Government set to step up financial and governance intervention at Liverpool City Council

The Secretary of State for Levelling Up, Housing and Communities, Greg Clark, has told Liverpool City Council that he is minded to increase the degree of government supervision of the local authority following a report by Commissioner Max Caller that the council is failing to meet its “best value” duties.

In a letter dated 19th August, the minister informed the council that capacity and capability failings at senior management level meant that he planned to appoint a commissioner to oversee the financial, governance and recruitment functions of the council. The council has until 2nd September to respond to the proposals.

In June, a separate report commissioned by the mayor of Liverpool, Joanne Anderson, found that failed to take action on 12 expiring contracts across different parts of the council’s services, compromising the council’s “best value” duty. These included errors in renegotiating the city’s energy supply contract, estimated to cost the council to to £10m.

In 2021, the government appointed four commissioners to oversee some functions after a government report into the council’s highways, regeneration and property management functions found serious governance issues and ““multiple apparent failures” of these functions.

Clark also announced the creation of a new Liverpool Strategic Futures Advisory Panel to work with the government’s commissioners to “craft a plan for Liverpool’s revival”. This panel would be chaired by the Metro Mayor of the Liverpool City region, Steve Rotheram, alongside Sir Howard Bernstein, the former chief executive of Manchester City Council, and Baroness Blake, the former leader of Leeds City Council and another member from the business community. Rotheram told the BBC that the panel would not run the council, but "advise and offer support in setting strategic longer-term plans and priorities".

The mayor of Liverpool, Joanne Anderson, said that while she accepted the problems identified by the reports, and welcomed the creation of the advisory panel, she did not agree that the government’s plan was the solution.

“Further government intervention will not solve the issues facing Liverpool City Council,” she said. “These are common issues being experienced right across local government.

“Whilst I recognise that there are gaps in our workforce capacity and capability, this is not unique to Liverpool. The UK is facing stark skills shortages, and it widely known that local councils are struggling to improve capacity in key areas, which is making us dependent on interim staff that cost more in the short-term. Under government intervention, Liverpool City Council faces an additional barrier in recruiting talent as people assume that they will have no freedom to manage or work creatively here.

“Liverpool City Council, like all big councils, has been massively impacted by years of government cuts. We have lost £465 million in funding since this government came to power in 2010, so it is not surprising that there are areas where we can improve performance.”

The city council also announced that a Theresa Grant, chief executive of Northamptonshire County Council while it was subject to government intervention, will replace Tony Reeves, who resigned in July, as chief executive in September on an interim basis.