UK government seizes control of Liverpool council functions

The UK government is seizing control of some functions of Liverpool city council to end what a cabinet minister dubbed the “pervasive and rotten culture” in the local authority.

Robert Jenrick, the communities secretary, said commissioners would spend three years in the Labour-run city where they would take responsibility for highways, property management and regeneration.

The move came after the publication of an independent report by Max Caller, a professional council inspector, into whether taxpayers were getting “best value” from those running the borough.

That report contained a “deeply concerning picture of mismanagement, a breakdown of scrutiny and accountability . . . putting spending of public funds at risk and undermining the city’s economic development,” Jenrick told the House of Commons on Wednesday. There had been a “serious breakdown in governance,” he added.

Jenrick launched his review after Joe Anderson, Liverpool’s mayor, was arrested in December on suspicion of bribery and witness intimidation. Among the four other people arrested in connection with the case was Derek Hatton, the hard-left deputy leader of the council in the 1980s. 

Both men deny wrongdoing and have not been charged. Anderson has stood down as mayor, triggering an election for the post this May. 

Liverpool city council has been found severely wanting. We will take action against anyone in our ranks involved in wrongdoing of any kind

The Caller report found multiple failings by the council in complying with its “best value duty”, a failure of proper planning process, a lack of oversight.

There had been the “awarding of dubious contracts” with taxpayers frequently losing out and the dumping of documents in skips, Jenrick said. When land was sold the council’s “best interests were not on the agenda,” the communities secretary added.

Jenrick said the criticism did not apply to all staff at the council and singled out chief executive Tony Reeves as having played a valuable role. But he said the pervasive culture seemed to be “rule avoidance” and an atmosphere of intimidation.

Liverpool city council has been under Labour control since 2010 and the party has 72 of its 90 councillors.

Sir Keir Starmer, the Labour leader, has accepted the findings of the report in full — a move that has angered many hard left party members.

Steve Reed, shadow communities secretary, said Labour did not dispute the report’s “grave and serious concerns about decision-making” in the city.

“Liverpool city council has been found severely wanting,” he said. “We will take action against anyone in our ranks involved in wrongdoing of any kind.”

Reed insisted that the commissioners did not represent a “Tory takeover” in Liverpool, saying: “It’s about the government appointing independent people of the highest professional standing to help the council improve as quickly as possible.”

Jenrick said he was proposing to direct the transfer of all executive functions associated with regeneration, highways and property management to the commissioners “should the council not satisfy the commissioners in their improvement processes”, he said.

“I hope it won’t be necessary for the commissioners to use these powers, but they must be — in my view — empowered to do so to deliver the reforms that are required.”

The imposition of commissioners has only happened three times in the last quarter-century: Tower Hamlets in 2014, Rotherham in 2015 and Northampton in 2018. 

The city’s accounts have not been signed off by auditors for the past five years given the continuing policy inquiry. 

Jenrick said the council would be given powers to hold whole-council elections from 2023 — with every councillor up for re-election. 

In a statement, the council said it took the Caller report “extremely seriously” and said it was determined to continue its “journey of improvement”. “A detailed improvement plan is being drawn up and will be implemented in full,” it said.