Liverpool City Council is set to be partially controlled by government-appointed commissioners following a damning report.
Inspectors found a “serious breakdown of governance” and “multiple apparent failures”, local government secretary Robert Jenrick told Parliament.
The probe into the Labour-run city council began after a series of arrests for fraud, bribery, corruption and witness intimidation.
Then-mayor Joe Anderson was among those arrested.
Local government inspector Max Caller was called in to scrutinise the city council last December and found bullying, intimidation, “dubious” deals and “jobs for the boys”.
The authority, a Labour stronghold, will now have some of its functions taken from councillors and officers for the next three years and instead the Ministry for Housing, Communities and Local Government (MHCLG) will appoint commissioners, part of an “improvement plan”.
‘Deeply concerning picture’
One of the key stipulations is the council will be unable to spend cash on any property transactions without the formal consent of the commissioners.
Mr Jenrick said “many millions of pounds have been wasted” as the report was published.
Announcing commissioners were to be sent in, he told the House of Commons: “It paints a deeply concerning picture of mismanagement, the breakdown of scrutiny and accountability.
“A dysfunctional culture, putting the spending of public funds at risk and undermining the city’s economic development.”
Mr Anderson, who was held on suspicion of conspiracy to commit bribery and witness intimidation, has denied any wrongdoing.
Mr Caller’s scathing report begins: “Indeed, the position documented by the Inspection provides the best empirical evidence of Conquest’s Third Law of Politics ‘The behaviour of any bureaucratic organisation can best be understood by assuming that it is controlled by a secret cabal of its enemies’.”
No proper scrutiny
Inspectors focused on property management, regeneration, highways, contracts and planning at the council over the past five years, which has seen a building boom in Liverpool city centre.
They found no proper scrutiny or documentation on land, leasing and contract deals, that councillors awarded funding to an organisation where a fellow councillor worked and those given council land lease deals were “drawn from a very restricted pool”.
Documents were often destroyed and council officers had to “rescue case files from skips each morning”, and in the Regeneration department, “the only way to survive was to do what was requested without asking too many questions or applying normal professional standards”.
The report said the council ethics or standards committee last held a meeting nine years ago.
An ‘outrageous and politically corrupt’ front to democracy
Liverpool being run remotely from London via commissioners appointed by a Conservative government will not be thought popular in the city, which was last controlled by the Tories in 1972, which lost its last Tory MP 38 years ago and has not had a Tory councillor elected since 1998.
Earlier, Derek Hatton, who was a member of Labour’s militant faction and deputy mayor of the city council in the 1980s, said on Twitter: “Today could see the most outrageous and politically corrupt front to local democracy any of (us) have ever witnessed.
“Even in the 80s Thatcher stopped short of imposing commissioners….”
However shadow communities secretary Steve Reed said that it was not a “Tory takeover” of Liverpool and Labour supported the Government moves.
He told the Commons: “Labour, both here and our leadership at the city council, accept this report in full.
“The council will respond to (Mr Jenrick’s) letter in detail but we support his intention to appoint commissioners, not at this stage to run the council, as he says, but to advise and support elected representatives in strengthening the council’s systems.”
Mr Caller’s report also calls for a review of the council’s democratic arrangements, with fewer elections and fewer councillors.
The city council has a month to make representations but said it accepts the report as part of its, “journey of improvement”.