Further failings at the heart of Liverpool Council could cost the troubled local authority millions of pounds.
Weeks after the revelations around the council's energy contract disaster, a report to its cabinet to be discussed next week and seen by the ECHO has identified 12 contracts in need of immediate renewal that have either run out or are in danger of doing so. Renewing or extending the contracts could set the cash-strapped council back around £20 million.
The report was commissioned following the council's well-documented energy contract bungle and a review of all procurements across the council which has found a startling amount of gaps. Of the dozen contracts to be discussed next Friday, five have expired already.
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Sources told the ECHO that a meeting of scrutiny committee chairs to discuss the contracts was conducted in a “horrible” mood with some members and officers said to be close to or in tears. Among the expired terms is community based help for people at risk of homelessness, supporting more than 1,000 households.
A five-year contract worth £8m expired in December 2020. The scheme has managed to continue as the council is legally obliged to support vulnerable people and bringing an end to the service would leave 300 people at risk of homelessness.
Formalising a new contract to June 2023 is expected to cost a further £1.5m. More than a quarter of a million pounds is also being spent to ensure services at Liverpool Cruise Terminal can continue after the existing £1.15m agreement from 2019 ran out almost three months ago.
Like with the homelessness support, provider Southampton Cargo Handling, has continued to work in the interim since the expiration of the previous contract in March. The report said that there are “no immediate alternative options that would avoid the suspension of cruise operations at Liverpool Cruise Terminal if the formalisation of this extension is not approved.”
This would cause “potentially irreparable reputational damage with cruise line customers, immediate loss of income and immediate requirement to stand down subcontracted labour.” A further £1.6m is to be spent extending the £25m contract with We Are With You to provide community based drug and alcohol treatment until March next year but could rise up to as much as £3m.
As with a number of the procurement exercises that have expired, it is said the “the late decisions in this report compromises the council’s ability to assure best value.” The report said “in a large number of service areas over a number of years, the council has not procured services to deliver best value and in some cases without the minimum legal compliance.
It added: “These issues have been long standing in a number of areas. To some extent, the pandemic caused understandable delay but this cannot explain the full extent of the failings.”
The report said that the “failure of services to properly plan and procure these contracts has created significant risk to the council” and it is unlikely that they will be fully resolved, nor deliver best value for the authority.
A further seven contracts are on the brink of expiration in the immediate future, with almost £4m needing to be spent by Sunday to provide a 12-month extension to a near £16m contract to provide temporary accommodation and support for vulnerable single homeless households across the city.
Stopping the service would leave almost 450 people homeless and in need of immediate support to prevent rough sleeping. An additional £5.25m is expected to be spent on a two-year extension to a £16m agreement with Carlisle Security Services, due to expire in two months time.
The firm provides security at some of the city’s most high profile venues at risk of arson or damage, like St George’s Hall, but the council is not obliged to seek such a contract. The management of the council’s contracts, which has already been questioned by the government appointed commissioners, was met with scorn by Cllr Kris Brown, Liberal Democrat chair of the council’s audit committee.
He said: “Words can’t describe how bad this blasé approach to contract renewal is. The Labour Party should hang their heads in shame.
“We’re talking contracts here that impact on the most vulnerable in our city - such as children and homeless people. Contracts that if not renewed would have impacted our statutory and legal responsibilities as a local authority.
“That’s before we get into whether any of these contracts are value for money.” Cllr Brown said regular assurances over the council’s business were needed and questioned if the local authority was too big to change.
He added: “Liverpool council is in the last chance saloon now. If political leadership isn’t shown soon by the beleaguered Labour Party then I fear we’ll see further commissioner intervention.
“I know there are some good officers in this council that have gone out of their way to put in new processes and take due diligence seriously, however it’s the culture that needs to change, and change soon. We have this governance consultation about whether we have the mayor, but I’m starting to wonder whether the real governance question is whether Liverpool Council as an authority needs changing. Maybe it’s too big to make the culture change needed?”
The full report, which will be discussed at next Friday's cabinet meeting, is another blow for the under-pressure council, which is awaiting the results of an independent investigation into the electricity contract disaster.
The council is also waiting to see the latest report from the government commissioners installed at the Cunard Building, with speculation that further intervention will be ordered.
