Lib Dem questions and proposals to deal with the Crisis in Liverpool Council’s finances

Liverpool’s ‘Babes in the Woods’ Labour Cabinet have morphed into the ‘Lost in the Woods’ Cabinet as they fail to grapple with the key issues facing our City. (photo – Liverpool Echo)

Another week – another crisis at Labour controlled Liverpool City Council. A total failure of the Council to do what every householder has done – to seek a good electricity tariff whilst costs soar – means huge problems for the Council’s budgets but also for the schools and Merseyside Fire Service for whom the Council also procure electricity and gas.

Liberal Democrats are doing two things in the short term:

  1. Asking the right questions. We have asked the Commissioners for advice on two issues. Was the council’s budget set in March legal, given that vital information as withheld from the Council in the run up to budget setting and asking “should the people who line of control for procurement be put on gardening leave while an independent enquiry in the fiasco takes place?”
  • Making clear proposals to beef up the supervision of the vital Strategic Improvement Programme by introducing an all-Party advisory panel and a series of other measures including:
    • the creation of an improvements advisory panel composed of the Mayor, Deputy Mayor and the 4 opposition Group Leaders to take a top-level review on the progress of the Improvement Plan.
    • The merger of the Finance and Mayoral Performance Committees to look at key performance indicators and the spend levels departments across the Council.
    • An immediate review of the procurement functions of the Council and bringing forward immediate steps to buy in purchasing capacity before appointing a new Head of Purchasing and the development of a new team.
    • All scrutiny committees being chaired by an opposition member.

This what I have asked the Commissioners on behalf of the Lib Dems:

“I am seeking advice on what has happened within the Council and the validity of the Council’s budget.

It is now clear, even without the detailed report that has been asked for, that the Council, somewhere, knew in advance about the failure to procure a contract for electricity. Not belief because there was reference to this at a Cabinet meeting in May although Cabinet Members clearly did not understand what was happening. In fact, they didn’t appear to know the significance of the report until it was publicly pointed out to them by the Chief Executive at the Cabinet last week. All this has blown a huge hole in our budget for this year of £5 million.

Labour should have realised how urgent the need was to ensure proper professionalism in the procurement part of the Council after the £9.5 million overspend on the Lime Street and Stand movement strategy.

Had the full council known I think that a different budget would have been arrived at. To put this in perspective £5 million is more than we picked up from the 1.9% council tax increase outside the social care precept. Or to put it another way it is 50% of the increase in reserves that was agreed of £10 million. We will now have to raid those reserves for this year to pay for the increase and will then have to find £15 million of savings next year to both put the reserves back in shape and add the additional £10 million that CIPFA are suggesting.

On that basis I need to ask you two questions:

  1. Was our budget lawful or do we need to somehow hold a special budget council meeting to introduce a new budget although we are already 1.5 months into this financial year?
  • Given that an external and independent review of the debacle is being undertaken should those in the chain of command for this decision, particularly those that kept the full facts from Members, be asked to leave the council on ‘gardening leave’ whilst the review is urgently carried out.

You will be aware from your conversation with Cllr Kris Brown that he is asking for an early meeting of the Audit Committee to bring these matters to a head urgently but advice from The Ministry via yourselves would be of help in the interim”.

On the wider issues it is clear that there is a complete failure of the Labour Cabinet to priorities their actions. This appalling mess that the Council is in illustrates why the Mayoral model is so bad. There is no point in calling for the Mayor to resign when if she did this would cause a costly by-election for a post that we might well be abolishing next year. I certainly believe that the Deputy Mayor responsible for finance, Cllr Jane Corbett, should resign and take political responsibility for this costly mess. Others, if not all, members of the Cabinet at all levels should also consider their position.

The “babes in the woods” Cabinet is rapidly becoming the ‘lost in the woods’ Cabinet. They cannot see the wood for the trees and cannot find a logical path to bring light into the murky parts of the Council which urgently need reform. There are three key priority areas:

  • Getting the financial functions right and abolish waste.
  • Tackling the failure of adult social care to support people in their own homes and communities leading to a huge rise in costs and poor outcomes for our handicapped and elderly residents.
  • Dealing with the problems of children in care which is blighting lives and costing a fortune.

Labour needs to be focusing on these issues with laser like precision. They cannot keep blaming Joe Anderson and his team for the things that are happening on the watch of Joanne Anderson and her team.

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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