The report said it is “hard to see if this operation is truly being operated as a company”, adding it was possible for “councillors with no apparent role in the management of LSSL to intervene in its HR practices”.
It also said there is a “lack of control over expenditure making the management of budgets impossible”, and ordered a review of all the council’s companies.
Secretary of state
Ordered in December 2020 and released yesterday, (24 March) the best value inspection report was ordered by Robert Jenrick, secretary of state for local government.
According to a statement from Mr Jenrick yesterday in the House of Commons, the report was ordered after he received “persuasive evidence” on the council’s planning, highways, regeneration, property management functions and associated audit and governance arrangements.
The best value inspection report to be carried out by Max Caller, and the hard-hitting report was published yesterday.
It found “deeply concerning” mismanagement across the council, and government appointed commissioners will now oversee parts of the council.
Streetscene
Liverpool Streetscene services Ltd (LSSL) was set up in 2016 and services including refuse and recycling collection were transferred to it when the council ended its contract with Amey.
In 2018, “following substantial termination of the contract with Amey”, the highways maintenance services were also transferred to LSSL.
However the report says this was done “without plan or foresight as to how they would be managed and delivered in future years”.
The report said: “There is no evidence that senior managers understood the risks to the service or what resources, structures, processes, or procedures should be put in place to ensure a good service could be delivered”.
LSSL’s reporting was also brought into question.
It said: “Where it was appropriate to report back to cabinet, for example, on overspent Capital schemes, this was just covered in the S151 Officers monitoring report, without any justification provided by technical officers”.
It added that jobs were being awarded without knowing the contractor’s workplan being agreed in advance of the commission, leading to costs being increased.
“ Overall, the culture appeared to be rule avoidance,” the report said.
Concern
“Of greatest concern to the inspection team was the relationship between the core services team and LSSL,” the report explained.
It said it is “of concern” that LSSL board meetings are both “infrequent and do not discuss key reports which would enable the directors to understand how LSSL is performing in both physical and financial terms”.
“Of greatest concern was the relationship between the core services team and LSSL”
According to the report, there have been only five quorate meetings between December 2019 and January 2021. The inspector said board meeting should occur at least every six weeks and, in the current pandemic condition, should meet at least monthly.
It added than since 2018, the company has not revised its business plan, although the terms of reference for the board requires it to review and roll forward the business plan annually.
“It is clear that the reporting arrangements cannot ensure the directors are able to fulfil their roles and responsibilities envisaged by legislation,” the report said.
Value for money
The inspector said no appointed shareholder representative from the council sat at board meetings.
The consequence of this is that the council have no representative “to make binding decisions on its behalf, appears not to set financial targets nor to require compliance with key elements of council activity which would deliver value for money”.
“Finally, the inspection team noted that it was possible for councillors with no apparent role in the management of LSSL to intervene in its HR practices. This could not have happened in the core of LCC and should not have happened in LSSL. It is therefore hard to see if this operation is truly being operated as a company”.
In-house
In 2018, the council praised it’s decision to move in-house after claiming the private sector had “lost touch with the environment that local authorities were operating in” (see letsrecycle.com story).
This came after LSSL posted a loss of £700,000 in 2017/18. In 2018/19 in posted a loss of £750,000. It’s results for 2019/20 are due out soon.
‘Difficult’
Acting mayor, Councillor Wendy Simon and chief executive Tony Reeves issued a joint statement after the report was published.
It said: “This is a difficult day for our organisation and we take the report findings extremely seriously.
“The inspector’s report has highlighted several failings, but there is a collective commitment from both councillors and officers to learn from these mistakes. We would like to reassure all residents and businesses that we will take action to address all of the issues highlighted. We know we need to rebuild your trust”.
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