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Liverpool Echo
Liverpool Echo
Liam Thorp

Worried Liverpool prepares for life under the 'direct rule' of government

For a city like Liverpool, the idea of direct rule by the Conservative government is beyond unpalatable.

But that is the reality for this proud, passionate and deeply political city as it faces up to an expanded Whitehall intervention that will see a team of unelected commissioners handed powers over the day-to-day running of city life.

This week's announcement of what is an effective full takeover of the city council was not unexpected, but it is of course deeply unwelcome. Returning Levelling Up Secretary Michael Gove confirmed that a new Finance Commissioner - Stephen Hughes - will joint the team of four that already sit in the Cunard Building and confirmed the group will now have over-arching powers for the council's budget, governance and recruitment.

A number of documents were published as part of this announcement, but in one particular annex of a report, the stark reality of how much power this struggling council has now had to give up was revealed.

READ MORE: Government confirms expanded takeover of Liverpool City Council

The document explained that the commissioners will now have "the power to amend budgets where commissioners consider that those budgets constitute a risk to the authority’s ability to fulfil its best value duty." It adds that the commissioners will also be able to "provide advice and challenge to the authority in the setting of annual budget and a robust medium term financial strategy."

There is no more important task that a city council has than setting its budget. This process has been made intensely more difficult over the past decade for cities like Liverpool as vast swathes of its funding power has been withdrawn from central government.

The council has already begun the demoralising process of setting out potential budget options for next year and things look beyond bleak. Mayor Joanne Anderson recently described the city's position as "dreadful and untenable" with a further £73m of cuts to find that will take the city's losses since 2010 past the half a billion pound mark.

While most will agree the age of austerity has been the biggest hammer blow to Liverpool Council's finances since 2010, there has been plenty of vital cash lost locally as well.

Max Caller's damning inspection report last year painted a grim picture in which tens of millions of pounds were wasted on poor decisions, bad investments and shoddy financial management over a period of years. And the costs of cleaning up those problems and culture that pervaded the local authority continues to cost taxpayers every single day.

Mr Hughes will be paid £1,100 a day during his time in Liverpool, this along with the similar fees paid to the rest of the commissioners, their expenses, and significant other costs related to the intervention will be paid for by the taxpayers of Liverpool.

But despite the major figures castigated in Max Caller's report having left the council, costly problems have continued. Earlier this year it was revealed that a series of calamitous blunders with the local authority's energy contracts could cost ratepayers and additional £16m and add huge financial burdens onto city schools and the local fire service.

Opposition leader and Lib Dem boss Cllr Richard Kemp said: "The council has around £70m to try and cut in the next year, but when you look at the potential costs caused by the Labour group they make a big chunk of that. There is the £16m energy debacle, £2m a year for the commissioners being here and interest payments for the Lime Street mess we are looking at a lot of money."

Other opposition leaders are even more explicit in their criticisms of the ruling Labour group. Reacting to the news of the further intervention this week, Liberal boss Steve Radford said: "This is the Capital of Chaos has utterly failed the City. The Mayor should resign. We need an emergency All- Party administration to pull the City back from the brink of bankruptcy."

Green leader Tom Crone was unequivocal about the reasons the council now finds itself with Conservative-led overlords. He said: "Years of Labour incompetence, dodgy dealing and in-fighting has dragged the city into the mire of Tory rule. The only thing worse than this Labour shambles is the vile Tories who are now taking over through their appointed Commissioners.

"Labour's has plunged the city into crisis and opened the door to the Tories running a city where they have no democratic mandate at all. If Labour had a shred of decency, it would sit down with all the other parties elected to the council and work together to get the Tory commissioners out as soon as possible and restore democracy to Liverpool."

For her part, Mayor Anderson says she and her cabinet team "know their duties" with regards to the budget, regardless of a Finance Commissioner now overseeing their work. She said: "We have been working hard on setting the budget for 2023/24 long before this new commissioner was announced and we are already nearing the final stages."

Set to leave the council in May when her mayoral position ceases to exist, the setting of next year's budget will be one of her final acts in post. She will resent the idea of commissioners stepping in to amend any of these difficult decisions.

She added: "Whilst acknowledging that the new Finance Commissioner has additional powers, we do not believe it will be necessary to use them. Over the intervention period the commissioners have refrained from using their powers and I expect this way of working to remain unchanged. Our main focus is protecting as many services as possible, supporting the most vulnerable and challenging this government about the economic chaos they have caused."

But what of that budget? What is actually left to cut? The council will come forward with a range of budget options this week and as one insider said "all of them are bad." That's the reality for a local authority after ten years of brutal government cuts that is still paying for the mistakes and misjudgements of its previous leaders.

One worried councillor this week said they feared for "all non-statutory services", with fears that services like children's centres and libraries could be at risk.

Cllr Kemp said one of the biggest worries for him is around the crucial services that many people don't see on a day-to-day basis. Adults and Children's social care makes up a whopping 70% of the council's budget and like many councils, Liverpool is struggling with growing demands and withering resources.

Cllr Kemp said he felt both departments had suffered from a "lack of political and in part managerial leadership", adding: "Turning these two departments round will take time. There is a poor culture in both of them which fails to look proactively at stopping problems happening. Instead, they continually apply their attention to problems which are happening."

Whatever the council does decide to cut or save as it tries to find another £73m worth of cuts over the next year, the harsh reality is that at any point the team of commissioners could step in and change those decisions.

For University of Liverpool politics professor Jon Tonge, the fact that these powers have been awarded with little explanation or justification is a problem.

He said: "Liverpool is under direct rule from the Conservatives now, even though there hasn't been a Conservative councillor elected in the city for almost three decades. You've got the most direct control of any council anywhere in the UK by central government, as a consequence of commissioners running the city.

"There's no sign of them leaving either. The initial assumption was that this would be a three year fix and they would ride out of town. The hope was that they would leave Liverpool earlier than the three years, that was the maximum. But there is currently no end in sight. They are supposed to leave in June 2024 but the way things are it will be a minor miracle if they do."

"What was frustrating and disappointing from the government this week was that there was no clarity given as to why these extra interventions were necessary. While one may agree or disagree with the original intervention under Robert Jenrick, at least it was fully explained why the government was sending commissioners to the city.

"The bolstering of those commissioner's powers, which is essentially to cover everything, came with no explanation as to where the council had improved or failed. The people of Liverpool are entitled to an explanation as to why this is happening given that it does ride a coach and horses through local democracy.

Describing the new powers as "draconian", Professor Tonge added: "You can be very critical of how the council has been run in the past, you may think commissioners are necessary, but I think it does have to be justified rather than just a central diktat.

"The commissioners effectively has a veto over the budget and council finances, they have a veto over appointments and they are essentially putting senior figures like the interim chief executive on report. That is wholesale intervention - it is ironic that the Levelling Up Secretary has done this when he has really levelled down democracy in Liverpool.

"It's bad enough cutting £73m from a budget if you are a democratically elected local councillor, it is a lot worse if you are an unelected commissioner coming to act as budget executioner, as it were. The council may take the decisions but the commissioners can amend it was they wish.

"I think most people accepted the initial intervention, they accepted that there had been malpractice and a culture of bullying at the council, it was a damning report and an acceptance that something had to be done. But rather than moving towards the end game we seem to be deeper into commissioner-land and that's a big concern."


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