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Local Government Update

Statement made on 10 June 2021

Statement UIN HCWS84

Statement

On 24 March 2021, I announced to the House that I was minded to appoint Commissioners to take over functions associated with highways, regeneration, property management, together with associated audit and governance arrangements at Liverpool City Council (“the Authority”). I also announced that I was minded to appoint Commissioners to take over functions associated with the appointment and dismissal of statutory officers.

At the same time, I also announced proposals to introduce electoral changes, in particular:

  • to make an Order using my powers in the Local Government Act 2000 to provide for whole council elections in 2023 and every fourth year thereafter; and
  • to direct the Authority to consider and consult upon a new submission to the Local Government Boundary Commission for England as part of the current boundary review, which includes consideration of a proposal to reduce the number of Councillors to those consistent with elections on a single member ward basis, and be approved by the Commissioners.

These proposals followed the publication of the independent Best Value Inspection Report, led by Max Caller CBE, which concluded that the Authority had failed to comply with its Best Value Duty over a number of years. The Report did not comment on the Liverpool City Region Combined Authority, on Mayor Steve Rotheram, or other councils in Merseyside.

The main finding of the Report, as set out in the Inspector’s covering letter, is that: “Liverpool City Council itself, under the officer leadership of Tony Reeves, has started to make some of the improvements necessary. However, the burden of the police investigation, the pandemic, and the legacy of past actions by the Council has prevented speedy progress. At political level, the Council needs a reset, until that happens and the work that is currently being undertaken is continued at pace and embedded, I cannot be confident about continued progress.”

As part of my announcement in March, I invited the Authority to make representations about my proposals on or before 24 May 2021. The Authority and two advocacy groups made representations, as did 13 members of the public. Most representations were supportive of the intervention and the proposal to appoint Commissioners. However, a number expressed concern about aspects of the electoral reforms which I had proposed, specifically in relation to the proposal to introduce single member wards and to reduce the number of Councillors for the City.

Best Value Intervention in Liverpool City Council

Following consideration of these representations, and further consideration of the Inspector’s Report, I have decided to proceed with the proposals that I announced on 24 March, with the following modifications:

  • The Commissioners’ functions relating to the appointment and dismissal of statutory officers are expanded to include the role of Assistant Director Governance, Audit and Assurance. This modification is to reflect what was proposed in the Inspection Report and has been accepted by the Authority;
  • The Direction to the Council to consider and consult upon a new submission to the Local Government Boundary Commission for England (LGBCE), as part of the current boundary review, is clarified to include consideration of a proposal to reduce the number of Councillors to those consistent with elections on the basis of predominantly single member wards, that is single member wards across the whole Council area save where the LGBCE consider a multi member ward is essential to balance their statutory duties of delivering electoral equality, reflecting interests and identities of local communities, and of promoting effective and convenient local government. This modification is in response to the representations I received; and
  • As part of my intention to make an Order using my powers in the Local Government Act 2000 to achieve the fresh start the Authority requires by providing full Council elections from 2023, I am now setting out my intention that the Order specifically provides for:
  • Liverpool City Council to hold all-out elections every four years from 2023 and to adjust retirement dates for existing councillors accordingly;
  • Postponement for one year of the May 2022 elections of one third of Liverpool City councillors and extend terms of office accordingly; and
  • The movement of the next election for Liverpool City’s mayor to 2023 from 2024 and shorten the term of office accordingly.

I am mindful that the lessons from past interventions suggest that once Commissioners are in post additional issues can arise[1]. I have therefore asked Commissioners to specifically have regard to:

  • the Council’s LGBCE submission;
  • the Council’s governance referendum;
  • the financial position of the Council; and
  • broader service delivery insofar as they raise concerns for the Council’s wider improvement journey.

I will write to the Lead Commissioner asking him to provide assurance to me on these issues as well as to work with and support the Council to minimise the risk of further intervention.

Rational for whole council elections in Liverpool City Council

These modifications will help address the Inspection Report recommendation of ensuring as much stability as possible during a period of significant change. Going forward, the city mayoral and council elections will take place in the same year every four years. The Order will be subject to the negative resolution procedure and will be made as soon as practicable and well in advance of the local government elections currently scheduled for 2022. Following the making of the Order, the independent Local Government Boundary Commission for England will be able to undertake their electoral review, with its necessary legislation, subject to Parliamentary approval.

My decision to make an Order providing for Liverpool City Council to have whole council elections reflects not only the recommendations in the Best Value Inspection Report but also our past experience of the merits of whole council elections. The absence of such elections is often a consistent feature of under-performing councils and a common thread through many council interventions[2]. I of course recognise that there are many excellent councillors up and down the country performing their duties effectively with elections by thirds or other patterns. But holding elections three years out of four, or every other year, risks creating a culture of perpetual electioneering in a council where there is little focus on the strategic, an inability to address longer term challenges and leadership which can lack the stability needed for a high performing authority.

In contrast, holding whole council elections every fourth year can facilitate stable, strategic local leadership, delivering a clear programme for which it can be held to account by the electorate, and having the time to tackle some of the longer term issues its communities might face. Whole council elections can thus add a higher degree of accountability, and the stability they can bring can help effective partnership working and give greater confidence to the business community in their dealings with the council. Whole council elections are also more cost effective than holding elections say three years out of four, and hence I am clear they represent better value for money for local taxpayers.

Accordingly, for all these reasons I would like to take this opportunity strongly to urge all those councils still not holding whole council elections to consider using the powers which Parliament has given them to switch to such elections. I believe this could lead to councils providing stronger, more accountable local leadership better able to serve their communities, promote local economic growth, and drive forward the levelling up of opportunity and prosperity across the country. If councils which still elect by thirds or halves now take the opportunity to switch to whole council elections, this could significantly strengthen local government and its ability to serve local people. It is an opportunity I hope all other councils will take in due course.

Appointing Commissioners for Liverpool City Council

I have decided to appoint four Commissioners forming a team with a proven record in adherence to the rule of law, leadership and delivering cultural change, together with specific expertise relevant to their functions:

  • Mike Cunningham QPM (Lead Commissioner) – Has been involved in policing for more than 30 years, most recently as Chief Executive of the College of Policing from 2018 – 2020, the standards setting body for policing in England and Wales. Formerly one of Her Majesty’s Inspectors of Constabulary, inspecting forces in the north of England and Northern Ireland, and the national lead inspector for the development and implementation of inspections into police efficiency, legitimacy and leadership, and Chief Constable of Staffordshire Police.
  • Joanna Killian (Local Government Improvement Commissioner) – Has more than 30 years of experience in the public sector delivering transformational change and service improvement. Since March 2018 she has been Chief Executive of Surrey County Council. Prior to this Joanna worked at KPMG and was also Chief Executive of Essex County Council for 9 years.
  • Neil Gibson (Highways Commissioner) – Former Executive Director of Transport Economy and Environment for Buckinghamshire County Council, where he also acted for a time as Interim Chief Executive. A Fellow of the Chartered Institute of Highways and Transportation and former President of the Association of Directors of Environment, Economy, Planning and Transport.
  • Deborah McLaughlin (Regeneration Commissioner) – Extensive experience working in Regeneration and Housing for over 30 years across public and private sectors, including as Director of Housing at Manchester City Council, regional director for the North West at Homes England and Director of Capita’s real estate business. Also worked at the Audit Commission as a Best Value Inspector and auditor.

The Commissioners have been appointed for the period from 10 June 2021 to 9 June 2024 or such earlier or later time as I determine. I am clear that the Directions should operate for as long, and only as long, and only in the form, as necessary.

I want to be clear that most decisions will continue to be made by the Council; the intention being that Commissioners will only use their powers as a last resort if they are dissatisfied with the Council’s improvement processes.

The Government will continue to work closely with the political, the business and the cultural leadership of the city and with the wider region, including with Steve Rotheram, the Mayor of the Liverpool City Region.

Conclusion

We will do all that we can to support Liverpool, as it recovers from the COVID-19 pandemic, and to give confidence to those who want to invest in the city to contract with the Council, and to do business in the city.

I have published the Directions and Explanatory Memorandum associated with this announcement on https://www.gov.uk/government/collections/inspection-into-the-governance-of-liverpool-city-council.

[1] https://www.gov.uk/government/publications/addressing-cultural-and-governance-failings-in-local-authorities-lessons-from-recent-interventions

[2] https://www.gov.uk/government/publications/addressing-cultural-and-governance-failings-in-local-authorities-lessons-from-recent-interventions

Linked statements

This statement has also been made in the House of Lords

Ministry of Housing, Communities and Local Government
Local Government Update
Lord Greenhalgh
Minister of State for Building Safety and Communities
Conservative, Life peer
Statement made 10 June 2021
HLWS80
Lords