Levelling Up secretary announces 'government take over' of troubled Liverpool City Council

The government has revealed plans to take over all financial, governance and recruitment powers from a 'turbulent' Liverpool City Council.

Levelling Up Secretary Greg Clark confirmed the potential "turning point" intervention, which could significantly expand the council to the point of an effective full-scale takeover.

He said he was "minded to appoint a commissioner to oversee the financial functions" and set up a strategic advisory panel, chaired by Liverpool City Region Mayor Steve Rotheram.

Mr Clark says a new report by commissioners highlights "serious shortcomings" within the council, particularly around financial management and senior leadership.

But, the findings have been met with "deep concerns" by Liverpool Mayor Joanne Anderson who says "further government intervention "will not solve the issues.

In the report commissioners found "not enough progress has been made at Liverpool City Council over the past year", but said it had not requested "an extension to the length of the intervention".

Lead Commissioner Mike Cunningham said: “The report is clear that not enough progress has been made at Liverpool City Council over the past year. It outlines the barriers to improvement we believe the Council has faced and makes clear what must happen for the Council to make progress.

"The developments currently happening at the core of the Council, such as changes in leadership, are necessary to Liverpool City Council’s improvement. They are a positive sign that the Council is now embarking on the right path for success.

"Liverpool City Council has been through a turbulent time recently. We know substantial events, such as the resignation of the Chief Executive and the publication of the audit report into the handling of the energy contract, will have been unsettling.

"However, we are clear that the Council has a strong, capable leadership team, and very many committed staff members who do good work on behalf of the people of Liverpool to meet these challenges, with the support and oversight of Commissioners.

"We have asked for a widening of our powers as Commissioners in the report, which is a recommendation now going through a consultation process. By implementing the recommendations set out in our report, we are confident that Liverpool City Council will make progress at pace."

The local authority has struggled since the Max Caller inspection report, which highlighted long-standing issues within the council such as bullying, “dubious” deals and a "worrying lack of record keeping".

Earlier this year, the council's failed to renew their energy supply contract which cost the local authority millions of pounds.

Secretary of State Greg Clark has now appointed another commissioner to oversee the authority's financial management and transfer their governance and financial-decision making to the commissioners along with powers over recruitment.

It is effectively a full-scale takeover, with Whitehall set to give itself all major powers over how money is spent, how the city is run and who is hired and fired.

The Panel will be asked to nominate an experienced business leader to join them.

Levelling Up Secretary Greg Clark said: "The commissioners’ report shows that there are still serious shortcomings that need to be sorted out, especially in financial management.

"But I want this to be a turning point at which the City of Liverpool can see a bright future that lives up to the power this great city embodies."

Steve Rotheram, Mayor of the Liverpool City Region, will chair the new panel alongside former Leeds City Council leader Baroness Judith Blake and Sir Howard Bernstein, the former chief executive of Manchester City Council..

Mr Rotheram said: “The Caller Report was a watershed moment for Liverpool. Everyone recognised that there was an enormous job of work to do to get the council back where it belongs.

“The Liverpool Strategic Futures Panel has been set up to help chart the city’s path to stability and prosperity.

"We aren’t being asked to take control of the council or the running of its day-to-day activities, but we will be working with the commissioners and the council itself to develop a long-term plan for success."

Responding to the report, the city's mayor Joanne Anderson said further government intervention "will not solve the issues" facing the council.

She expressed her "deep concerns" at the recommendations and said she fears " that this would only dilute the core purpose of the intervention.

"Whilst I accept the problems that have been outlined in the report, I question the solution."

Mayor Anderson, said while she agreed with commissioners about major gaps in the workforce capacity and capability, she said this was not unique to Liverpool.

She added: "There is a shortage of qualified, senior staff across local government, which is making us dependent on interim staff that cost more in the short-term.

"Many other councils are in exactly the same position, as this is the national picture. 

"Under government intervention, our council faces an additional barrier in recruiting talent as people assume that they will have no freedom to manage or work creatively here.

"Further government intervention will not solve the issues facing Liverpool City Council - these are common issues being experienced right across local government."

Liverpool City Council and other interested parties will have until 2 September to provide representations on these proposed intervention measures.

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