Communities minister Robert Jenrick said a Government investigation into the running of the council painted a “deeply concerning picture of mismanagement” and found evidence of a “dysfunctional culture” within the authority.
As a result, Whitehall-appointed commissioners will be sent to support council chief executive Tony Reeves by taking over the management of “certain and limited functions” for the next three years, to improve governance within Liverpool City Council.
“We are embarking on a partnership to mend a politics that has for too long been rooted in a pervasive and rotten culture,” Jenrick said. Liverpool City Council said today was a “difficult” one for the organisation and pledged to publish an improvement plan after the 6 May local government elections.
Jenrick’s announcement came as the Government published a report on procurement practices within Liverpool City Council, produced by strategic advisor Max Caller. The commission followed a string of arrests by Merseyside Police in the past year including that of former Liverpool Mayor Joe Anderson in December and the council’s ex-head of regeneration Nick Kavanagh, who was sacked from the council yesterday following a period of suspension.
Anderson was arrested on 4 December on suspicion of conspiracy to commit bribery and witness intimidation and was later released on bail. He is suspended from the Labour party on unpaid leave and no charges have been brought.
Those and nine other arrests in the past 18 months were made as part of Merseyside Police’s Operation Aloft inquiry into suspected corruption in the award of building contracts and land sales by the city council. The police probe prompted Whitehall to seek to further investigate the council.
Addressing the House of Commons on Wednesday, Jenrick said that Caller’s investigation into the council’s regeneration, property management, highways and planning departments, unearthed multiple failures including a “worrying lack of record-keeping”.
“The pervasive culture appears to be rule avoidance,” Jenrick said.
The secretary of state’s damning speech also highlighted evidence set out in the report that the council had awarded “dubious contracts” and that there had been a “continued failure to correctly value land”.
Council staff, meanwhile, had suffered within an “overall environment of intimidation, one in which the only way to survive was to do what is requested without asking too many questions or applying normal professional standards”.
Indeed, said Jenrick, there was “no regular ethics or standards committee, and no way of holding those falling below [nationally accepted] standards to account”.
He concluded: “The report is unequivocal. Liverpool City Council has failed in numerous respects to comply with its [statutory] Best Value duty to taxpayers.”
As well as transferring certain council functions to external Whitehall commissioners, Jenrick has asked the council to implement an improvement plan addressing issues laid out in Caller’s report.
If the council does not satisfy the Government that it is making the necessary improvements at the necessary speed, the commissioners will take over all executive functions of the regeneration, highways and property management departments.
“I hope it won’t be necessary for the commissioners to use these powers but they must be empowered to do so to deliver the reforms that are required,” Jenrick said.
Jenrick concluded that, if action was not taken, public services would be put at risk and the city’s ability to attract investment from “reputable developers” would be damaged.
“We will do all we can to support the city as it recovers from the pandemic and give confidence to those who want to invest in the city, to contract with the council and do business in Liverpool.
“I am hopeful that this is the start of a new chapter for Liverpool City Council.”
Caller’s report noted that the authority has already taken steps to address some of the issues since the arrival of chief executive Tony Reeves in 2018.
Liverpool City Council on Wednesday pledged to address all of the concerns raised and said its improvement plan would be published after the local elections.
In a joint statement, Acting Mayor of Liverpool Cllr Wendy Simon and council chief executive Tony Reeves, said: “This is a difficult day for our organisation and we take the report findings extremely seriously.
“The inspector’s report has highlighted several failings, but there is a collective commitment from both councillors and officers to learn from these mistakes.
“We would like to reassure all residents and businesses that we will take action to address all of the issues highlighted. We know we need to rebuild your trust.
“It is reassuring that the inspector believes we have made progress in starting to deliver the wholesale changes needed. A detailed improvement plan is being drawn up and will be implemented in full.
“We will be open and transparent about the progress we are making on each of the recommendations. This includes restructuring the organisation to strengthen our governance and ensure our work is aligned with our pandemic recovery pledges and the City Plan.
“At the same time, we will ensure we keep delivering essential services and offering a helping hand to the people of our city.”