MS 14 - City of Liverpool Council

[Macmillan]

Kwasi Kwarteng, Secretary of State for Levelling Up

Mr Speaker with your permission I would like to make a statement on the recent developments in Liverpool City Council.

Mr Speaker as most in the House will be aware Liverpool City Council was placed into special measures as a result of an investigation by Merseyside Police. It is a matter of public record that they spent many months conducting an investigation which has resulted in a number of arrests made on suspicion of fraud, bribery, corruption and misconduct in public office, both in December 2019 and in September 2020. Further arrests were made on 4 December 2020 in connection with offences of bribery and witness intimidation. This investigation has enveloped both the former Mayor, Labour's Joe Anderson, and the former Chief Executive, Ged Fitzgerald.

Mr Speaker as the Council was placed in once unthinkable special measures by one of my predecessors the Right Honourable Member got Newark, this involved certain constitutional and democratic reforms in Liverpool City Council as well as the appointment of commissioners to oversee and exercise certain limited functions on behalf of the people of Liverpool while the rot was excised from the Council. These commissioners have, among other powers, all executive functions associated with regeneration, highways, and property management at Liverpool City Council in the event that the Authority does not continue to make improvements. Mr Speaker the report I received this week suggests that there is still a long way to go until we can say that Liverpool City Council is rot free.

Mr Speaker I received a report from Commissioners and the Civil Service this week which I shall read to the House the key points from:

• The bribery, corruption, fraud and financial mismanagement has shown little sign of abating: it is more deep-rooted than feared after the long tenure of the previous Mayor.
• Former concerns that the problems facing Liverpool City Council was limited to certain departments has been understated, the issues appear to be council wide, particularly when relating to finance.
• There are concerns about financial decision making particularly as a result of this. It is patently failing on every measure in its duty to provide best value for residents: the council’s errors in renewing energy supply and failure to act on other contracts (20 identified by the inspectors) has cost the council £20m. 
• The investigators have found little to fault in the current Mayor of Liverpool City Council who they have praised as being cooperative, though there are doubts she alone is able to resolve the issues facing the council. The investigators are particularly enthused that she has appointed Theresa Grant as Chief Executive, who has had previous successful experience in running failing councils subject to government intervention.

As a result of the issues identified in this report certain recommendations were made to the Government which were brought to discussion with the Mayor of Liverpool City Jo Anderson and the Metro Mayor of Liverpool James Riley. The Government came into the meeting with a series of objectives which I am happy to share with the House:

1. The corruption must end as quickly and efficiently as possible
2. The deal struck must represent good value for money for the taxpayers of both Liverpool City Council and the United Kingdom
3. The deal must be supported by both the Metro Mayor and the City Mayor of Liverpool

Mr Speaker after long discussions in the City of Liverpool I am pleased to confirm to the House that such a deal has been reached. I am delighted to be able to confirm the terms agreed between myself, Jo, and Jim are as follows:

• All Commissioners are granted executive powers on recruitment and retention.
• Two new commissioners are sent in: one overseeing recruitment within the council and another overseeing local government finance. The Secretary of State shall receive monthly reports from the Commissioners and take charge from the Central Government side.
• The commissioners and wider council be supported with an additional £10m funding from central government. This will take the form of an interest free loan of £4mn to be repaid within ten years and a £6mn grant to specifically cover the additional costs presented by the Commissioners.
• An advisory council of political leaders be established to oversee and assist the council in setting strategic aims and a path to meeting those aims. This will be co-chaired by Lord Heseltine and Jim Riley, it will be made up of further experts and former Council Leaders.

I am pleased to report that Lord Heseltine and Mayor Riley have agreed to co-chair and can confirm the other five members to be:

• The Baron Alton of Liverpool
• The Lord Storey
• Steve Rotheram
• Baroness Blackstone
• Anna Rothery

The panel will represent a broad stroke of political ideologies and allegiances with all members having strong ties to the City of Liverpool or past experience of managing failing councils. They will report regularly to me and be available to Liverpool City Council as it begins to rebuild after a prolonged period of poor management.

Mr Speaker it is my fond hope and desire that these measures are not to resemble anything close to a normal state of affairs, or present any form of permanence on their face. These are special measures, these are emergency actions to save the people of Liverpool from their Local Government. We have cut off one head of the hydra we are faced with but there are many more to come. As the report makes clear corruption is still rife, we have ongoing police investigations, and the people of Liverpool have many challenges ahead. I will continue to pursue this in my role as Secretary of State to ensure that we can turn Liverpool City Council from one of the most corrupt Councils in the modern history of our nation to one of the best performing ones. I am grateful to Jo and Jim for their unwavering support in compiling these measures and hope that we will be able to engage constructively going forward to put the best interests of the people of Liverpool front and centre.

Mr Speaker, I commend this statement to the House.