Council Capers

Now we have the mayor for Liverpool being interviewed by the police under caution, in relation to the ongoing saga of Liverpool Direct and its rotten Lancashire counterpart. This is the same issue which led directly to the suspension of Liverpool Council’s chief executive, Ged Fitzgerald. He has also been interviewed under caution on the same issue. Logically, one might suppose that, by the same criterion, the mayor should now be suspended himself. Who, however, would exercise that suspension? Would he suspend himself? In the Alice-in-Wonderland world of the Cunard Building, nothing appears to be impossible.

This is an extremely serious situation. The mayor and his chief executive are both embroiled in these heavy police enquiries, potentially facing charges. Meanwhile, a rudderless council executive arm is not only minus its head of paid service, it is still without a senior planning officer and without a director of finance. The loss of the director of finance – Becky Hellard – is more problematic than a missing mayor or absentee chief executive. She is, after all, the Section 151 monitoring officer under the Local Government and Housing Act of 1989.

The powers and responsibilities of such a monitoring officer are extensive, and set out in detail under section 25 of the Local Government Act of 2003. For example, the monitoring officer must approve budgetary estimates and reserves. In the case of Liverpool, who will fulfil this function, given that the designated officer has taken gardening leave because, it is said, that down the line, she may be a prosecution witness if charges are brought against her current superiors?

Councillors should take particular stock of this farcical situation as they could well be left in a dire legal predicament. The Accounts and Audit Regulations of 2011 are clear in establishing the responsibility of elected members for maintaining “a sound system of internal control including arrangements for the management of risk”. There is no ambiguity about the legal duties of councillors. They cannot, for example, plead ignorance if there was anything untoward in the accounts presented by the council. Of course, in normal circumstances, there would be the monitoring officer to provide guidance where it was required. Currently, there is no one filling that role.

Remember, too, that under section 15 of the Local Government Act of 1999, the Secretary of State has wide powers to intervene in a council in breach of section 151 requirements, including the power to send in commissioners. It just might also be politically expedient in such circumstances for a Conservative Secretary of State to do so with a Labour council, especially in the run-up to local elections.

There are lessons in the tragi-comic conduct of Liverpool Council in recent years from which we can all learn. What elected councillors ought not to do is to bury their heads in the sand over such problematic issues as Section 151 demands. In the case of Liverpool, they ought to gather their collective wits, to address – and, perhaps, remedy – a rapidly deteriorating state of affairs.


Political Realities

I do not know if any of our local council leaders were signatories to the round-robin letter of protest sent to Labour’s National Executive Committee last week. Apparently, it was the view of those leaders that Labour’s NEC should butt out of Haringey’s Labour council’s plan to outsource a huge chunk of the council’s responsibilities.

It is understandable that council leaders would want to protect their freedom to act in accord with their local needs. However, this particular spat smells more of a reaction of “traditional” Labour to their perception of a Momentum-inspired undermining of local government autonomy.

Too often, it appears to be the case that different arms of different parties, forget – in their rivalry – that their primary purpose is to serve the interests of the electorate. It is not to pursue their own particular ideology, other than that endorsed at an election. Nor is electoral success carte blanche to exercise power and authority, either for one’s own interests, or those of any sectoral entity.

With those thoughts in mind, I was struck by several news reports during the last week. First, there was the refusal of planning permission for Igas to “frack” on Peel land in Ellesmere Port. This was a popular decision in the area. It is over ten years since Peel agreed to Igas drilling on any of their land in the north west of England. Barton Moss where their partnership began became a battleground and no-one wanted a repeat of that. In the case of Ellesmere Port, sensible local government properly reflected local opinion.

Yet “green” issues often face a stubborn reaction from local government.  Such was the case in Liverpool over Sefton Meadows in Sefton Park. Again, local resistance to the proposed “development” of the site, forced the city council and its mayor to deny favoured builder Redrow its plans to build on this pristine parkland. Still, municipal obstinacy kicks in. Whilst local councillors speak of planting wild flowers on the site (I shall say nothing here of the destruction of the National Wildflower Centre in Knowsley!!), the Liverpool mayor wants the Meadows to become a city farm. This is a spiteful reaction to those who campaigned to keep the site just as it is – a beautiful open space, splendid in its natural glory.

Incidentally, across Sefton Park stands a former tower block – Heysmoor Heights – sold off by a previous council. I read that the freeholders – Abacus Land 4 Ltd – are squeezing flat owners for £18,000 per flat, to bring the block’s fire precautions up to speed post the Grenfell Tower disaster. These legal extortionists are based in the tax haven of Guernsey. Perhaps the mayor would be better occupied throwing his weight around on issues such as this, to the benefit of ripped-off electors.

As we head towards the ballot boxes, and given the impending council tax rises AND an increased police precept, voters are likely to be looking at what has been done TO them, rather than, perhaps, what local government might have done FOR them. Whilst the austerity foisted on them by national government will indubitably be on the minds of the electorate, so too will the actions (or inaction) of local government. In the Liverpool City Region, that judgement translates locally as a judgement on Labour in government.

Cunard Yanks

Fifty or sixty years ago, “Cunard Yanks” were a familiar feature of the Merseyside scene. They were generally – but not always – merchant seamen who had shipped across to the United States eastern seaboard from Liverpool, and who had adopted what they saw as iconic American styles. They wore Wrangler or Levi jeans, and perhaps a Ben Sherman shirt, or a Fruit of the Loom sweatshirt. They posed casually in city pubs, smoking Lucky Strike or Chesterfield cigarettes, lit with their Zippo lighter. They were ersatz Americans, sometimes affecting a mid-Atlantic drawl. In short, they were phonies.

Whenever I hear the word “Cunard”, I think of these particular “Yanks”. Thus, when the Cunard Building is mentioned – and it often is, for the wrong reasons – I smile at the thought of all the phoney proposals launched from this profoundly miscalculated purchase of Mayor Anderson (Sorry to raise him yet again but he makes all the decisions in Liverpool, including the purchase of the centre piece of the Three Graces).

You will recall that the first piece of baloney justifying its purchase was its intended use as a cruise passenger terminal. It was an inane suggestion, and once it was recognised as such, a whole series of fanciful suggestions were promoted for the building’s use other than as a vanity waterfront office for the mayor.  Such a case was the plan for there to be two restaurants in the building, run by a Manchester –based Australian. Bizarrely, this was a result of a liaison between the mayor, and partners John Hyland, a Liverpool “personality”, and Lib Dem peer Lord Carlisle (the previous public alliance of these two was one as a defendant in court and the other as his barrister!!). Needless to say, the restaurants plan never eventuated like so many of the Mayor’s announcements.

However, developer Lawrence Kenwright – a favourite of the mayor until they fell out over who could do most for the homeless – came to the rescue. He promised “something special” for the Cunard Building, including a Michelin-starred restaurant. That also has now fallen through, with the dismissal of the celebrity chef earmarked to run the show. Another phoney future for the Cunard Building has bitten the dust. Plus ça change, plus c’est la même chose …

It is really difficult to accept that there remains anybody who believes any of the spin which regularly emanates from the Cunard Building, so many have been the unfulfilled promises and so much has been fake news. The building itself is remarkable, but, as a purchase, is widely viewed as a financial white elephant, a symbol of the mayor’s misplaced confidence in his ability to conduct the city’s finances. With the latest loss of the city’s finance director, and even before the suggested loan to Everton FC, the future financial course of the council looks very problematic (and that is without continued austerity being taken into account).

It might be considered that, politically, this is a tough enough row to hoe. Then along comes our almost invisible Police Commissioner with a hefty rise in the police precept. One might expect a sympathetic hearing for this – after all, working people suffer disproportionately from criminal activity. However, the revelations of the cost of her office have caused tremendous anger among electors across Merseyside. An annual expenditure on her twenty four staff of £832,000 raises the question: what do they all do?? This alone could be a cause of real electoral difficulties for Labour even in their redoubts across Merseyside.

I cannot recall the same amount of disquiet across the city-region with ALL levels of local government than is the case today. I DO recall that in Liverpool in the early seventies, the then Liberal Party went from one councillor to city-wide control in a couple of years, due principally to the then council’s inertia. There was then widespread dissatisfaction with a self-satisfied Labour administration perceived as electorally complacent, indifferent to the electorate, and inflexible in policy. Could such a dramatic turnaround happen again? Well, just listen to what electors are saying… As for Cunard Yanks, who sails to New York these days?



The Last Chance Saloon

The completion date for the new Royal Hospital in Liverpool has again been put back – to when we do not know. The main contractors – megabuilders Carillion – which is a huge concern, is in all sorts of debt problems. Many commentators believe that, big although Carillion is, it may be only days away from a total collapse if it cannot persuade its bankers to reschedule its debts.

This is the background to many major construction problems today; and it should give pause for thought in those advocating a loan by Liverpool City Council for the construction of a new stadium for Everton Football Club. Let me remind you what is being proposed. Without reference to anyone, outside of the city’s magic circle of the self-appointed “great and good”, Mayor Anderson is proposing that the city of Liverpool should borrow about £350 million, and then lend it to the football club. Now, as an Evertonian myself, I would like to see EFC playing in a modern stadium, but not one financed by the local council tax payer.

Needless to say, we are being told that it would be a sound investment, returning an income to the city for years to come. Were we not told that that was the case when the Cunard Building was bought in the fiasco in which it was supposed to be a cruise line terminal? It is a repeat, on a grand scale, of the council purchase of the EFC training ground at Finch Farm. It is also a massive inflation of the subsidy given to Peel for Speke Airport, who coincidentally also own the site of the proposed stadium. What we should really consider is the risk involved – massive – and the ability of the council (and the mayor) to negotiate such an arrangement. After all, it is the council tax payer who will be expected to underwrite this proposal.

Other than the council, there are two major private companies involved in the proposed stadium deal – EFC and Peel. None of the principals who own and run these firms, and are involved in this deal, live in Liverpool. The two major individuals are both billionaires – Moshiri at EFC (who is a Monaco resident), and Whittaker of Peel (he also lives in a tax haven – the Isle of Man). Yet they hope that Liverpool residents will take on the risk of their project, and from which they will both benefit financially. Enter the champion of the council tax payer – Mayor Anderson. His sole business experience was as manager of the Munro public house, and he ran that into the ground. Normally, one would expect professional advice from the council’s senior officers. Currently, the council’s chief executive is under suspension, and facing criminal charges .The council’s finance director has left the council (and is reportedly now listed as a potential prosecution witness against the chief executive!). Nor has a chief planning officer been appointed to the current vacancy. The question arises as to who advises Mayor Anderson on this complex issue, other than his business friends who have a direct pecuniary interest. It is certain that Mayor Anderson does not have the skills required to navigate successfully around the wheeler-dealers of Peel and EFC.

A recent “Times” article pointed out that there was an increasing tendency for local authorities to take an “entrepreneurial” route to raise income in these times of austerity. Such an approach can be a huge mistake – I recall a Scottish council blowing all of its reserves some years ago by following a similar course. Whether it is a bridge, a golf course or a shopping centre, a capitalist venture is for capitalists, not for local authorities. They should not carry the risks associated with otherwise commercial developments. Local government’s prime responsibilities lie first and foremost with the provision of core services.

In the case of the stadium proposal, much is made of regeneration in north Liverpool. What this really means is the commercial development of the docks – a pretext for kick starting Peel’s stalled Liverpool Waters interests. The regeneration argument is the lever by which they might access funds (at a minimum cost) for a new stadium. The Treasury would find “regeneration” a more acceptable rationale than simply building a new stadium when their approval is sought by the council to borrow the necessary funds. However, the debate has gone on about regeneration in north Liverpool for over 25 years. That debate for me was characterised by two features. Firstly, the culture of the council was such that it was institutionally incapable of leading that regeneration. Secondly, its thinking paid no regard for the people of north Liverpool.

The cost of the proposed stadium has already shot up to £500 million; we can anticipate it rising further. There would need to be a special insurance premium to cover the council’s risk, and that would be costly. There would be Section 106 costs incurred. These and the extra insurance would bite into the supposed benefits accruing to the city. Most of all, we cannot foretell what lies in the years ahead, despite Mayor Anderson’s confident predictions. Did he not make equally fanciful claims for New Chinatown before it collapsed in scandal? In short, this madcap scheme has all the features of a potential disaster for local council tax payers.

When Tony Byrne confidently assured his fellow Liverpool councillors that he had the city’s finances under control thirty three years ago, he and they were blissfully unaware that – when government chose – they were to be surcharged and banned from office. Those councillors were jointly and severally liable for the prescribed loss caused to the city. Liverpool councillors should bear in mind this lesson from yesteryear when they come to vote on this outrageous subsidy to billionaires.

Happy New Year!

The year 2017 flickered out on a sour note for Liverpool City Council. The courts had found against them in an action brought over the disastrous New Chinatown debacle. All hoped for a happier 2018, only to be disappointed at the outset by the ACC car park fire. Only time will tell if questions on outdated building regulations – specifically, a requirement for sprinkler systems in such public facilities – will be positively answered.

Yet already there appears to be the potential for possible problems for the council. As the owners of the car park, there will be a huge cost involved in its demolition and replacement. Will insurance cover this? In addition, the lawyers seem to be circling – who knows what they will come up with. Such are the perils which face large organisations in times like these. We can only wait and watch.

However, as the ACC is owned by Liverpool City Council, I checked over the company. It gave me an interesting insight into the way in which major public projects are run, and by whom. I began by looking at who sat on the board of directors. These total eight in number.

The chairman of the board is Mr Ian Ayre, a familiar name to football fans across the city-region.  Mr Ayre resigned as chief executive of Liverpool FC on the 24th of February last. Five weeks later, he took up the role of director – and chairman – of ACC on April 1st. Curiously, he gave Companies House his place of residence as “Germany”.  Alongside him on the board are Mr Ged Fitzgerald, suspended chief executive of Liverpool City Council, and the former chief executive of Lancashire County Council, Mr Phil Halsall. Both of these gentlemen are currently on police bail, facing charges of conspiracy and intimidation.

Of course, there is no show without Punch – Mayor Anderson has a seat on the board, along with Councillor Wendy Simon. The composition of the board is completed by the ACC’s chief executive, Mr Robert Prattey, and two “professional” directors, Mr Gerald Andrews and Mr Gregg Stott. Bear in mind that all companies of this nature require a board to run it. It is standard practice to split representation on it between the public and the private sectors. It is, after all, a substantial commercial enterprise.

In its annual report for 2017 filed with Companies House, ACC listed an annual turnover of £25.8 million, although a loss for the year of £582,000 was recorded. Like many financial reports, that of the ACC bamboozled an accounting ignoramus like myself. I suspect that there are many who, like me, come over all faint when considering such documentation – in this case, 42 pages long. So I look to the professional auditors for their approval or otherwise. In this case, they are Grant Thornton, who are also the district auditors for LCC amongst other councils and public bodies on Merseyside.

I did manage to pick out two very interesting entries – interesting to those who value “transparency and accountability”. The first of these was listed as “directors’ emoluments”- that is, wages to you and me. For 2017, they added up to a glorious total of £521,847. Before you gag, note that £264,224 of this went to “the highest paid director”. Who this is, we are not told; but, whoever it was, also picked up £23,858 in pension contributions.

Once the highest paid director is taken out of the equation, we are still left with an average “emolument” for each of the remaining directors, of about £36,800.It is hard to believe that this is actually the case, but that is what the published figures say. Indeed, further on in the report, it is noted that £1,662,777 was paid to “key management personnel”. The ACC promotional video lists eighteen people as senior managers in the chief executive’s team. Are these the recipients of this magnificent largesse? If so, it would average out at £92,390 per head.

There are not many on Merseyside making such money, particularly with an employer like the ACC reporting a loss. Can anyone out there enlighten the rest of us on this phenomenon?