An external assurance review of the governance and financial situation of the council called for the sale of Wallasey and Birkenhead town halls, as well as offices off Pilgrim Street – proposals that had been rejected by council officials before despite a strong business case in favour of the disposals.
Wirral underwent the review as part of its request for a £10.7m loan from the government during the pandemic.
The report noted that the council was at risk of bankruptcy and had been aware of the dire situation after an audit report in December 2020. The report said that the council had failed to act appropriately since.
“Given the explicit comments made by the external auditor, it is of significant concern that Members still rejected eight potential savings proposals of some £2.2m and have subsequently sought to review further agreed savings proposals to increase car parking charge,” the report stated. “This creates the impression that strong messages concerning the extent of the financial challenge are yet to gain traction with members of the council to the point where finance is at the heart of their decision making.”
A letter addressed to Wirral Council leader Cllr Janette Williamson from minister of state for equalities and levelling up communities MP Kemi Badenoch, echoed the report’s words. Badenoch wrote that she was “concerned that you have not fully acknowledged or perhaps even understood the severity of challenge that your council faces.
“The review has set out both financial and cultural challenges that need to be addressed at both member and officer level,” Badenoch continued. “I trust that the findings will help you to focus your council on activity that will lead to sustainable change.”
That includes a need to generate more funds for the council, which could be gained by disposing of several assets. The sale of the town halls and Pilgrim Street, the reported noted, would “generate a significant capital receipt, reduce revenue spend by £685K, and avoid capital maintenance spend of £14.03m over a 10-year period”.
The report also said that the council should consider selling golf courses and libraries to help it avoid bankruptcy.
The review also noted that the council did not have an up-to-date asset management plan, which means there is a potential risk of inadequate maintenance on several properties.
As part of the solution to the problems, the review called for the development of a financial recovery plan for three years.
The review also covered the governance of the council, with recommendations including changing up the electoral cycle to one where all councillors were elected at the same time every four years.
“The electoral cycle and the particularly volatile politics of some council seats in Wirral is a barrier to continued improvement”, the report stated. “While members interviewed have expressed total support for the model, the advantages of securing a four-year window to undertake the sort of radical remodelling of services and finances needed should be reconsidered”.
The review also recommended that Wirral ensure that all reports from the director of resources include explicit financial implications and to commission an LGA Peer Review of its regeneration plans.
Regarding the report, Wirral Council chief executive Paul Satoor said: “Wirral Council welcomes the indication from [the Department of Levelling Up, Housing and Communities] that the request for exceptional financial support is progressing. As part of the request for this additional support from government, independent assurance reviews have been undertaken. We will take time to fully digest the findings and recommendations made in these reviews. We are grateful to DLUHC for their ongoing commitment to supporting the council through this process.”
Ada Burns, former chief executive of Darlington Borough Council, was the lead on the governance side of the government’s review of Wirral, while the Chartered Institute of Public Finance and Accountancy handled the financial aspects.