Government inspectors are to take over the running of three Liverpool City Council departments after a damning report into the ‘dysfunctional culture’ of the authority was published. Tony McDonough reports

 

Government inspectors are to take over the running of three Liverpool City Council departments following a damning report – but they will not take full control of the city.

In a statement to the House of Commons on Wednesday, the Secretary of State for Housing, Communities and Local Government, Robert Jenrick, said a report he commissioned into the running of the authority “paints a deeply concerning picture of mismanagement, breakdown of scrutiny and accountability”.

Mr Jenrick said the council was home to “dysfunctional culture” which was putting public funds at risk. He referred to multiple failures around record-keeping, some of which had been lost or dumped in a skip. He added that a “pervasive and rotten culture” had persisted for too long.

The Secretary of State said the report, from Government inspector Max Caller, had identified “a lack of scrutiny and oversight across highways, including dysfunctional management practices, no coherent business plan and the awarding of dubious process”.

There had been a “fundamental failure’ of audit and governance”, said Mr Jenrick, and he is now sending in commissioners to work alongside officers and councillors to run the highways, regeneration and property management functions of the council.

Mr Caller found failings in relation to land disposal, governance and the relationship between elected members and officers, and made a series of recommendations to tackle them. This includes sending commissioners in for three years, a reduction in councillors and a move to all-out elections every four years.

Click here to read the full report

Mr Caller also made it clear that he believes the organisation has already taken steps to address the issues since the arrival of chief executive Tony Reeves in 2018. Mr Jenrick told MPs: “Given the gravity of the inspection findings, I must consider what would happen if the council fails to deliver the necessary changes at the necessary speed.”

The council has pledged to address all of the concerns raised and continue its journey of improvement. It will publish an improvement plan after the local elections in May.

 

In a joint statement, Acting Mayor Wendy Simon and Mr Reeves, said: “This is a difficult day for our organisation and we take the report findings extremely seriously. The inspector’s report has highlighted several failings, but there is a collective commitment from both councillors and officers to learn from these mistakes.

“We would like to reassure all residents and businesses that we will take action to address all of the issues highlighted. We know we need to rebuild your trust. It is reassuring that the inspector believes we have made progress in starting to deliver the wholesale changes needed.

A detailed improvement plan is being drawn up and will be implemented in full. We will be open and transparent about the progress we are making on each of the recommendations.

“This includes restructuring the organisation to strengthen our governance and ensure our work is aligned with our pandemic Recovery Pledges and the City Plan. At the same time, we will ensure we keep delivering essential services and offering a helping hand to the people of our city.”

Concerns over the governance of the city came to public attention in December 2019 when the council’s head of regeneration, Nick Kavanagh, was arrested by Merseyside Police as part of the Operation Aloft investigation into council property deals.

Liverpool developer Elliot Lawless was arrested on the same day. Both men were released on bail pending further investigations. They both continue to protest their innocence and, in both cases, are no longer on bail.

This week, Mr Kavanagh was dismissed from his post with immediate effect, following a hearing of the council’s Appointments and Disciplinary Committee. In a statement to the Liverpool Echo, he said: “From the beginning, it has been clear to me that no matter what factual evidence I provided it would make no difference.

“I have stayed silent since my suspension in December 2019 because as a public servant it is not my place to comment on matters without the authorisation of my employer. If it goes to a tribunal that will be independent unlike this investigation and the Government review which has followed the narrative of the city council chief executive.

 

“At that public tribunal, I will be more than happy to share my factual evidence and the collusion that has taken place in order to create an impression of wrongdoing and then pin it on one person.”

In December 2020, events took an even more dramatic turn when Liverpool’s elected Mayor, Joe Anderson, was also arrested as part of Operation Aloft. He was held on suspicion of conspiracy to commit bribery and witness intimidation. Four other men were arrested at the same time as part of the same investigation.

This week an application to extend Mr Anderson’s bail conditions was dropped by Merseyside Police, although he remains under investigation. Shortly after his arrest and release in December he stepped aside as Mayor of the city with Cllr Wendy Simon taking over. He had originally planned to run as Mayor for a third consecutive term.

He said this week: “”I have received the notification that police have withdrawn my bail conditions. I will continue to work with Merseyside Police to assist with their investigations. I remain confident that my name will be cleared and I will continue to fight to do that.”

Chief executive of Liverpool-based business lobby group, Downtown in Business, Frank McKenna, said: “On behalf of Downtown in Business and our members I think people will welcome the fact that it (the report) gives the city an opportunity to reset and to move forward.

“I’m sure we’ll learn from any mistakes that have been made but recognise that over the past 15 years Liverpool has been a real success story and there is no reason why that progress shouldn’t continue. We have some great projects, the Knowledge Quarter, Freeport status and Bramley Moore Dock. There are many many things to be positive about.”

And city region Metro Mayor, Steve Rotheram, added: “Clearly the council has a big task ahead of it to rebuild trust and restore confidence. This will not be a quick or easy process but the Combined Authority will continue to to offer the council whatever help we can.

“This is a difficult day, but we shook not forget that we remain an open, welcoming and growing region that is already rebuilding from the damage wrought by COVID and getting ready to welcome visitors from around the world once restrictions ease.”