---

Local government update

It is a matter of public record that Merseyside Police have for many months been conducting an investigation which has resulted in a number of arrests made on suspicion of fraud, bribery, corruption and misconduct in public office, both in December 2019 and in September 2020. Further arrests were made on 4 December 2020 in connection with offences of bribery and witness intimidation. This investigation involves a significant connection to Liverpool City Council.

This raises significant concerns as to whether the authority is currently complying with its best value duty under section 3 of the Local Government Act 1999.

Having carefully considered the evidence available to me, including information provided by the city council in response to requests from my department, it is clear that the council has taken significant steps to improve governance and assurances processes within the council, with respect to the authority’s planning, highways, regeneration and property management functions. However, given the seriousness of the issues identified through the police investigation, and to support the council to continue to strengthen its governance, and deliver services for the people of the city, I would like to direct, independent assurance that the council is compliant with its Best Value Duty. I have therefore today decided to exercise the powers granted to me by Parliament under the Local Government Act 1999 to appoint Max Caller CBE to carry out an inspection of the authority’s compliance with its best value duty. The matters to be covered by the inspection will be the authority’s planning, highways, regeneration and property management functions and the strength of associated audit and governance arrangements.

I have asked Max Caller CBE to report findings to me by 31 March 2021, or such later date as he agrees with me.

I hope Honourable Members will appreciate that we cannot be drawn into more detail while investigations are ongoing. Once the inspection is complete, I will carefully consider the inspection report. If it shows that the authority is in breach of its best value duty, I will then consider whether or not to exercise my powers of intervention under section 15 of the 1999 Act.

At this challenging time with respect to the Covid-19 pandemic, it is critical that Liverpool City Council continues to deliver public services and carry out its other statutory duties as effectively as possible, and I thank those working in the council for all they have done to date. My department is committed to providing the local authority with whatever support it may need to address these issues. Honourable Members and the people of Liverpool can be assured that the government will do all we can to support the city of Liverpool.