The levelling up secretary has announced that he is “minded to” expand intervention at Liverpool City Council by transferring the authority’s financial management, governance and recruitment powers to commissioners.
Greg Clark’s response comes as a second report by commissioners, published on 19 August, revealed serious shortcomings in the authority’s financial management and senior leadership.
Four commissioners were sent into Liverpool City Council in June 2021 to oversee the council’s highways, property and regeneration functions.
In a letter to commissioners, Clark said: “I am greatly concerned to learn you have found further evidence of best value failure at Liverpool City Council. You have been clear about the depth of this systemic and whole-council failure and that immediate action is required.”
He added: “Overall, I agree with your assessment that the council continues to fail in its best value duty and, therefore, I am minded to expand the intervention.”
‘Stark’ financial situation
The commissioners’ report labelled the authority’s financial situation as “stark”, with the cumulative budget gap over the next four years estimated to be £98.2m.
It criticised the council’s lack of pace and urgency in acting on the recommendations set out by CIPFA in a report in October 2021. In addition, it said that the resignation of the authority’s S151 officer Mel Creighton added a “further barrier” to the council’s financial challenges.
“The absence of the director of finance and resources is a major risk in terms of capacity, leadership and control,” the report added.
You have been clear about the depth of this systemic and whole-council failure and that immediate action is required.
Leadership capability
The commissioners also highlighted that the managerial leadership of the council had “not displayed sufficient pace, urgency, or grip” to tackle the issues identified in the Best Value Inspection and Commissioners’ report by Max Caller in April 2021.
The report specifically criticised the authority’s weak decision-making on procurement, by highlighting the council’s failure to renew some of its energy supply contracts, which cost the authority millions of pounds.
Clark said: “I am minded to appoint a commissioner to oversee the financial functions of the council, for you to be given executive powers on recruitment and for functions associated with governance and financial decision making to be transferred to you.”
The absence of the director of finance and resources is a major risk in terms of capacity, leadership and control.
New advisory panel
The secretary of state also proposed the creation of the Liverpool Strategic Futures Advisory Panel, which will work closely with City Mayor Joanne Anderson, and her cabinet, and will develop a long-term strategy, beyond the current temporary intervention.
The new panel will be chaired by Steve Rotheram, metro mayor of Liverpool City Region. He will be joined by Sir Howard Bernstein, chief executive of the City of Manchester from 1999 to 2017, and Baroness Judith Blake, leader of Leeds City Council from 2015 to 2021.
Clark said: “Following talks I had in person in Liverpool with mayor Joanne Anderson and mayor Steve Rotheram in recent weeks, I am appointing a new panel, chaired by that same mayor Rotheram and supported by some of the wisest, and most experienced people in city leadership, to lead this transition from current interventions to a successful future.”
Liverpool’s response
In response to the proposed further intervention, Anderson said: “Naturally, I am extremely disappointed with today’s report. A huge amount of work has been taking place over the last 12 months to change the systems, processes and culture of the organisation.
“This report dates from June, and since then there has been further progress, particularly around the management of, and commissioning of, contracts.
She welcomed the establishment of the Liverpool Strategic Futures Panel, with Rotheram’s chairmanship “ensuring that Liverpool’s future remains in Liverpool’s hands”.
“I do feel hopeful. The commissioners’ report was written nearly three months ago, and we have already seen improvements in many areas since then, as well as appointing a new interim chief executive who has an impressive track record of delivery.”
Liverpool City Council and other interested parties will have until 2 September to provide representations on the proposed intervention measures.
I am minded to appoint a commissioner to oversee the financial functions of the council, for you to be given executive powers on recruitment and for functions associated with governance and financial decision making to be transferred to you.
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