The unprecedented move comes after inspectors found indications of a ‘serious breakdown of governance’ on behalf of Liverpool city council said the communities secretary. Robert Jenrick also said that an emergency inspection revealed a “deeply concerning picture of mismanagement”, an “environment of intimidation” and a “dysfunctional culture” at one of the biggest councils in mainland Britain.
Commissioners who have been appointed by the Ministry of Housing, Communities and Local Government will be sent to “exercise certain and limited” functions of Liverpool city council for up to three years under a plan that is already proving controversial at just six weeks before the planned local elections.
It is believed to be the first time Westminster has directly intervened in the day-to-day running of a city the size of Liverpool and is politically sensitive due to the fact that it is one of the staunchest Labour cities in Britain. The region provides 14 Labour MPs to Westminster. Liverpool last had a Conservative MP on the seat 38 years ago. The last Tory councillor lost his seat 23 years ago.
This decision by Jenrick follows a damning report on parts of the council by Max Caller, a local government consultant who was in charge of carrying out an emergency inspection on behalf of the government. The report was ordered after the arrest of five men, including the Labour mayor, Joe Anderson, last December 2020. Anderson was charged as part of Merseyside police’s “Operation Aloft”, an ongoing investigation into building and development contracts in Liverpool that led to the eventual arrest of 12 people.
The investigation has identified multiple failures in its regeneration and planning department, including the “awarding of dubious contracts” and a “worrying lack of record-keeping” in which some documents were dumped in skips and others created retrospectively.
In summary, he stated: “As a whole, the report is unequivocal: Liverpool city council has failed in numerous respects to comply with its best value duties. It concludes that the council consistently failed to meet its statutory and managerial responsibilities and that the pervasive culture appeared to be rule avoidance.” He also added “continued failure to correctly value land and assets, meaning taxpayers frequently lost out. When selling land, the report states that Liverpool city council’s best interests were not on the agenda,” he said.
The inspectors unveiled an environment of intimidation in which “the only way to survive was to do what was requested without asking too many questions”, he told MPs.
Liverpool city council is expected to accept Jenrick’s proposals in full, meaning government commissioners would be drafted in with immediate effect. The number of councillors in Liverpool will also be reduced from a total of 90, 72 of whom are representatives of the Labour party. There are also plans to change the election cycle, moving to a system of whole-council elections every four years.
Jenrick said the local elections would go ahead on 6 May and that those politicians would then inform government about the best steps forward for the council with a view to “not to tell them what to do but to guide and support them”.
He also added: “We have given them the authority to act, should they need to, given the seriousness of some of the allegations but it is not our hope or expectation that those powers would be exercised.”
Kim Johnson, who is the Labour MP for Liverpool Riverside, said Liverpool deserved a well-run council with “stronger, more transparent governance procedures”. She added: “I’m a very proud scouser but listening to the secretary of state read the contents of the very damning report makes me angry, as it will the whole city when the report is made public.”
There was immediate pressure on some Labour councillors to resign. Richard Kemp, the Liberal Democrat councillor and potential candidate for mayor, called for the resignation of all councillors connected to its scandal-hit regeneration, planning and property departments. “This is a sad day for our city, which the people of Liverpool do not deserve.”
Liverpool’s acting mayor, Wendy Simon, and its chief executive, Tony Reeves, who joined the council in 2018 and is praised in the Caller report, 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.”
Similar occurrences, where commissioners were sent in to take over the running of councils happened in Northampton in 2018, Rotherham in 2015 and Tower Hamlets in 2014 although none of them are on the scale of Liverpool, with a population of half a million people.
In the Caller report, more than 65 property transactions at the council were examined and one of the conclusions is that “corporate blindness” had failed to pick up on serious failings in governance. The council’s regeneration department was described as having a “bullying culture”, where officers were visited at their desk and told to follow instructions – apparently on behalf of the mayor – and that “people who did not comply did not last”.
The report added that many senior councillors blatantly flouted the code of conduct by not declaring gifts or hospitality on a register of interests. It also noted that these registers were only updated as from December, when the inspection was announced. The council’s ethics and standards committee last had a meeting back in January 2012.
Anderson, the Labour mayor said that Liverpool had been transformed under his leadership into a “northern powerhouse”. He reiterated that he continues to cooperate with the police investigation and denies the offences he is facing: “Today’s headlines do not reflect the dramatic success that we have generated over the last 11 years. With success brings jealousy and I want to digest fully today’s report before commenting on specific details.”
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