City council handed back key functions as Secretary of State gives green light to reduced intervention

The Secretary of State for Levelling Up, Housing and Communities, Michael Gove, has approved a reduced intervention package at Liverpool City Council, with some functions carried out by Commissioners handed back to the local authority.

Commissioners were first appointed at Liverpool in June 2021 after an inspection found "multiple apparent failures" in relation to the best value duty. Currently the five Commissioners can exercise functions relating to regeneration, highways, finance, and property and their associated governance.

In a written ministerial statement today (7 March 2024), Local Government Minister Simon Hoare said the Commissioners would no longer exercise the following functions:

• all executive functions associated with highways, from 31 March 2024;
• the requirement from section 151 of the Local Government Act 1972, to make arrangements for the proper administration of the authority’s financial affairs, and all functions associated with the strategic financial management of the authority, from 31 March 2024, to include:
• the power to amend budgets where Commissioners consider that those budgets constitute a risk to the authority’s ability to fulfil its best value duty;
• providing advice and challenge to the authority in the setting of annual budget and a robust medium term financial strategy (MTFS) for the authority; and
• all functions in relation to the appointment, organisation and performance of persons to positions the holders of which are not designated as statutory officers, and the designation of those persons for tiers 1 to 3 from today (7 March 2024).

Hoare said the Secretary of State recognised “the progress made” and that the move was part of a planned and phased transition towards the end of the intervention.

The minister added that directions issued to Liverpool today direct the council to undertake a range of actions to the satisfaction of Commissioners, including to:

• allow Commissioners to provide advice and challenge to the authority on strategic decisions related to its finance function, including the setting of annual budgets and medium term financial strategy;
• continue to build on improvements to rebuild trust with residents, “in particular to improve FOI performance, report writing and systems to record delegated decisions”;
• complete a review of the strategic risk management and implement a strengthened mechanism based on its recommendations;
• significantly progress the implementation of the corporate landlord model, commence the stock condition surveys to understand better the asset base, develop comprehensive asset management plans and produce a revised structure for the property directorate; and
• continue to establish and implement a cultural change programme which embeds a customer focus, performance management culture, systems and reporting across the organisation.

The Secretary of State has also removed directions to the authority that the Commissioners had confirmed have been met and revoked the directions issued on 10 June 2021 and 8 November 2022.

Hoare added that the Commissioners would continue to exercise functions relating to governance, regeneration, property management and appointments (for directors of property, HR/OD and statutory officers).

The next Commissioners’ report is due this month and is expected to set out what will happen at the scheduled end of the intervention in June 2024.

Council Leader, Cllr Liam Robinson, said: “I am really pleased that the Government has accepted the recommendations of the Commissioners and confirmed the handing back of some powers to the council ahead of schedule.

“It is recognition of the fact that we have made significant progress over the last nine months or so, although we know that we have much more to do.”

He added: “We are continuing to work at pace to deal with those areas where we still need to make progress, such as property management.

“I am confident this marks the beginning of the end of the intervention as we know it. It is a tribute to the hard work of staff and councillors who have worked so hard to put in place the building blocks for improved services.

“I want to reassure residents that we are not complacent and we continue to move at pace to drive the improvements we need to make and achieve our ambition of becoming an excellent council delivering value for money services.”