and ex-Kier director Mervyn Greer, now the Cabinet Office’s representative for the construction industry.
Speaking to Place North West, Caller said: “Jenrick has summarised our key points succinctly, but what I can say in addition is that there are a lot of good council officers [in Liverpool], and there are some who don’t deserve to be in public office, or in public life, and need to be removed.
“Ultimately, the outcome of this report should be to aid the creation of a place where people with good ideas and funding can come in, deliver good quality developments and create jobs and opportunities for the benefit of citizens.”
He noted that because of the ongoing police investigation, the report was written in a way that sought to avoid prejudicing the fair trial of any individuals involved and therefore it has not named anybody mentioned.
But he said the report includes several findings that point to management failings within the departments responsible for property and place making. In the regeneration directorate, for example, “corporate management and oversight was sketchy…little instruction or direction was committed to writing…and [there were] significant differences in record keeping in different parts of the directorate”, the report said.
Meanwhile, “on the property side, there was no coherent property-based filing system, nor even a project-based case file”, the report added.
However, Caller said he believed the planning department, which sits within the regeneration directorate, “will be OK from now on as it is under new management. It is working towards the preparation of the Liverpool Local Plan and I’m confident it can operate successfully even without the intervention.”
Highways is the directorate that “needs the most work, as there is no leadership currently”, he said. The report highlights failings in the award and management of an outsourced highways contract to public services supplier Amey. The directorate was “reluctant to make use of the professional expertise of the central procurement team, compliance…was poor, [and] records show a high level of exception reports (in essence, a breach of the rules remedied by a retrospective approval)”, according to the report.
Said Caller: “Reeves has got to promote his reorganisation of the council – that is one of the first things he’s been asked to do, and then people will look at what improvements come next.”
‘Local government is bureaucratic, because it involves public money’
It is rare for the Government to send in officials to take over the running of a local authority – though not unheard of. In 2014, then-communities secretary Eric Pickles ordered a team to go in and manage the finances and management of the London Borough of Tower Hamlets for a two-year period following allegations of mismanagement of public money and a culture of divisive community politics.
Similar Whitehall intervention measures have been either put in place or threatened at the London Borough of Barnet and Northampton Council in recent years, amid concern over local finances and leadership.
When asked how the situation at Liverpool City Council compares to such instances, Caller told Place North West: “They are all different in terms of causation, but they are all the same. Essentially, they are all about a culture that is not right, and checks and balances being subverted.
“Local government is a bureaucratic structure, but it has to be, because it involves public money. When you break the rules, you run the risk of disaster, and here we are.”
Liverpool City Council declined to comment further beyond its official response to Jenrick’s announcement, in which it said it takes the findings of the report “extremely seriously…The council has pledged to address all of the concerns raised and continue its journey of improvement.”
Caller’s report concluded: “The road to recovery will be hard, as it is inevitable that more bad things will emerge through the process.
“The outcome will be a council with transparent decision-taking that can legitimately withstand challenge and can be proud of what it delivers.”