Happy New Year?

“And so this is Christmas; and what have you done?”, sang John Lennon fifty years ago. It is a question that several bodies need to answer, given recent events, as we try to assess the state of play in Liverpool. The record of those with the power and the responsibility to play a part in correcting the serious mismanagement of the city’s finances, is not a distinguished one to date. Let us begin with the council itself. As a body, it has failed to hold to account those who have been systematically corrupting the council’s dealings over a period of years. They cannot but accept a degree of blame for the way in which council taxpayers’ money has been brazenly plundered; but they are not alone. Others have looked on in magisterial inactivity.

Take the council’s auditors. I approached them in person years ago to ask how and why the council was not exercising due diligence in their property transactions. They did nothing. The local newspaper was also missing in action – it could (or would) not see the wood for the trees when it came to the council. It was a betrayal of its own traditions and of its readers. Worse still, it became habituated to stealing credit for exposing council malfeasance long after brave individuals had made the case on social media. Instead, they published every bit of false news emanating from the council public relations unit and from developers keen to promote their latest money-grubbing project. Its investigative journalism was non-existent.

Although there have recently been high profile arrests, I remain puzzled at the slow response of Merseyside Police to what has been apparent to any observer of the local council scene. I put the question directly to the previous chief constable, only to receive a delphic reply. I have spoken to other members of our finest. I have even raised it directly with the Police and Crime Commissioner, who, unlike her peers across the country, appears to have taken no interest in her responsibilities. It is no surprise, if regrettable, that she has gained a reputation as the Invisible Woman.

I know that there are still ongoing inquiries like Operation Sheridan. This led to the downfall of the previous chief executive amongst others, but it appears to be stuck within the machinery of the Crown Prosecution Service. Lancashire Police led this inquiry, and have done their bit.  However, once it is before the courts, it leads right into the heart of Liverpool and the Liverpool Direct set-up.  This remains one of the many areas where there are serious questions to be answered.

The government bears its own responsibility.  It has hidden behind the argument that it is for the electors of Liverpool to decide who they have as mayor, judging the latter’s performance for good or ill.  There are obvious problems with this view.  Firstly, in a virtually one-party city like Liverpool, it is very difficult to challenge the dominant party’s choice of candidate.  Secondly, there is an assumption that all issues can be resolved with a change at the top.  This is wrong when there is a deeply-embedded culture of corruption wider than one individual and one administration.  Thirdly, the city is being run under a model which resulted from a stitch-up between ex-Chancellor, George Osborne, and a present mayor.  The people of Liverpool, unlike other cities, were not given a say in this via a referendum.

So what can be done?  The use of commissioners should be extended to a root and branch excision within the council, and wholesale change (e.g. delegated powers) of practices which facilitate abuse.  Secondly, I would like the people of Liverpool to be given a choice – in line with other cities – as to the system of governance they would like.  If that was not to happen, the Labour Party must step in to ensure that their candidate for mayor next May, is purer than Caesar’s wife.  That would exclude all of those in the council who have been closely identified with the present mayor.  Rightly or wrongly, people’s attitudes towards anyone within the mayor’s circle of associates will be viewed through jaundiced eyes.

This coming year will be a really telling one for the city of Liverpool and the other members of the city-region.  We all know that if Liverpool sneezes, they will each catch a cold.  It will not be easy to get the city back on track, but it is incumbent on us all, at every level, to give it our best shorts.

Happy New Year!

What Next?

A recent blog of mine (see “Stay Alert”) raised an issue concerning  confusion over the identity of one of the partners in a company – Midia – which is, in turn, party to a bid to develop the International Garden Festival site. The company is adamant that “their” man is most definitely not the fraudster in question. Moreover, they believe that confusion was deliberately sown in an attempt by rival interests to scuttle their bid. I knew that politics could be a dirty game, but it appears that business suffers from a similar affliction. In this instance, it is the use of the phenomenon known as “fake news”.

More telling is the company’s intention to withdraw from the Liverpool investment scene altogether, given the way the city appears to operate. This is far from the first time that this view has been expressed. Indeed, I have commented on it in the past, based on both personal and anecdotal experience. Recent events involving the criminal justice system and leading lights within the city’s administration, do nothing to dispel the mistrust towards the city council which increasing numbers of people have.

Nevertheless, we are where we are. The city mayor has said that he is stepping down, at least for the duration of his bail period. Frankly, he had little choice in the matter, given the seriousness of the potential charges which might include conspiracy, bribery and intimidation – hardly minor traffic offences. He joins an increasing list of senior city officials, past and present, who await the outcome of various police investigations and Crown Prosecution Service deliberations. To put it mildly, this is a most unhappy state of affairs.

However, the Labour group on Liverpool City Council has decided that Cllr Wendy Simons should act pro tem as Mayor. In itself, this raises a number of questions. I should say at the outset that I have never met or communicated in any way with Cllr Simons. I understand that she has been a councillor for thirteen years, and has had long experience both as a trade union official and as a lay Labour Party officer. Yet she was elected to the council to represent her ward, not to a mayoral post. She is, along with members of the Mayor’s cabinet, where she is as a result of the mayor’s patronage. Does this give democratic legitimacy to her elevation? I think not.

The sorry saga of the mayor’s situation – arrested on bail and suspended by the Labour Party – flags up weaknesses in both the government legislation covering elected mayors, and the Labour Party rules covering their members who become elected mayors. The nearest comparison to Mayor Anderson’s predicament of which I am aware, was that of Luftur Rahman, elected mayor in the London borough of Tower Hamlets. However, the charges which led to his downfall all related to electoral fraud. Serious charges, but I believe that what the police are suggesting, including criminal fraud, is even more serious.

I do not know what the answer is in the short term, but I would think that a combination of the current chief executive and government commissioners might provide some reassurance and help restore flagging confidence in the city, its governance, and its finances. Presumably, there will be an opportunity next May for the city’s electorate to give its own judgement on the way in which the city has, at best, been mismanaged.

Meanwhile, we must wait and see what the future holds for Mayor Anderson. As long as the police investigation hangs over his head, there is no chance of him being the Labour mayoral candidate again. Even if he was to be the candidate, I find it impossible to believe that the electors of Liverpool would vote for him. Of course, if charges are laid and secured in court, he will disappear from the political scene completely. The question then is: who and what comes after?

Proceed with Caution

Whenever one attempts to shine a light on the activities in Liverpool which have gained such notoriety, one must be extremely careful.  It is not just the potential for libel actions, but also the right of natural justice for people who might anyway not be to one’s liking.  Sometimes the people in question in my blogs are not known personally to me, but many are.  Take two names from my last blog.

Angela Forshaw of Liverpool Foundation Homes does have some background in housing, I am told, although she is listed with Companies House as being involved with sports centres.  Likewise, Frank Hont is a former union official with no background in housing.  Nor was it germane to my piece, as some of his former council colleagues suggested, that he had recently moved into a Redrow home.  The point of my blog was to show how the council did its business.

It does not stop with the council.  Obviously, there is a slice of the private sector which is not too fussy about the people with whom they deal.  I am always mindful of one local big investor who told me some time ago, that he had not invested in Liverpool for over seventeen years.  When I asked him why that was, given his loyalty to the city, he replied that he did not want to sit in the same room as some of the people who would necessarily be involved. 

There is no doubt that the city’s reputation is being tarnished. New Chinatown and other failed projects illustrated just how badly our reputation has been damaged internationally. Meanwhile, other cities like Manchester, Leeds and Birmingham have taken up the slack.  Speaking of Birmingham, another curious mention of Liverpool companies came to my attention recently.

The Unite mega-union has a national executive.  We all know that its current general secretary is scouser Lennie McCluskey.  His predecessor from the Wirral, Tony Woodley, is now in the House of Lords.  There was a seamless transition from one to the other.  Now there is an intra-union battle on for who succeeds Lenny.  I believe that this is where Liverpool has been dragged into the current scheming.

At a recent meeting of its executive, the London region raised questions about the participation of two Liverpool companies in the vastly inflated cost of a new union education centre built in Birmingham.  These two companies are consultants Purple Apple and builders, the Flanagan Group.  These were recruited by former general secretary Woodley.  How they connect with the Liverpool political scene is through Mayor Anderson.  Electoral records show that in his run-up to power in the city, these two firms were the biggest contributors to Anderson’s campaign funds, donating many thousands of pounds. A recently circulated photograph was taken at a Labour Party fundraiser, with Anderson, Derek Hatton and Flanagan’s principal, Paul Flanagan, having a convivial time.  Mr Flanagan is a regular at Labour events in the city. 

However, when the two companies were named at the Unite executive meeting, it was ruled out of order by national Unite chairman, Tony Woodhouse.  Mr Woodhouse, brother of Liverpool councillor General Woodhouse, is very close to both Woodley and McCluskey.  What is going on, I can only speculate, but the last thing Liverpool needs is to be dragged into the union’s mire.

Drain the Swamp!

Well, well, well! The arrests of Joe Anderson, Derek Hatton et al have really stirred up a hornets’ nest; but who should be surprised? We have all been aware that there has been something rotten at the heart of Liverpool City Council for a very long time. Yet, as with Donald Trump, there were so many gutless people in positions able to do something about it who chose to remain silent. Let us see where this latest twist in the sorry tale of Liverpool’s own Tammany Hall takes us.

National media are biting on this latest revelation because of its sensationalist nature, involving high profile “personalities”. Where have they been when the extensive series of property scams were revealed? I know that some of those scams are still subject to various on-going investigations; and because of their size (think of New Chinatown) some do attract wider, if passing, attention. Yet all of these scams have shared features which include – the involvement of known career criminals; the fleecing of contractors and of investors; and the failure of the council to fulfil its duties towards them. Perhaps it is worth looking again at some smaller council ventures to gain an insight into how the council operates (generally in the dark!).

For example, the council owns the riverside arena and convention centre, along with its associated hotel. In fact, there are two separate companies involved, one for the arena and convention centre and one for the hotel. To all intents and purposes, they are one and the same, with the same board of directors. Both companies have been highly profitable with what are, to the layman, confusing accounts (are not they all, you might say?). For example, the last published accounts for the arena company show total payments to its six directors of £501,493. Two of these directors are Mayor Anderson and his deputy Cllr Wendy Simon. Neither of these lists any payment in their register of interests so we might discount them from the directors’ pay equation. Similarly, council chief executive Tony Reeves is a third director, and is also presumably content with his hefty council salary (more than that of the Prime Minister). That leaves us with three remaining directors.

These are company CEO, Bob Prattey; his deputy, Faye Dyer; and commercial director, Max Steinberg (formerly a long-term senior adviser to the mayor). The accounts show that one of these three received from the directors’ pot in the last financial year, the sum of £266,120, together with £27,658 in pension contributions. That leaves £235,373 between the other two. Remember that these are payments as directors. Whether or not they are also paid as senior executives by either company is wholly unclear.

Complicating the ability to cross reference with the hotel company is the decision of the directors (the same six people) to decline to publish a directors’ report (as company law permits). However, the published accounts for the hotel note the payment of £224,626 to “key management personnel”. Who exactly are these? Are they the directors identified above? A little chink of light is shown by the pension contributions on behalf of the hotel’s 65 employees which amount to £32,000.  Not the highest paid group of people and reflective of the huge disparities between a select few and the mass of workers under the council’s wing.

Let us look at another council-sponsored initiative which shows the council’s Byzantine approach to its responsibilities. Liverpool Foundation Homes was set up in 2018 as what many saw as a job creation project for beaten councillor and mayoral favourite, Frank Hont (who has since departed from the company). It was given a kick start grant of £750,000, followed by a further grant of £170,000. In turn, this was followed by a loan of £1,717,690 with which “to buy property”. This flying start was so dynamic that by 09/08/19, Companies House had it listed as a dormant company. Its three directors are Mark Kitts of the city council; Angela Forshaw whose background is in sports centres; and Darrell Mercer who Companies House ties in to fifteen other companies, fourteen in London and one in the north-east!

This company employs eight people as far as I can ascertain, including Kitts on a salary of between £110,000 and £115,000. His deputy, Charles Jarvis, gets between £90,000 and £95,000. Below him, Louise Davies and Liam Knowles are in the £76,000 to £79,000 range. Finally, there are four juniors on good salaries for their respective roles. The question must be: what do these people do for their comfortable salaries? What is the evidence of “the development of building projects and the construction of domestic buildings” which is claimed to be its raison d’etre? Nothing that I can see, but I am happy to be corrected.

Back to where we came in. I often wonder what happens to many people at the top of the council tree. Lots end up stigmatised as they bring the city into disrepute. The latest round began with the arrests of former chief executive Ged Fitzgerald along with former senior council officers Phil Halsall and David McElhinney under police investigation Operation Sheridan. Next came director of regeneration Nick Kavanagh, lifted along with developer Elliot Lawless. Now we have Mayor Anderson together with deputy planning and highways chief, Andy Barr. Coincidentally, abrasive former city head of regeneration, Charlie Parker, along with former staff he recruited from Liverpool, is highlighted in the current issue of “Private Eye”. Now chief executive for the Jersey Government, he has been forced to resign over his lucrative moonlighting (£50,000 p.a.) for a property company, on top of his £250,000 salary. You can take the boy out of Liverpool…..

It is some years now since I took my concerns about the council to the relevant authorities who, I thought, might do something about it. I went to the then chief constable, John Murphy; to the district auditors, Grant Thornton; and to the now invisible police commissioner, Jane Kennedy. Nothing was done, and things grew progressively worse as the major players in this situation became ever more emboldened, thinking they were beyond being brought to account. Perhaps my timing was wrong or perhaps the authorities were just not interested; but there can be no dodging the harsh reality of corruption now.

Drain the swamp!