Big Spenders

Whilst Wirral Council considers changing its form of governance, I cannot help but notice that there is a growing view against the adoption of the current model as used in Liverpool. We ought not to be surprised at this – it has hardly been an outstanding success. Within Liverpool City Council itself, there have also been voices raised against the city’s current arrangements. The Liberal Democrat concerns might be put down to politics, pure and simple; and those of Cllr O’Byrne explained in terms of her personal political ambitions. However, the views of Labour parties across the city cannot so easily be dismissed. They reflect real grass roots concern at the lack of transparency and accountability.

Unsurprisingly, the present Liverpool mayoral model has its defenders. Discredited political has-been and now regular Echo columnist, Derek Hatton, is one. The city, he opined, “didn’t need….tinkering around the edges of the governance system – that’s just like rearranging the deckchairs on the Titanic”. I do not think he meant that the city was doomed to disaster, but a more appropriate application of his metaphor would be in relation to the mayoral proposal for another £50 million development fund, effectively another of his “Invest to Earn” wheezes.  This money would be borrowed to invest in commercial property, not in Liverpool, but across the country!!!

This madcap scheme arises just as the chaos in the retail property sector is exposed by the troubles of Phillip Green and his Arcadia group of companies. This has led to some of his commercial landlords slashing rents while others are being more hard-nosed, a significant pointer to the state of health of the commercial property sector across the country. This downward spiral is having a direct effect on Liverpool – and Merseyside generally – through our old friends Peel. The Sunday Times reports this week on the difficulties facing John Whittaker, the billionaire owner of Peel, and erstwhile friend of Mayor Anderson. Bear in mind that the sole purpose of Peel companies and investments is to make money for Mr Whittaker.

One of Peel’s many companies is property giant Intu Properties, the share price of which has toppled by over two thirds from what it was. In a style which I am sure Anderson will have noted, Whittaker borrowed heavily against his stake in Intu; but this borrowing has forced Whittaker to twice restructure his debts. In turn, this has necessitated the sale by Peel of some of its interests. Alongside another investor under pressure – Deutsche Bank – Whittaker is trying to sell off part of his share in Peel Ports. At the same time, he is also set to reduce his stake in loss-making Liverpool Airport, from 80% to 30%. I wonder if Mayor Anderson learns anything from these signs of a downward trend, especially as he has committed the city in so much support of Peel.

Take a different perspective. It is a matter of record that the mayor has taken full advantage of the powers afforded to him, to play the part of entrepreneur. How many times has he parroted the phrase “Invest to Earn”? Yet his record in the eyes of many has been abysmal; not, perhaps, for favoured sections of business, but for the health of the city’s finances. Whether one considers the Cunard Building, Finch Farm, or the airport itself, there is repeated confirmation of his lack of business acumen.

A recent business survey by top international accountancy firm, Ernst Young (EY), has shown Liverpool’s recent record in attracting overseas investment in stark relief to that of Manchester, a city without an elected mayor. In 2018, Manchester attracted 37 Foreign Investment Projects, 53% of all those in the north-west region. Liverpool, on the other hand, managed to attract just 8. Even that was down from the 2017 figure of 9. Despite all of the fanfare at the time, I see no evidence that the much publicised mayoral trips to Shanghai (China), Birmingham (Alabama) and Surabaya (Indonesia) delivering anything other than publicity for the mayor. As Bob Ward, regional chief for EY commented on his report, these unbalanced figures are “a cause for some concern”. That is putting it mildly.

What can be concluded is that the mayoral model has not been the economic success which it has repeatedly been claimed to be. Too often, poor decision making has meant the use of the city’s money in the interests of a few major players rather than the people of the city. This situation might be reversed over time with a return to a more transparent and accountable governance model, one which involves the whole council rather than one individual aided by a handful of acolytes.

One thought on “Big Spenders

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s