The Secrecy that is Stifling Democracy in Liverpool

Labour Rose

Last week the Council agreed a major report which transferred control of hundreds of staff and millions of pounds of assets and running costs from a joint venture to the direct control of the council. You would expect that as this is a major action there would be a full, comprehensive and lengthy report on this matter. Well perhaps there is but I have to tell you that I do not know because neither I nor any other councillor has seen the report.
What I have seen is a 4 page poorly written report from our officers with as back up a further 4 page report from KPMG who had been appointed to ‘oversee the process.’ Some answers were provided at the Mayoral Select Committee but it was like drawing teeth without an anaesthetic! The fact is that the Lib Dems, Liberal and Green Parties were not satisfied with what we had seen and what we were being told and supported an amendment that I moved that the meeting be adjourned to allow representation from KPMG so that we could ask them questions directly. No chance! Crucially no member of the Cabinet with the possible exception of the Mayor had seen the full ‘due diligence’ report – apparently not one of them had asked for it.
As an elected member I have no idea about the detail of what is going on. Liverpool Council corporately is a shareholder in the joint venture. When I asked how I exercised my rights as one of the 90 shareholders I was told that those rights had already been exercised by officers. So apparently bureaucrats now take precedence over those of us who bother to go out and ask for votes.
One interesting issue is how we will treat the potential redundancy, voluntary or otherwise, of one individual. I did not ask how much that individual would be paid I simply wanted details of how the potential redundancy payment would be calculated as I have been repeatedly told that we did not know the pension or salary arrangements of this individual because he was being paid by the Joint Venture. As a councillor this information was denied to me which means that a payment of £500,000 or more than a £1 for every resident of Liverpool could be paid out without members and the public even knowing the basis on which the payment might be made.
Interestingly we were told that the reason that we could not see the KPMG report was that the writers of the report were insisting on ‘commercial confidentiality’.
Here is where we see an interesting parallel because it is the second major report where apparently the consultants have insisted that their report should be dealt with in this way. The first is, of course the one relating to Cunard Building. Four weeks ago I wrote to a senior officer and asked not to see a copy of the report but copies of the contract or exchange of letters which established the work which showed that such a request had been made. In response I got a terse letter saying that I was challenging the integrity of officers. When I replied that I still wanted the information I was told, two weeks later, that I could not have a copy of the report which is commercially confidential. I knew that already and had not been asking for it. I still want to know why this report is confidential and have also asked why the Mayor was allowed to make public a key part of that report which no-one else could see.
In the UK it is standard practice that any consultants’ report becomes the property of the person or organisation that commissioned it. The Cunard report was undertaken by a Dutch company. So I checked with the Dutch LGA and that is the same practice in Holland as well. So we have two reports where it is claimed that commercial confidentiality is applied by the people doing the work but I have yet to receive proof of this in the case of one of them (neither has the Liverpool Echo).
I accept the principle of commercial confidentiality and willingly accept that parts of both the reports I am talking about should not be revealed. But the majority of both these reports should be available for councillors to scrutinise on behalf of the people that paid for them – the people of Liverpool.
This is just another example of what is going wrong in Liverpool. Basic information is kept from the people of Liverpool by restrictive reports and by the total failure of the 78 Labour councillors to hold their Mayor to account. Whether they are scared of him; are hoping for financial preferment; or genuinely believe that the Mayor walks on water I do not know. I do know that for whatever reasons they are not doing the job that they are being paid for.
I have been around a long time and remember the City Council in the 90’s when this sort of behaviour was manifest whilst Liverpool had a council tax 20% higher than the next council and our delivery of services were the third worst in England. I became part of a team that undertook two Corporate Government Inspections in two of the worst councils in England – Walsall and Rotherham. What is happening in Liverpool is reminiscent of all those three sets of circumstances. It’s hardly surprising that on two occasions in the last cycle of meetings an attempt by opposition groups to have a proper bench-marked performance management system in place within the Council was knocked back.
Today I will do what I can within the law to get to the facts. I am submitting an FOI request to my own council to try and get to the bottom of how ‘commercial confidentiality’ could be applied so rigorously to reports the generality of which should be available to taxpayers.
Sad isn’t it that I have to go to such lengths!?


About richardkemp

Leader of the Liberal Democrats in Liverpool. Deputy Chair and Lib Dem Spokesperson on the LGA Community Wellbeing Board. Married to the lovely Cllr Erica Kemp CBE with three children and four grandchildren.
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7 Responses to The Secrecy that is Stifling Democracy in Liverpool

  1. joedd says:

    The Dark Arts of Liverpool Labour Council….. remember via the ballot box 2015/16

    • Catherine says:

      Yes. It would be great to see all the opposition parties burying their differences and pooling their resources temporarily, to selectively target some of the Labour sheep in April. The enemy of my enemy etc etc.

  2. Catherine says:

    I honestly think that you should go to even greater lengths, and specifically:
    get some proper external advice on the legality of the approval process for the LDL negotiations. Especially the point about officers exercising your rights as a shareholder. And the fact that Joe Anderson, as a director of the company, has a conflict of interest and cannot act on behalf of the council in this matter. The governance arrangements are set out in the JVA, as well, of course, as the Companies Act, so it is simply not possible to give this kind of unfettered mandate to officers. You have the standing, and access to the resources (I assume) to do this. There are all sorts of other things that should be looked at too, but this one issue is fairly narrow, and shouldn’t cost too much. It also has massive financial implications and is really urgent;
    you could then refer the whole thing to Eric Pickles – without waiting for the kind of publicity that prompted his investigation of Tower Hamlets. As I’ve stated previously, I and the other people who have collected info on LDL and its dealings with the Council will be happy to supply hard evidence. Surely this too is something that you have the standing and contacts to do.
    the final thing is a cheeky suggestion: I was pleased to read today that you and the other opposition parties are submitting a joint resolution about the building on greenspace issue, but could you not also agree to work together on the broader and more urgent issue of Council governance. And specifically the decision-making powers that senior officers now appear to have, the over-reliance on commercial confidentiality to hide what is actually happening, and the refusal to allow any proper scrutiny.

    However, the charge that you are challenging the integrity of officers is ridiculous, also because surely one of the primary duties of elected councillors is to scrutinise the decisions and spending of people who are employed by us and paid by us. And it is likely to be trotted out again in a few weeks time, as I submitted a request for documentation substantiating the assertion that KPMG wanted to maintain their report confidential last week. I will pursue this, and will win, because the whole point of FOI, and the thrust of the Coalition government’s initiative for transparency, is to empower ordinary people to allow them to hold publicly funded organisations of any kind to account.
    There clearly is an issue about integrity/competence, it doesn’t matter which. Quite apart from Fitzgerald and his reticence and selective memory about Rotherham (which in itself calls his integrity into question) there has clearly been some very poor legal advise. You probably haven’t waded through all our FOI requests on LDL, and so may not be aware that one of the questions that went to the Information Commissioner was about external advice to confirm that the risk of having to pay massive sums to LDL if the Council terminated the contract, repeatedly used as an excuse to accept the refresh proposal (do you remember Joe Anderson responding to a question on this during one of the Mayoral election debates with the figure of over £100 million??). We assumed (wrongly) that a prudent city solicitor would get specialist legal advice about this – i.e. would they actually be able to substantiate a claim for this kind of money. After months of procrastination, the Council finally told the Information Commissioner that the assistant city solicitor dealing with the refresh decided she didn’t need to get any external advice, after a 15 minute chat with a legal colleague (not paid for, and therefore not binding advice). The Information Commissioner’s eventual decision that the Council really did not hold any information on this point makes absolutely clear that they were shocked and surprised at this modus operandi. The decision is on the Information Commissioner’s website, and on whatdotheyknow. Please read it. This alone raises serious questions about competence.

  3. Jenny Griffin says:

    Richard, there are some citizens out there who have become proper ‘anoraks’ on this subject – I hope Catherine will take it as a compliment when I say that she’s the undisputed Queen of the LDL Anoraks.

    It would certainly be worth a couple of hours of your time to pick Catherine’s brain (and, to a lesser extent, mine) on what has been unearthed to date. It’s truly shocking, but I know you appreciate that.

    • richardkemp says:

      Hi, happy to meet up with you and Catherine. E-mail me on and let’s sort something out. My problem is that this is very complex and I am fighting on many fronts! All help accepted!

    • Catherine says:

      Thanks… I think!
      I should explain that my “anorak-ness” is stimulated (if that’s the right word) at least once a month, because of what I do (I spend most of my working life translating confidential board papers, including in-depth financial stuff, sensitive legal disputes, corporate governance policies and issues (amendments to articles transactions with related parties, senior management bonus schemes, etc. etc.).
      So I constantly see how things are supposed to work, the information that directors require to do their job, the kind of questions they ask, etc. etc. And then I think about all this…

  4. Catherine says:

    The day after this meeting, I submitted an FOI to obtain the documentation on which Mr. Anderson based his claim that he couldn’t release the report because KPMG insisted it remain confidential. I got the response today. As many people suspected, it is merely the standard clause about commercial confidentiality that KPMG and similar consultants use. And it specifically states that 1) the confidentiality obligation shall not apply to information which the Council is required to disclose as a matter of law or in discharge of its obligations of public accountability (such as to a Mayoral Select Committee!!) and 2) specifically, at the end, that IT CANNOT BE USED TO PRECLUDE DISCLOSURE UNDER FOI.
    So, what Joe Anderson, who is a director of LDL as well as Mayor, told the Committee is not true.
    Which means he either told a deliberate lie, or was told one by someone else, and didn’t bother to actually read the report. And if Ged Fitzgerald (also a director of LDL until very recently) backed up the assertion that commercial confidentiality applied then he was deliberately misrepresenting the situation – or a liar, to put it bluntl
    Here’s an extract of the relevant bit. The question and full response are here:

    “Liverpool City Council holds the information requested and can confirm the following:

    In response to your request please find below extract from the relevant contract between the City Council and KPMG which was discussed at the Mayoral Select Committee of the 29 October 2014:

    11.1 The parties shall keep secret and not disclose and shall procure that their employees and use reasonable endeavours to procure that any subcontractors keep secret and do not disclose any information of a confidential nature obtained by them by reason of this Agreement. This obligation shall not apply to information:

    11.1.1 which is in the public domain or is trivial or cannot reasonably be considered to be confidential; or

    11.1.2 which the Council is required to disclose as a matter of law or in discharge of its obligations of public accountability and freedom of information.

    11.4 Any written advice or final written report released to the Council in any form or medium shall be supplied by the Provider on the basis that it is for the Council’s benefit and information only. Any product of the services will be prepared on the basis that it is not intended to be copied, referred to or disclosed, in whole (save for the Council’s own internal purposes) or in part. The Provider hereby consents to the Council copying and distributing (entirely at the Council’s discretion and risk) any product of the Services but not the Provider’s name or the Provider’s trade-marks. The Council shall not quote the Provider’s name or reproduce the Provider’s trade-marks in any form or medium without the Provider’s prior written consent. The Council may disclose in whole any product of the Services to the Council’s legal and other professional advisers for the purposes of the Council seeking advice in relation to the Services, provided that when doing so the Council informs them that a) disclosure by them (save for their own internal purposes or as required by law or regulation) is not permitted without the Provider’s prior written consent, and b) to the fullest extent permitted by law the Provider accepts no responsibility or liability to them in connection with the Services. This condition shall not prevent the Council making any disclosure that may be required by law, or by a competent regulatory authority, although the Council shall use all reasonable endeavours to inform the Provider in advance of such disclosure. The Provider confirms that neither disclosure under the Freedom of Information Act 2000 (“the Act”) nor confirmation/ denial given to comply with section 1(1)(a) of the Act shall be precluded through exemption under section 41 of the Act solely as a consequence of this condition.”.

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