Liverpool: England’s worst local authority

Feb 7 2008 by David Bartlett, Liverpool Daily Post

THE poor state of Liverpool City Council’s finances today sees it named the worst local authority in the country – for the second time in weeks.

It comes as the Daily Post can reveal that former Culture Company chief executive Jason Harborow has made a complaint to a standards watchdog about the behaviour of council leader Warren Bradley and regenerat- ion leader Cllr Mike Storey.

Liverpool has been given a one-star rating, down from two, in the Audit Commission’s annual Comprehensive Performance Assessment (CPA), the most important annual ranking on the progress of councils.

Just one other council out of 149 in the country performed as badly – Rutland, in the East Midlands – but it was judged to be improving at a better rate than Liverpool, leaving the city with the worst result in England.

There was better news else-where as Sefton improved from three to four stars, while St Helens, Halton, Warrington, Cheshire and Lancashire all remained on four.

Wirral remained on two stars, and Knowsley was judged to be improving well, but its score is under review because the commission is still assessing its children and young people.

Opposition councillors in Liverpool said the latest report, the third to slam the council in the past month, was yet more evidence of political mismanage-ment and failure to take tough financial decisions in the past.

But the council said the city was “clearly not the worst” and its services had performed well.

The main factors are the council’s failure to plug a £20m hole in the Capital of Culture budget, lack of financial planning and low levels of reserves.

External experts are now to be drafted in to help Liverpool improve its governance and financial planning.

Last week, the Audit Commis-sion said the council was the worst in the country for the way it spent money, on the day it was revealed Mr Harborow had been given a £230,000 pay-off to leave the council.

In January, district auditor Tim Watkinson issued a stinging report into the council’s finances. He said he was concerned about the authority’s “weak” position and worried it could deteriorate in the short to medium term.

Another Commission report will be released this month into an inspection last year.

During the visit, inspectors found the standard of councillors’ behaviour was worse than in a “fledgling Eastern European democracy”.

Today’s report says Liverpool has continued to make improve-ments to many key services such as education and social care, while addressing poor recycling rates and the condition of hous-ing stock, which will be transfer-red to a social landlord, Liverpool Mutual Homes, in April.

But it also states: “Arrange-ments to challenge and secure value for money have not improv-ed sufficiently in the past year.

“There is a significant risk the council will not be able to main-tain adequate levels of improve-ment given the financial pressur-es it is facing, most notably, but not exclusively, meeting Capital of Culture funding commitments. The continuing weaknesses in the council’s governance are also a concern.”

The council is praised for its promotion of economic develop-ment through schemes like the Arena and Convention Centre, the Cruise Liner facility and retail improvements like Liver-pool One. Although it is given a score of “two” in culture, only libraries and leisure centres are included, not things like muse-ums and theatres which are not controlled by the authority.

The council scored three stars or above in a majority of categor-ies, but it was given a rating of one because of its “one” in use of resources – how it spends money.

A one is automatic if a council gets a poor result in use of re-sources, children and young people, or adult social care. Use of resources is considered of high importance because if the financ-es fail it could lead to a future deterioration in services.

The council is set to appoint an external panel to monitor and advise on an improvement pro-gramme – the Liverpool Strategic Improvement Partnership.

It will oversee an action plan put in place after the council was criticised by the district auditor.

Liverpool council chief execu-tive Colin Hilton said: “It is dis-appointing the rules of the Audit Commission’s star system, in particular around the use of resources, should effectively label Liverpool as one of the worst performers in the country, when that is clearly not the case.

“We are already taking measur-es to improve our performance in the use of resources, including introducing a new system for more effective management of the council’s assets.”

Cllr Bradley said: “I am very disappointed in the score Liverpool Council has received from the CPA.

“The European capital of culture year is putting pressure on our finances but we’re determined to make this special year a success.

“It is disappointing the star system rules should effectively label Liverpool as one of the worst performers in the country when that is not the case.”

The council now has until March 5, when it sets its budget for the next financial year, to say how it will pay for Capital of Culture.

Labour leader Cllr Joe Anderson said: “I am glad the council is heeding my advice to get external experts, because we have to start planning for the medium and long-term future of this city.

“I recall former council leader Mike Storey saying they would put this city at the top of the Premier League, the facts now reveal we are in the relegation zone.”

Government is still consider-ing a request to allow the council to borrow or sell buildings and land directly through a process known as capitalisation to plug the £20m hole.

Last month a back-up plan was revealed for the home of Liverpool’s Culture Company to be put into a charitable trust and sold to fund the shortfall, as a way around government rules.

OPINION: PAGE 10

davidbartlett