Government commissioners publish first report on Liverpool City Council emerging from ‘toxic period’

Government commissioners have published their first report into Liverpool City Council as it emerges from a ‘toxic period’.

The commissioners were sent in by the Government in June this year to assess the council following a damning independent inspection report, which found serious failings within the organisation.

A culture of “bullying” was identified and questions were raised over the “invalid valuations” of property transactions.

“The council is emerging from a difficult, somewhat toxic period that has led to police investigations,” the report, published today, states.

“As a Commissioner team we recognise and applaud the courageous leadership decisions that have exposed wrong-doing,” it adds.

The report recommends ten actions the council needs to prioritise over the next six months, including a new financial strategy and reform of the council’s constitution.

Commissioners noted that the council needs to save around £33m for 2022/23.

The commissioners have also asked the Chartered Institute of Public Finance and Accountancy to review the Council’s “financial resilience”.

Why the report was commissioned

In early December 2020, former Mayor of Liverpool Joe Anderson was one of five men arrested as part of an investigation by police which included allegations of corruption at the council. All those arrested denied the allegations.

Later that month, the Government appointed Max Caller, who has held several key roles in local government and is former Chair of the Boundary Commission, to carry out an independent inspection of Liverpool City Council.

Results of the inspection, which found failures across the council, were published in March this year and commissioners were sent to assess the City Council in June.

What the commissioners report found

Some of the main areas of concern highlighted in the report were around property transactions and it questioned some of the valuations placed on assets.

The commissioners noted there had been an “unprofessional and bullying culture” that many of the council’s property and regeneration officers had been forced to operate in.

Commissioners said they had received 59 complaints so far about the council and many of those concerned property transactions.

The report warned that commissioners remained unconvinced that internal property valuations were aligned to market conditions and requested that one in five valuations are conducted by an external agency in future.

“We have found evidence of officers accepting invalid valuations which were close to their expiry date [three months] or valuations which were unsigned and it is not clear who provided the valuation,” the report stated.

Also, there is a “considerable backlog of approximately 300 planning applications which is clearly constraining development in the city”.

The report also noted the need to address “serious failings over recent years” with regards to highways, regeneration and property management functions.

Commissioners noted that the council’s cabinet is comparatively new and with the exception of the Deputy Mayor Jane Corbett, has limited political leadership experience.

“The fresh eyes and renewed energy of this new cabinet presents an opportunity for the council and the city,” the report stated.

“To take full advantage of this opportunity, the cabinet must use the next six months to focus on agreed critical priorities: making tough decisions, especially on budget and service delivery matters, and, above all, owning the intervention.”

Commissioners also noted that senior council officers initially had a lack of understanding and recognition of the significance of their role which “has hampered progress and impacted on officers ability to grasp the seriousness of the intervention”.

They said this was being addressed by the chief executive.

In a letter to commissioners, Michael Gove, Secretary of State for Levelling Up, said the report showed the council is facing “significant challenges” and said he expected it to continue to prioritise the “intervention and transformation work”.

He also praised the Council for its response to the terrorist attack which took place outside Liverpool Women’s Hospital on Remembrance Sunday.

A second report from commissioners is due in April 2022.

Ten recommended actions for Liverpool City Council

Commissioners recommended the Council prioritises the following actions over the next six months:-

• Develop and agree a Council plan.

• Develop a strategic improvement plan setting out desired outcomes and timescales.

• Introduce a robust prioritisation process allowing the Council to optimise their use of limited resources.

• Identify and address the capacity and capability gaps in Council corporate functions.

• Develop a finance improvement plan to address weaknesses if identified in the Chartered Institute of Public Finance and Accountancy (CIPFA) review of the Council’s finances.

• Produce an interim medium term financial strategy.

• Develop a robust strategic risk register.

• Agree the scope of work to reform the Council’s constitution, including a fundamental review of the scrutiny process.

• Implement a Council-wide cultural survey to establish a baseline against which culture change can be established.

• Continue to strengthen the Council leadership’s capacity and capability to scrutinise decisions. Improve the quality of report writing, record keeping and provision of financial information.

Liverpool City Council’s response

Liverpool’s Mayor Joanne Anderson and the city’s Chief Executive Tony Reeves issued a joint statement in response to the report’s publication.

The pair said that an “immense amount of work is underway” within the council to bring in changes and that “the culture of bullying and intimidation” that had existed in parts of the organisation is being tackled.

“The well-publicised issues within the Highways and Regeneration teams are being tackled head on. These teams both have a new head of service to instigate the necessary changes to drive up standards, including a new business plan for the Highways department.

“Where the council has failed in the past to address a culture of bullying and intimidation, that is now being tackled through an intensive programme to make the workplace more inclusive and caring. We have clear processes for staff to raise concerns and these are acted on and dealt with in a consistent way. These behaviours have no place in our organisation.”

“The council has a huge number of dedicated, professional and talented staff who care deeply about the service they provide and it is our job to ensure they have the right support to deliver best value.

“A restructure of the senior management team is underway, with key posts such as the Monitoring Officer and Chief Operations Officer being filled.

“The scrutiny process has been strengthened with independent professionals being appointed to the Audit and the Standards and Ethics Committee.

“Work is underway to meet all of the directions which the Secretary of State placed on the council including a review of the constitution and scrutiny arrangements of the council and the development of a submission to the Boundary Commission on a revised pattern of wards for the city.”

Liverpool’s ward boundary changes

As a consequence of the investigations, Liverpool City Council has been ordered by the Government to hold whole council elections from 2023 and to have a reduced number of councillors.

The number of councillors in Liverpool will drop from 90 to 85 and that means changes to the current wards.

The Boundary Commission’s changes will come into effect for council elections in 2023 and local people can have their say on where the lines are drawn during a 10-week consultation.

Two online meetings are taking place for Liverpool residents.

The meetings will start with an explanation about the review, so there is no need to know about current arrangements. They will let people know how to get involved during the process too.

The meetings are:

Wednesday, 1 December, 14:00 – 15:00: https://bit.ly/30UwaGK

Thursday, 2 December, 19:00 – 20:00: https://bit.ly/3FCVj7u

There will be further chances to get involved with the boundary review.

Local people and groups will be asked to give their views on the proposals before making firm recommendations.