Liverpool City Council is facing the prospect of government commissioners taking over a large part of its operations as a result of the Caller Report. This ‘best value’ investigation makes a damning criticism of the council leadership and some senior council officers.
The hypocrisy of the Tories in making these criticisms is not lost on us, however.
The report says that over five years, Liverpool may have lost £100 million through unfavourable deals. Yet only last year, Robert Jenrick – the Tory Secretary for Housing, Communities, and Local Government – helped property developer Richard Desmond save almost £50 million in payments to Tower Hamlets Council, by fast-tracking planning permission for his firm’s East London investment. This all followed a £12,000 donation by Desmond to Tory Party funds.
And let’s not forget the billions given by the Tories to their friends in big business during the course of the pandemic. How much of taxpayers’ money has been wasted through cronyism and corruption by handing over test-and-trace contracts to firms such as Serco?
The whole thing stinks.— Dan Carden MP (@DanCardenMP) October 14, 2020
This Government’s incompetence, its cronyism, its ideological obsession with outsourcing and rip-off privatisation has undermined our NHS and put lives at risk.
Time to kick the profiteers out of the system and put local public health teams in charge. pic.twitter.com/ivqRy4WgOe
Ever since 2010, with the advent of the Tory-Liberal coalition, local councils across the country have faced deep cuts to grants from central government. Liverpool City Council has been no exception.
By 2019, the cuts in Liverpool amounted to £435 million. The council estimates this to be over 21% of its spending power. Only Burnley has suffered deeper cuts.
In Liverpool babies are dying and lives are being cut short.— Dr Mike Galsworthy (@mikegalsworthy) March 1, 2020
“Liverpool City Council has seen a staggering £436m slashed from its budget, with other local authorities in Merseyside having similarly devastating reductions.” https://t.co/kAW3rY0GhV
As the Caller Report states, these cuts were inflicted upon the fourth most deprived local authority in England.
In 2011, Liverpool City Council made £91 million in cuts and 1,200 job losses. The next year, £130 million was offered to the council by then-Tory Chancellor George Osborne, in exchange for a “robust business case”.
Around this time, Liverpool – along with other English cities – were holding referendums on whether to establish directly elected mayors. Supporters of this proposal, most notably Joe Anderson, jumped on Osborne’s offer as a justification for creating the post of mayor, and also to help avoid a No vote in the referendum.
This helped to create the powerful position of mayor, with little or no accountability. Any benefit we had from that bribe, meanwhile, has long gone.
Joe Anderson and his supporters opposed taking on the Tory government through a serious campaign for resources. Instead, as mayor, Anderson pushed forward policies such as ‘Invest to Earn’.
Furthermore, Anderson called for large-scale regeneration, in order to develop the local economy. The aim was to replace the money lost in government grants by increasing the amount collected through business rates and commercial returns.
Added to this was the promotion of social value by favouring Liverpool postcodes. This last policy was heavily criticised in the Caller Report, although it had support in and out of the Labour Party.
This is similar to the much-vaunted ‘Preston Model’ of community wealth building, which seeks to keep public money in the area, by commissioning contracts to local providers. Mayor Anderson always claimed he was first to implement this policy.
Despite these policies, cuts were still made to staff. In the report, it points out that some of the council’s problems are due to staff shortages. In property management, for example, 52 staff have been reduced to 17.
The Labour council was no real friend to workers. Even where there were victories, these were tainted. Services were taken out of the hands of private companies, only to be given to council-owned arm's length companies. And these could not be run democratically, as the Mayor appointed their directors.
Culture of fear
It is clear from the report that, in order to push through these policies, corners were cut by the Mayor and those in charge of regeneration. This reduced accountability and transparency.
This approach also meant that criticism could not be tolerated. A culture of fear arose amongst council staff, who described the style as “intimidating”.
It was in this highly bureaucratised system that abuses occurred. This included deals that were made to the distinct disadvantage of the council, and in favour of the developer.
These deals were not properly scrutinised, due to officers’ powers being delegated, and because of the direct intervention of the Mayor. It has been alleged that Mayor Anderson and others personally benefited from this, leading to Anderson’s arrest last year.
Hostility and attacks
Even councillors found it difficult to challenge decisions. This will not be news to those on the left in the local Labour Party. Left-wing members frequently found that any motion – or even question – critical of the Mayor would be met with outright hostility by him and his supporters on the right.
Ironically, these same people have consistently opposed any idea of a mass campaign against the cuts, by shouting that to do so would bring Tory Commissioners down on the city.
The Mayor himself would often rant about how he would not return to the “toy town” politics of the 1980s. In a pointed reference to the socialist Labour council of those times, Anderson referred to his policies as “sensible socialism”.
Liverpool Mayor Joe Anderson said: “I’m happy to have Derek Hatton back in the Labour Party. “What happened in the past was a product of its time, but he has now committed himself to the kind of sensible socialism that we’re doing here in Liverpool and want to see UK wide.”— steve (@oldheatonian) February 19, 2019
The last time he made this speech was to attack those on the left who – in the consultation that took place in 2019 – wanted the council to revert away from an executive Mayor, and towards the more democratic leader and committee model.
The left also supported triggering Anderson so that he would face a full selection process.
Socialists in the Labour Party – including those recently elected onto the council – should not be associated with the Anderson regime and its failings. Instead, they have been pushing for a real opposition to Tory cuts.
Fighting the cuts
In the 1980s, Liverpool faced sharp cuts from the Thatcher government. Furthermore, the city was dealing with long-term deprivation that had been ignored by the previous Liberal administration, which ruled with Tory support.
In response, the Labour council decided to launch a mass campaign for the resources it needed to tackle the city's problems.
This included launching the Urban Regeneration Strategy, which built 4,800 council houses, amongst other achievements. Back then, regeneration was properly planned, and not left to private developers.
Councillors drew up what would now be called a ‘needs budget’ of expenditure. At the same time, the council refused to raise rates – the forerunner of the council tax – above inflation, rightfully arguing that this would be a wage cut.
The gap between the money needed and that coming in from grants plus rates was £30 million. The demand for this amount was the centre of the campaign.
The city council then gained mass support, increasing the Labour vote by 40-80% in elections in the 1980's.
Now, however, Labour faces an uphill battle, because of the right-wing policies of the council in recent years. The Labour Party is increasingly unpopular, with 69% in a recent Liverpool Echo poll saying that they are thinking of voting for someone else.
Even more worrying is the figure of 89% who say that – after the recent revelations – they would support bringing in Tory commissioners.
Added to this danger is the stealthy way in which the commissioners are to be phased in. After the May elections, they will “advise and guide”, and will oversee any senior appointments. Only if the council fails to follow their “advice” will they assume direct powers. This is mafia-style blackmail, plain and simple.
The ‘advice’ of these agents, however, will actually be orders from Westminster. And despite mountains of evidence to the contrary, ‘efficiency’ for the Tories equals privatisation. The Tory cure for the mess in Liverpool will be to further punish its victims.
For a mass campaign
The labour movement must therefore organise Liverpool workers to fight against the imposition of commissioners from the start. This should include strike action by public sector workers against any proposed privatisations or cuts.
Starmer, however, has once again lined up with the Tories, whipping Labour MPs to support sending in the commissioners. Even left-wing MPs in Liverpool who have rebelled in the recent past are toeing the line, and failing to provide a lead.
Socialists must make it clear that – whatever the failings of Anderson and his crew – it is up to the working class in Liverpool, in and out of the Labour Party, to democratically sort these problems out.
In recent months, Starmer has done all he can to stifle this democracy, as he and the right wing seek to make Labour a safe pair of hands for big business.
We must start now to build a mass campaign against the cuts – to fight the austerity that is to come, and to restore services already slashed. This is the urgent task that the labour movement must militantly take up.
- Say no to the commissioners! Mobilise, organise, and strike to fight these Tory agents!
- Scrap the Mayor! For real democracy in Liverpool, in the interests of the working class!
- Bring all services properly in-house, under public ownership and democratic control!
- Labour and the trade unions must launch a mass campaign against the cuts!