Liverpool Council’s multi-million pound energy bill blunder ‘a case study’ of wider issues

Liverpool Council’s energy contract failure is a case study of the wider issues the authority faces according to a government appointed official overseeing it.

In a rare public intervention, lead commissioner Mike Cunningham said the council still had a “long distance to travel” in terms of getting back on its feet as councillors debated the expensive failings around its electricity provision.

A devastating report was published into the energy contract howler at the Cunard Building earlier last week laying bare the details of what happened.

What is the energy contract failure?

Last week, it was revealed that Liverpool City Council failed to properly extend their energy contract, resulting in costs of an estimated £7.5 million, though the exact figure has not yet been released.

The investigation by Accountants Mazars, discovered that a Cabinet report requesting approval to extend Liverpool’s energy contract was not given to the Mayor and Cabinet until after Scottish Power withdrew from the commerical trading market, causing them to have to find an alternative supplier.

The Mazars report showed no evidence of malpractice, however, the error critically affects the city’s schools and Merseyside Fire and Rescue Service, who all have to pay their energy bills on the same contract.

The report identified gaps in the council’s own audit process, criticised individual decision making and accused the authority of failing to learn lessons from previous contract renewals.

Mazars have recommended that Liverpool City Council undertake detailed reviews of workloads within the Council and their Internal Auditing reports in order to prevent further failures.

What happened at Wednesday’s Audit Committee meeting?

Members of the audit committee had their first opportunity to publicly discuss the findings at Liverpool Town Hall on Wednesday.

Addressing members, Mr Cunningham said: “This is a case study in the challenge currently facing the council, in terms of work loads, identifying risk, decision making. All these things are well rehearsed and set out in brutal detail in the Best Value report.

“These things aren’t new but the question is how quickly can they be addressed and they need to be addressed differently. You want us out and I don’t blame you.

“We should be leaving Liverpool as a viable and sustainable council but there is still a long distance to travel.” Mr Cunningham said he was “heartened” by the conversations taking place and said there was a “common will” to progress but it needed to be changed into rapid action.

The lead commissioner added that there had been a change in pace at the authority and his team were “desperate” to write a positive report to the government. He said they hoped to do so in December.

Nigel Layton of Mazars told councillors their report found “clear and significant failures” at Liverpool Council and a “combination of factors” had led to the errors that have befallen the authority.

Labour group chief whip, Cllr Ruth Bennett, said the Mazars report did not identify anything members did not already know and questioned its value for money.

Former acting Mayor Cllr Wendy Simon was also critical of the report for its lack of not providing timescales or how to rectify issues around controls needed by the chief executive. She said: “Without this, we’re going to continue to be in the situation where staff are overworked.”

A number of councillors questioned the culture within the Cunard Building, with Cllr Barry Kushner claiming the Mazars’ report was not the first time he had heard of officers feeling they were unable to speak up. Jacqui McKinley, chief operating officer, stressed that improving the culture was a “top priority” for the authority but stressed it would take time.

Cllr Frazer Lake, newly appointed assistant mayor with responsibility for contracts and commissioning said: “It isn’t good we’ve been back in the media.” He added: “Obviously things went wrong” and conceded there had been confusion over roles and responsibilities.

The Fazakerley member said he was “confident” the council was on the right track and making sure the relevant measures were in place, telling members they had to make sure they were protecting the council and residents of the city.