Liverpool City Council report: spotlight on monitoring officers

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Why this decision?

In December 2019, five men (including Liverpool’s Mayor) were arrested as part of an ongoing investigation into fraud, bribery, corruption, witness intimidation and misfeasance in public office, relating to the award of building and development contracts in Liverpool.

The previous year, the Director of Regeneration had been arrested for conspiracy to defraud and misconduct in public office. Whilst neither men have been charged with any offences, Robert Jenrick ordered an inspection to determine whether Liverpool City Council was complying with its Duty of Best Value.

The inspection report is said to have found that Liverpool City Council breached its duties under section 3 Local Government Act 1999 to achieve best value in respect of its award of building contracts in the city.

The summary provided in Jenrick’s statement of 24 March 2021 points to a number of failures, including a lack of proper and due process across planning and regeneration, poor record keeping, lack of scrutiny and an environment of intimidation.

To address these issues, Jenrick proposed to use government powers to place three commissioners in Liverpool City Council, to oversee an improvement plan over the next three years at least.

An unprecedented move?

While this is a rare and often last resort move, this is not the first time the government has had to take similar action. In 2014, three commissioners were put in to work with Tower Hamlets council after reports of ‘cronyism’. In 2018 a report into Northamptonshire County Council found there to be financial mismanagement and was split into two district councils.

What makes it particularly controversial this time is the size of the city of Liverpool, and the fact that it is one of the Labour’s party key strongholds.

What does this mean for monitoring officers?

For a local council, the monitoring officer – a role defined by section 5 Local Government and Housing Act 1972 – is expected to pick up on contraventions of law or code of practice, maladministration, or injustice and to report where it occurs.

At the start of the review period, the City Solicitor holding the post of monitoring officer was not part of the management team and was therefore unable to have any form of oversight over the activity which would have allowed her to ensure she was acting in the best interests of the council.

The report outlined the difficulties faced by the legal team for development, including that working at reduced capacity ultimately led to the legal services team being side-lined, their valid concerns ignored, and lawyers being excluded from transactions that they should have been party to. As a result of a lack of resources, 25% of the legal work that they were doing being outsourced resulting in a decline in standards.

Councils should therefore ensure compliance with the measures implemented by monitoring officers, to ensure effective oversight over their activity. At Capital, we can help councils and monitoring officers to investigate where it’s suspected there may be a break down in best practice. We can also advise and support monitoring officers to ensure proper procedures are implemented in the first place.

If you have any question on the above, or would like to find out more about how we can help, please get in touch at p.ellis@capitallaw.co.uk.