Wirral Council should consider selling town halls to generate funds, Levelling Up Report recommends

Damning findings have been revealed in an external assurance review into Wirral Council, commissioned to look into the authority’s finances after it asked for a government loan of £10.7 million.

If the council does not develop a solid plan to deal with its money problems, the report said it could be subject to a section 114 notice, meaning it would be effectively bankrupt.

The report, commissioned by the Department for Levelling Up, Housing and Communities (DLUHC) added: “The financial challenges facing the council are not solely attributable to dealing with COVID.”

The report argued that council officers and councillors themselves must take some of the blame.

It added: “The prevailing culture amongst officers and members [councillors] in the council prior to COVID had been to avoid difficult financial decisions.

“The prevailing culture has been attributed, in part, to political differences between parties contributing to a lack of consensus amongst members, but it also reflects how the relationship between officers and members has failed to deliver a realistic and viable financial strategy.”

The government report suggested Wirral Council moves away from a system where elections take place on three in every four years, to a system of elections just once every four years to stop short-term thinking.

The report continued: “None of the political parties has overall control of the council and the political uncertainty is exacerbated by holding elections in thirds, which means that the main parties are always focussed on the next election.

“The significant delays in agreeing a Local Plan [the long overdue plan for how Wirral Council will build thousands of homes over the next 15 years] illustrate the difficulties in reaching consensus on a strategic direction.”

The “culture” of the council was seen as a major problem.

The report read: “Current financial plans do not address the prevailing culture, which avoids making tough decisions and are by no means certain of success.

“We are concerned that officers may seek to compromise too quickly with members. There is a danger that officers appear to try to resolve the budget by less controversial solutions, that may not actually deliver the necessary saving or carry more inherent risk.

“Both approaches add to the impression that the financial state of the council is not especially serious, and it can be resolved behind the scenes by officers.”

Among the report’s ideas for solving the council’s perilous position is selling a raft of services and buildings.

Selling off town halls, libraries and leisure centres

The document added: “The council has rationalised a significant number of assets in recent years, but this has tended to focus on the office estate and land.

“Therefore, there remains opportunity to release further assets. Focus should be given to libraries, leisure centres, golf clubs, public conveniences.

“The focus for future asset disposals should be Wallasey, Birkenhead Town Halls in addition to Pilgrim Street.

“In total the sale of the sites could generate a significant capital receipt, reduce revenue spend by £685k, and avoid capital maintenance spend of £14.03m over a 10-year period.”

As well as this, the council was advised to pause its investment in the development of a new Community Bank, an organisation being set up to support small businesses and help the poorest in the borough to become more financially secure.

The bank is something Wirral Council is currently set to invest £5m in and is working with Preston and Liverpool councils to deliver.

The report said this was a distraction to the plans the authority needs to make to balance the books and that it was a financial risk.

The main source of comfort for the local authority in the report was the fact that it said the council’s request for £10.7m of support was “reasonable and necessary”, providing it took steps to make itself more financially secure.

Writing to Wirral Council’s Labour leader Janette Williamson, Kemi Badenock MP, Secretary for DLUHC, suggested that if steps were not taken to deal with the problems shown in the report, the support package was not guaranteed.

Ms Badenoch said: “I would ask that you set out in writing, within the next month, the steps you are taking in the immediate and longer term to respond to the review and implement its recommendations.

“Any faltering in this area would be of considerable concern and could lead to a reconsideration as to whether a different approach might be appropriate to secure the improvements that are necessary.

“Your response to the review findings will help to inform my final decision on capitalisation with respect to the financial year 2021/22 and any associated conditions.”

Wirral Council response

Paul Satoor, Chief Executive of Wirral Council, said: “Wirral Council welcomes the indication from DLUHC that the request for exceptional financial support is progressing. As part of the request for this additional support from government, independent assurance reviews have been undertaken.

“We will take time to fully digest the findings and recommendations made in these reviews.

“We are grateful to DLUHC for their ongoing commitment to supporting the council through this process.”