It would have been cheaper for the Council to knock these houses down and build new ones than to refurbish these properties which are still unoccupied.
At last week’s Audit Committee meeting the Committee discussed three items which had originally gone to Cabinet and which the Council’s Liberal Democrat Group believed needed looking at afresh. We did not do this just to rake over old coals or seek people to blame for what happened.
We did it because we are not yet satisfied that lessons have been learned from egregious past errors. We want to make sure that systems are rapidly put in place to ensure that taxpayer’s money is well used.
The three failures that we looked at were:
- The Festival Gardens debacle where remediation costs have soared, and it is likely that the remediated land will have little value for developers who will still need to provide extensive pilings for much of the site. This remediation will have cost a minimum of £60 million or £43,000 for each home put onto the site.
- The British Musical Experience where we have agreed to collect no rent for the Ground Floor of the property until at least April 2024. In fact, it would appear that the only rent paid to us by the BME had been from a grant which we had paid them in the first place!
- Tunstall Street where the Council will lose £1 million+ on the refurbishment of a row of terraces which are mostly still not occupied and where the site is racking up security costs of £7,000 a week.
At the committee looked each of these in turn. To begin with, however, I made it clear that the problems were not caused by our current officers but are a legacy of past poor performance and a past failure of managerial and political leadership. Indeed, we supported the actions proposed for each of these items some of which have already been enacted.
These three seem to be very different but in fact the problems with them, which cost city, city region and national taxpayers a fortune have much in common:
- Poor political judgement. Politicians are responsible for the development of strategies and the monitoring of the programmes which are developed to put those strategies into place. In each of these cases proper managerial decision making about potential delivery was ignored. Inexperienced politicians insisted on work taking place – we will all pay the price of that.
- Officers were either complicit in the faulty analysis of these issues or were unwilling to push back against undeliverable ideas. As I said at the Committee, “It is often the role of officers to push back against the fantasies of politicians”.
- There was little or no initial option appraisal before committing to a specific course of action. In the case of both the Festival Gardens site and Tunstall Street there were at least two alternative ways forward for the sites. No-one appears to have checked out these alternatives.
- There was insufficient attention paid to value for money at any stage. For example, it should have been absolutely clear from day one that the Tunstall Street decision should have been rescinded when tenders came in and it was clear that the renovation of the properties was going to costs more (£40,00 more) than the properties would be worth on completion.
- There was a lack of adequate reporting back between the officers responsible and other officers and between officers and the Council as whole. Money and time could have been saved if there had been reporting and decision-making roles put in place to rapidly deal with emerging problems.
The discussion was very muted. It seemed to more like a court room where I was counsel for the prosecution but there was no-one in the dock. Those who took the leadership in these poor decisions, both managerially and politically, have left the Council and new politicians and officers are trying to correct the errors of the past. The Labour members were strangely quiet. Perhaps this is because some of them supported the decisions in each of these cases in the first place.
We are now going to get a report to the March Audit Committee which will ensure that we have systems in place to deliver sound projects which are properly costed. Such a system must include:
- An initial options appraisal which outlines all the options for the council and looks at a simple cost benefit analysis for each option.
- Where appropriate the consultation of communities which will be affected by the changes that could be introduced into their areas.
- A review of projects when tenders for work are received to ensure that they match up to the approved costs of the project appraisal.
- A due diligence review of all partners or contractors to ensure that they have the capability and capacity to deal with the programmes.
- Regular reports back to officers, and if necessary, members to nip problems in the bud.
If we do these things we can begin to and continue to make decisions in a proper way which provide proper benefits for taxpayers cash. That does no always mean that we don’t choose to ‘lose’ money on a project by way of some sort of subsidy. I would have supported taxpayers cash being used at the Festival Gardens site up to, say, £15 million but not £60,000,000.
In cases like the three discussed here the issue is not whether the Council makes a profit or loss on the way forward but whether the taxpayers get value for money for the public sector expenditure proposed.
I see this report in March as being one more move forward in ensuring that the Council makes fact based decisions, and a competent way and in which those decisions are executed. Above all I want far more decision to be made public and to be consulted on with residents who know the area and its potential problems and pitfalls.
Liverpool is not yet where it needs to be in terms of the way it does business, but I am clear that they are going in the right direction. In this, as in all things, Liberal Democrat Councillors are putting forward practical solutions and proposals rather than just opposing for the sake of opposing.