Liverpool Council: Government to intervene after inspection revealed 'multiple failures'

The government is set to intervene in the running of Liverpool after a damning inspection report into the Labour-run city council.

Bullying, intimidation, “dubious” deals and “jobs for the boys” were amongst the themes in the report by local government inspector, Max Caller, called in to investigate last December after a series of arrests for fraud, bribery, corruption and witness intimidation.

Joe Anderson, the then elected mayor of Liverpool, was among those held.

The authority, a Labour stronghold, will now have some of its functions taken from councillors and officers for the next three years and instead the Ministry for Housing, Communities and Local Government (MHCLG) will appoint commissioners, part of an “improvement plan”.

One of the key stipulations is the council will be unable to spend cash on any property transactions without the formal consent of the commissioners.

Tories to take over key services at Liverpool council after damning inspection report

Robert Jenrick, Secretary of State for the MHCLG, said “many millions of pounds have been wasted” as the report was published.

Announcing commissioners were to be sent in, he told the House of Commons: “It paints a deeply concerning picture of mismanagement, the breakdown of scrutiny and accountability.

“A dysfunctional culture, putting the spending of public funds at risk and undermining the city’s economic development.”

Inspector highlighted key failings:

  • Failure of due process across planning and regeneration

  • A "worrying lack of record keeping". 

  • Documents created retrospectively, discarded in skips.

  • Evidence of "awarding of dubious contracts"

  • A lack of scrutiny and oversight across highways

  • Dysfunctional management practices & no coherent business plan

  • A failure of proper process relating to property management - and failure to value land and assets

  • An overall environment of intimidation

Mr Anderson, who was held on suspicion of conspiracy to commit bribery and witness intimidation, has denied any wrongdoing and has not been charged with anything.

The former mayor, who stepped back from his role following his arrest last December, said the city had “been transformed” under his leadership over the last 11 years.

He said: “Even against swingeing Tory cuts, we have protected frontline services and supported those most in need.

“We brought in £50 million more a year in business rates and council tax, created 31,000 new jobs and 4,500 new businesses and built 17 new schools.

“The last five years have seen over £10 billion spent on schemes that will continue the transformation of our city.

“These achievements have rocketed Liverpool into a northern powerhouse that the people of our city recognise...

"With success brings jealousy and I want to digest fully today’s report before commenting on specific details.

“In the meantime, people should know that I have not been charged with anything and I completely deny the allegations that have been made against me.”

  • Robert Jenrick: Commissioners won't take over but work in partnership

Mr Caller’s scathing report begins: “Indeed, the position documented by the Inspection provides the best empirical evidence of Conquest’s Third Law of Politics ‘The behaviour of any bureaucratic organisation can best be understood by assuming that it is controlled by a secret cabal of its enemies’.”

Inspectors focused on property management, regeneration, highways, contracts and planning at the council over the past five years, which has seen a building boom in Liverpool city centre.

They found no proper scrutiny or documentation on land, leasing and contract deals, that councillors awarded funding to an organisation where a fellow councillor worked and those given council land lease deals were “drawn from a very restricted pool”.

Documents were often destroyed and council officers had to “rescue case files from skips each morning”, and in the Regeneration department, “the only way to survive was to do what was requested without asking too many questions or applying normal professional standards”.

The report said the council ethics or standards committee last held a meeting nine years ago.

Joe Anderson says he'll continue to fight to clear his name Credit: PA

Liverpool being run remotely from London via commissioners appointed by a Conservative government will not be thought popular in the city, which was last controlled by the Tories in 1972, which lost its last Tory MP 38 years ago and has not had a Tory councillor elected since 1998.

However shadow communities secretary Steve Reed said that it was not a “Tory takeover” of Liverpool and Labour supported the government moves.

The government stopped short of taking control and is considering sending in commissioners for key services Credit: PA

He told the Commons: “Labour, both here and our leadership at the city council, accept this report in full.

“The council will respond to (Mr Jenrick’s) letter in detail but we support his intention to appoint commissioners, not at this stage to run the council, as he says, but to advise and support elected representatives in strengthening the council’s systems.”

Mr Caller’s report also calls for a review of the council’s democratic arrangements, with fewer elections and fewer councillors.

The city council has a month to make representations but said it accepts the report as part of its, “journey of improvement”.