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Housing secretary Robert Jenrick has announced plans for the government to take control of Liverpool City Council after finding evidence of “deeply concerning mismanagement” and a failure to comply with its best value duty during procurement.
The announcement to Parliament came after an investigation by Merseyside Police involving a link to Liverpool City Council which has led to arrests on suspicion of fraud, bribery, corruption, misconduct in public office and witness intimidation.
Following the investigation, Jenrick informed the House of Commons in December 2020 of evidence regarding the council’s planning, highways, regeneration, and property management functions, which led to a best value inspection by former chief executive of Barnet, Hackney and Tower Hamlets councils Max Caller.
Jenrick said Caller’s report “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”.
He added: “The report identifies multiple apparent failures by Liverpool City Council in complying with its Best Value Duty.”
Among the issues identified in Caller’s report were:
- A failure of proper and due process across planning and regeneration, including a lack of proper record keeping.
- A lack of scrutiny and oversight across highways, including “dysfunctional” management practices, no coherent business plan, and the “awarding of dubious contracts”.
- A “failure of proper process” relating to property management,.
- Poor governance arrangements for Council-operated companies.
- An “overall environment of intimidation”, described as one in which “the only way to survive was to do what was requested without asking too many questions or applying normal professional standards.”
The report concluded the Council’s pervasive culture “appeared to be rule avoidance”.
Jenrick said the report was not a verdict on the staff working at Liverpool City Council and he recognised that current chief executive Tony Reeves and statutory officers have taken “positive remedial steps”. He added that the report also did not comment on the Liverpool City Region Combined Authority, on mayor Steve Rotheram, or other councils in Merseyside.
Jenrick said: “I am satisfied that the council is failing to comply with its best value duty. Therefore I need to consider exercising my powers of intervention to secure compliance with the duty.
“To that end, in line with procedures laid down in the Local Government Act 1999, I am writing today to the council asking them to make representations – both on the inspector’s report and on a proposed intervention package.
“This package is centred on putting in place commissioners who I will appoint to exercise certain and limited functions of the council as required, for a minimum of three years.”
Jenrick also proposed transferring all executive functions associated with regeneration, highways and property management at the council to the commissioners.
Liverpool City Council is expected to hold whole council elections for the first time from 2023.
Jenrick is expected to make a final decision on the proposals by 24 May, after taking representations from the council on the report.
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