Michael Gove – 2021 Statement on Liverpool City Council: Commissioners’ First Report

The statement made by Michael Gove, the Secretary of State for Levelling Up, Housing and Communities, in the House of Commons on 25 November 2021.

On 10 June 2021 the then Secretary of State for Housing, Communities and Local Government, my right hon. Friend the Member for Newark (Robert Jenrick), updated the House that he had appointed a team of four commissioners to Liverpool City Council. The commissioners’ responsibilities are set out in directions made under section 15(5) and (6) of the Local Government Act 1999 and include oversight of the council’s highways, regeneration and property management functions together with the associated audit and governance arrangements. The original best value investigation was initiated following a police investigation into allegations of fraud, bribery, corruption and misconduct in public office which involves a significant connection to Liverpool City Council. The wider criminal investigation into corruption is ongoing.

The commissioners submitted their first report to me on 5 October 2021 and I have discussed it with them. I was pleased to hear about the steps the council has taken to expose and stop wrongdoing. It is vital for Liverpool’s transformation that a clear line is drawn between the council of the past and the council of the future. The commissioners recognise the hard work, ambition, and determination of the Mayor and her cabinet, as well as the corporate leadership team. The commissioners have met dedicated and talented staff across the council who are working hard to deliver vital public services.

The commissioners have outlined to me, as they have stated clearly in their report, that the council is at the beginning of a long improvement journey and has a great deal to do in the next three years. In addition to the precise functions listed in the directions, the commissioners have encouraged the council to take a whole-council approach to improvement, with an expectation that the plans being developed will reflect this position. The commissioners are working with the council to develop their strategic improvement plan so they can focus on setting a sustainable long-term financial plan, improve corporate governance, deliver basic services well and meet the requirements of the statutory directions.

The commissioners shared with me their concerns about the council’s financial resilience and have outlined these in their report. I welcome the forthcoming review of the council’s financial resilience being conducted by the Chartered Institute of Public Finance and Accountancy (CIPFA) at the request of the commissioners. This review is expected to be completed before Christmas.

Given the circumstances of the intervention and legacy of the previous administration, it is not surprising that commissioners have found that the council’s approach to regeneration and property management lacks rigour and commercial awareness. I welcome commissioners working with these teams to embed strong commercial principles in these functions. Commissioners are also working with the planning team to address the lack of strategic policy frameworks and the significant backlog of planning applications which are constraining development in the city. It is likely to take another 12 to 18 months to fully stabilise the highways and transport functions in order to provide a firmer foundation for onward improvement.

Electoral reform in Liverpool is an important part of the intervention. On 22 September, in line with the terms set out in the statutory direction, a submission to the Local Government Boundary Commission for England (LGBCE) was approved by full council. In this the council proposed a reduction in the number of councillors from 90 to 85; and on 1 October, the LGBCE announced it was “minded to” accept the proposal. The council is due to submit its ward pattern proposal in December 2021. In addition, the intervention package includes the use of powers in the Local Government Act 2000 to provide for full council elections for the City of Liverpool from 2023. An order which delivers these electoral changes was laid before Parliament on 27 September and came into force on 29 October 2021. It provides for all Liverpool City Council councillors, and the directly elected executive Mayor of the City of Liverpool, to be elected and retire together every four years, starting in 2023.

I am mindful of the recent terrorist incident which took place in Liverpool on 14 November and commend the council for its response efforts. No one can doubt the professionalism and public service shown in the response by local government, the NHS and emergency services. I know that going forward, the Council will draw on the expertise of the commissioner team as needed as the community pulls together from this event over the coming weeks and months. I am however clear that the parameters of the intervention have not changed, and I expect the council to continue to prioritise the intervention and transformation work.

The council has a significant challenge ahead of it to provide the services that the residents of Liverpool City Council deserve. My Department stands ready to support commissioners in any way needed to secure this transformation and enable the council to contribute to our levelling-up agenda.

The commissioners have agreed to provide their next report to me in April 2022 and I will update the House on further progress with the intervention at that time.

A copy of the commissioners’ first report will be placed in the Libraries of both Houses.