The Government is set to make a rare intervention and could take over running parts of Liverpool City Council following arrests on corruption allegations.
Commissioners appointed by the Ministry for Housing, Communities and Local Government will oversee some of the day-to-day operations in the staunchly Labour city from Westminster.
While the commissioners will occupy more of an advisory role initially, they do have the power to take control, unless improvements are made by the council quickly.
It’s only the fifth time ever that such an intervention has been deemed necessary and comes after a damning report into the city council’s handling of regeneration and building contracts over the past five years.
The report was ordered after the arrests of five men, including elected mayor Joe Anderson, who was held on suspicion of conspiracy to commit bribery and witness intimidation. He denies any wrong-doing.
Max Caller, a local government inspector who was called in by communities secretary Robert Jenrick, found the council ‘consistently failed to meet its statutory and managerial responsibilities’ and that the ‘pervasive culture appeared to be rule avoidance.’
Outlining the findings of Mr Caller’s report in the Commons, Mr Jenrick said the inspection had identified ‘multiple apparent failures’.
Documentation had sometimes been created retrospectively, discarded in skips or even destroyed, the minister said, while evidence was also found of ‘dysfunctional management practices, no coherent business plan and the awarding of dubious contracts.’
Land and assets were often incorrectly valued, meaning ‘taxpayers frequently lost out’, according to Mr Jenrick.
He added the report found ‘an overall environment of intimidation described as one in which the only way to survive was to do what was requested without asking too many questions or applying normal professional standards’.
Mr Jenrick said: ‘Expressed in formal terms, I am satisfied that the council is failing to comply with its best value duty. Therefore, I need to consider exercising my powers of intervention to secure compliance with the duty.
‘To that end, in line with the procedures laid down in the Local Government Act 1999, I am writing today to the council asking them to make representations both on the Inspectorate’s report and on a proposed intervention package.
‘This package is centred on putting in place commissioners who I will appoint to exercise certain and limited functions of the council as required for a minimum of three years.
‘I will take whatever steps are necessary to uphold the good name of local government.’
Under the process the local authority is given 10 days to make representations on the proposals.
The council’s director of regeneration, Nick Kavanagh, was also arrested as part of the police probe into building and development contracts in the city and this week it was confirmed he had been dismissed from his role at the authority.
Both he and Mr Anderson deny any wrongdoing and have vowed to clear their names.
Merseyside Police said all suspects remain under investigation but bail has not been extended while their enquiries continue.
Liverpool has not elected a Conservative councillor since 1998 and has not been run by the Tories since 1972. It last elected a Tory MP 38 years ago but will now be run remotely by commissioners appointed by a Conservative government.
All executive functions associated with regeneration, highways and property management are being transferred to the commissioners but will only be used if the council does not show signs of improvement.
Shadow communities secretary, Labour MP Steve Reed, said: ‘I want to reassure people in Liverpool that this does not mean Government ministers are coming in to run their city directly. This is not, as some would put it, a Tory takeover.
‘It’s about the Government appointing independent people of the highest professional standing to help the council improve as quickly as possible and intervening directly only if the council’s elected leaders fail to implement their own improvement plan.’
Liverpool’s acting mayor councillor Wendy Simon and chief executive Tony Reeves said in a joint statement that it was a ‘difficult day’ for the organisation.
They added: ‘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.’
Since 2010, the Secretary of State has previously intervened in four local authorities – Doncaster, Tower Hamlets, Rotherham and Northamptonshire.
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