INTERVENTION: Government set to take full control from Labour of Liverpool Council as it faces ‘stark’ £100m debt

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The Government is set to take effective full control of Liverpool City Council after a report warned the authority faces a “stark” financial future including debts of almost £100 million by 2025.

Liverpool is often held up as the epitome of a Labour stronghold — in fact since 1997 all the city’s MPs have been elected under the Labour banner. The party has also dominated the council since 2010, and held the city’s mayoralty since its creation in 2012.

However, a new report shows “key aspects” of the council’s core services are “failing and require urgent reform” and the authority is also facing a “funding gap” of £98.2 million for the period up to 2025.

The report also warns that poor performance in the areas of procurement, finance and auditing are limiting the “council’s ability to operate at a crucial time.”

Levelling Up Secretary Greg Clark this week announced he will set up a strategic advisory panel to develop a long-term plan to guide Liverpool City Council out of the current government intervention and help shape the future of the city, alongside confirming he is “minded to” expand the intervention in the council, in response to the latest report from commissioners.

The Liverpool Strategic Futures Advisory Panel will work closely with the City Mayor Joanne Anderson and her Cabinet, and also with the commissioners, to help the council make the right decisions and to develop a plan to give long term confidence in the future of the city, beyond the current temporary intervention. The panel will have a particular focus on driving growth in skills, jobs and opportunities for the city.

The Panel will be chaired by Steve Rotheram, metro Mayor of Liverpool City Region. He will be joined by two of the most experienced people in city leadership, Sir Howard Bernstein, Chief Executive of the City of Manchester from 1999 to 2017, and Baroness Judith Blake, Leader of Leeds City Council from 2015 to 2021. The Panel will be asked to nominate an experienced business leader to join them.

Using their expertise and knowledge, the Panel will work closely with Mayor Joanne Anderson and her Cabinet, members, and wider partners, as well as with the commissioners to support the council to make the right decisions and employ its resources to bring long-term confidence and meet the ambitions of the people of Liverpool.

This further step comes after the report on the council’s progress revealed serious shortcomings, particularly around financial management and senior leadership. It also criticised the slow progress made in driving improvement measures that were highlighted in the commissioners’ second report.

Four commissioners were sent into Liverpool City Council in June 2021 to oversee the Council’s highways, property and regeneration functions. They submitted a second report into the council’s progress on 10 June 2022.

Following the report, in addition to setting up the new Strategic Futures Panel, the Secretary of State is announcing that he is minded to appoint a commissioner to oversee the authority’s financial management and to transfer functions associated with governance and financial decision-making to the commissioners together with powers regarding recruitment to improve the running of the organisation.

Levelling Up Secretary Greg Clark said:

I am determined to help do everything I can to help Liverpool come out of the current intervention stronger and able to achieve its ambitions.

The commissioners’ report shows that there are still serious shortcomings that need to be sorted out, especially in financial management. But I want this to be a turning point at which the City of Liverpool can see a bright future that lives up to the power this great city embodies.

So following talks I had in person in Liverpool with Mayor Joanne Anderson and Mayor Steve Rotheram in recent weeks, I am appointing a new panel, chaired by that same Mayor Rotheram and supported by some of the wisest, and most experienced people in city leadership, to lead this transition from current interventions to a successful future.

Lead Commissioner Mike Cunningham QPM CBE said:

Our report outlines the challenges the council has faced over the past year in their improvement journey, and highlights some of the areas that need urgent improvement. We welcome the Secretary of State’s decision to expand the directions, and the creation of the Strategic Futures Panel. We have confidence that the council can now address these challenges.

Liverpool City Council and other interested parties will have until 2 September to provide representations on these proposed intervention measures.

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