Liverpool does not find itself at the “financial brink” faced by other councils but could face difficult decisions in future, the city’s leader has said.
Earlier this month, Birmingham Council effectively declared bankruptcy when it informed the government it had potential liabilities reaching up to £750m regarding equal pay obligations. However, the city does not have the funds to meet those financial demands.
Speaking as ministers are expected to announce intervention in Birmingham, Cllr Liam Robinson, leader of Liverpool Council sought to set out the city’s position.
He said, “We want to reassure people across the city that Liverpool is in a solid financial position. We are not in a position where we will be issuing a Section 114 notice, we aren’t at the financial brink that other councils across the country either are or are approaching.
“Equally we’re not complacent, once we’re in a more robust position than we have been in in recent times, we know there’s still more work to do and potentially more difficult decisions we’ve got to take. We’re very pleased with the team we’ve got in place and the very methodical way they’re working through budget making and making sure we’re doing everything to the letter and in a lot of detail.”
Cllr Robinson was keen to lay the finger of blame for poor authority finances nationwide at the UK Government. He said despite being confident in Liverpool’s current position, the council could not afford to let its guard down.
He said, “We know because of the way local government finance right across this country is broken, and particularly city councils like our own where we’ve got high levels of deprivation, aren’t getting the levels of finance we need, we’ve still potentially more challenging decisions to take. We’re in a robust position and similar to the majority of councils, but we’re not taking anything for granted.
“We want to be honest with everyone. We want to reassure people that the city council is not going to be in that sort of crisis moment that other local authorities are.
“There is not a council in this land that is not in some form of financial distress because of the lack of government finance in this country. It’s not an easy message but we want to be dead honest with people right across the city about the financial situation the council finds itself in.”
It is expected the government will announce intervention into Birmingham Council amid its financial difficulties. It is expected they will be the latest authority after Liverpool to have commissioners overseeing the spending of public funds.
In November last year, it was confirmed a fifth commissioner – focusing specifically on finance – would join the government appointed officials overseeing Liverpool Council in the aftermath of the Caller Report. Cllr Robinson wouldn’t be drawn on if he was frustrated by a seeming lack of government oversight elsewhere given Liverpool’s more than two years under Whitehall observation.
He said, “I’m not going to comment on other councils but we never wanted commissioner intervention, our key focus is working very closely with the commissioners to make sure all the intervention can conclude, and finance is a good example of where we’ve been doing lots of detailed work with the commissioners, but equally by bringing in place a new management team within the department to make sure we’re in a good and strong position financially compared to where we’ve been in the past. I’m confident we’re well on the way with that journey.”
Earlier this year, it was revealed that more than £200m of bad and outstanding debt owed to Liverpool Council was expected to be written off, while in September last year, it was confirmed only Birmingham had a lower rate of council tax collection. Cllr Robinson, himself a former finance cabinet member, said the city was working to improve those rates and move past the “historic issue” of poor rates collection.
He said, “We’ve made some really good improvements in the way we’re collecting council tax, we’re doing similar things with corporate debtors that have been outstanding on things like business rates and rents and working through all those things that are owed to us to bring in the maximum amount we practically can. We know there’s more work to do to get us to a level where most councils are in terms of collecting the revenue that we’re owed but if we can do that, that makes some of the difficult decisions that we’ve got in the future eased, compared to if we’re not doing that.
“It’s a historic issue for Liverpool, we’ve not traditionally as a city council been good at collecting old money that’s owed to us, but we’re getting much better at that and I’m really pleased in a few short months with the progress the team has made.”
Turning his focus back to Whitehall, the Kensington councillor, who has led the city for four months, said focus on government funds had to be rethought, with a focus on how people lived, rather than the current model and long-term planning. He said: “It’s absolutely vital.
“When you think about Liverpool as a city, as a council, where more than half of our funding comes from national government, actually some sort of certainty about that is absolutely key. We believe the way the money is distributed should be more based on deprivation rather than the current formulas that are in place, but secondarily the ability to have in place a multi-year settlement would let us make more strategic and intelligent decisions.”