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LGA Corporate Peer Challenge - Liverpool City Council

Feedback report: 16th – 19th July 2024


1. Introduction

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Corporate Peer Challenge (CPC) is a highly valued improvement and assurance tool that is delivered by the sector for the sector. It involves a team of senior local government councillors and officers undertaking a comprehensive review of key finance, performance and governance information and then spending four days at Liverpool City Council to provide robust, strategic, and credible challenge and support.

CPC forms a key part of the improvement and assurance framework for local government. It is underpinned by the principles of Sector-led Improvement (SLI) put in place by councils and the Local Government Association (LGA) to support continuous improvement and assurance across the sector. These state that local authorities are: Responsible for their own performance, Accountable locally not nationally and have a collective responsibility for the performance of the sector. 

CPC assists councils in meeting part of their Best Value duty, with the UK Government expecting all local authorities to have a CPC at least every five years. 

Peers remain at the heart of the peer challenge process and provide a ‘practitioner perspective’ and ‘critical friend’ challenge. 

This report outlines the key findings of the peer team and the recommendations that the council are required to action. 

2. Executive summary

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Liverpool City Council has gone through a period of rapid improvement in the last two years. This journey must continue, to ensure that the council goes on to now reach a level that is more typical across the local government sector, arriving at a point where residents start to experience the benefits of the improvements made.

It is clear that the council has moved on from being an organisation which had ‘poor governance, insularity and leadership failings’ that required a commissioner-led intervention to help bring about the scale of improvement needed. The model of commissioner-led intervention came to an end in June 2024. This is a major milestone in the council’s improvement journey. As a “step down” from this intensive level of intervention, the council established a non-statutory Improvement Board, with the former lead Commissioner appointed as its chair. This will remain in place until March 2025. The visible and professional leadership of the leader and chief executive has been key to this improvement, in particular over the last 12 months.

Staff are clearly seeing this improvement and many are much more positive about the changing culture and approach to leadership. As a result, staff are now more likely to encourage someone to work at the council and overall staff retention is improving.

As the council is now taking its first steps out of a commissioner-led intervention and is at an ‘emerging’ stage from this, it must not slip back. This report contains feedback that will help ensure this does not happen.

This includes using the short window available now to recalibrate and re-focus around what is required for this next phase of the improvement journey. This will require focusing in on what matters most, including improving outcomes for residents and completing the work on ‘getting all of the basics right’. As well as further cementing into place the new, improved ways of working that are being established.

Following the ‘stepping-down’ of commissioners, the council (and, in particular, the Cabinet) must now lead its system of assurance and improvement. There is a requirement to further step into this, with the ownership, grip and rigour required internally, whilst continuously drawing on and engaging with external support to help along the way. For example, in order to do this, the approach to governance has improved and must continue to strengthen.

The Cabinet, along with the renewed and stabilising senior officer cohort, have played a vital role in the improvements seen to-date. The relationships across these groups have improved significantly and a stronger sense of coherence across the ‘top team’ is evident. When stepping further into the leadership of this system of assurance and improvement, continuing to develop these relationships will be important. Reflecting how relationships might change as roles evolve and as new challenges, requiring further tough decisions, are presented.

One area of immediate focus for the council should be to revisit the current financial planning and assumptions. Ensuring that they adequately reflect the demands and pressures across the medium-term. To minimise any risks of slipping backwards, full transparency around the scale of the financial challenge is important to ensure this is consistently seen. This includes both the in-year challenge and the challenges expected in the years ahead.

Similarly, clarity also needs to be given for the next phase of the corporate transformation programme. Over the past two years a large and ambitious transformation programme has been established, with allocated resources, governance and leadership in place. The programme is helping to draw together the multiple strands of improvement and change that have been needed to date. This has included the steps required to transform, as well as the steps for improving, the ‘basics’ that enable future transformation and improvement.

For this next stage, unpack and clarify the focus of the transformation programme. This can help to ensure more people are clear on what will be delivered, how and when. Ensuring suitable governance of the overarching programme and around individual projects to manage risks, deliver and realise benefits are equally important steps in strengthening the council’s resilience around these projects.

Children’s Social Care is a key area for improvement at the council. Children’s Social Care was graded ‘Inadequate’ by Ofsted in May 2023. The early progress, across three Ofsted monitoring visits in just nine months since then, is impressive and presents a positive direction of travel, which can be built upon. Continuously ensuring full corporate support in this area will be essential to this.

At the start of this CPC, the council reflected how the improvements being made internally were not being reflected in the experience of local residents. 43 per cent of Liverpool residents are satisfied with how the council runs things, compared to 53 per cent nationally. To improve the experience local residents have of the council there are clear steps to prioritise. These include improving core service delivery (e.g. highways, waste and litter). It also includes improving the experience that residents have of the various touchpoints with the council (for example, contact centres, one stop shops etc), as well as putting in place a new casework management system which works for members, works for services and, most importantly, works for the residents of Liverpool. Ensuring a clear and consistent link between all programmes and the benefits to local communities and residents will also help here. Including, for instance, being clear on the direct links between high profile cultural programmes and better outcomes for residents.

Taking these steps and others is essential to re-establishing credibility and rebuilding trust with the wider city and the residents of Liverpool.

To help increase the impact the council has across the city, a neighbourhood-led approach to service delivery and problem solving named ‘the Neighbourhood Model’ has been established. This model includes a lead officer in each of the 13 neighbourhoods identified across Liverpool. The peer team recognise that the model is at an embryonic stage. Even allowing for this, there is a lack of understanding across the organisation and amongst those partners the team spoke with about the aims of the model and how it will operate in practice. A focus should be on ensuring the organisation embraces and develops the model with partners. More work is required in communities and with the voluntary and community sector to build awareness and engagement with the model. Further communication and engagement will be needed to develop this shared understanding. The clarity of purpose needs to be further developed at pace, and consistently understood across the council, with partners, including those in the voluntary and community sectors, and with residents. Further internal and external communication support will be required to help ensure a common understanding is achieved.

As the neighbourhood model is being developed, it provides an exciting opportunity to reset the way that the council works with and engages partners and residents. This means using this neighbourhood-led outlook to more closely orientate the work of the council, partners and partnerships around the specific needs of the different neighbourhoods across Liverpool. There is an opportunity through this to review what works well, and what needs to be improved, as well as ensuring that all council-wide programmes have clear alignment to better outcomes for residents. This will mean re-engineering partnership working and the approach to engaging with communities.

Whilst the Liverpool Strategic Partnership (LSP) has recently agreed to write a new city plan, orientating the focus of partnership working around the needs of the different neighbourhoods across Liverpool will help to put the communities and residents of Liverpool, firmly at the heart of partnership working. This would be a significant change of approach to partnership working, warranting the co-design of something that is more akin to ‘The plan for Liverpool’ rather than a ‘city plan’. This can present all sorts of potential opportunities for Liverpool, in helping to improve the lives of all Liverpudlians.

3. Recommendations

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There are a number of observations and suggestions within the main section of the report. The following are the peer team’s key recommendations to the council:

Revisit your financial planning and assumptions as a priority. Ensure they adequately reflect demands, assumptions, pressures and the most current guidance across the medium-term.

2. Ensure that the scale of the financial challenge is consistently seen and understood across the council. Both for the in-year challenge and the years ahead. There are a number of considerations in this report that can help in continuing the journey of financial improvement. The council may wish to collate their actions against these into a finance improvement plan to support delivery.

3. Continue to ensure full corporate support for the improvement of Children’s Social Care.

4. Complete the work in a prioritised way of getting all of the basics right (across services, functions and ensuring people have the core tools for  the job). There is feedback throughout this report which reflects examples of this.

5. Continue to develop your leadership of the system of assurance and improvement at the council post-commissioners. This includes continuously and openly engaging external support and challenge. It also means supporting the Cabinet to develop further into taking on aspects of the roles played by Commissioners previously, in this regard.

6. Review, simplify and improve governance and accountability. Then embed this across the organisation.

7. Unpack, clarify and refocus the transformation programme. Ensure suitable governance is in place for individual projects to manage risk, deliver and realise benefits, with a clearer narrative for the programme in place to help ensure all stakeholders understand the detail of the journey the council is undertaking.

8. Continue to develop collective top team working throughout this period. Keeping close attention to the evolving roles and relationships of Cabinet and CMT, post-Commissioners.

9. Take steps to ensure the healthy member/officer relationships that are developing across the CMT and Cabinet are replicated between members and officers throughout the organisation.

10. Make the neighbourhood model work for your communities. Work with residents and partners to suitably and clearly define what this will do and how. Being clear about how this will enhance the lives of residents. Then ensure that a consistent understanding of what this model means for different people and how it will work, is in place – including how this will fit with service delivery.

11. Ensure a new casework management system is implemented which works for all members, for council services and, through improved performance, for the residents they serve. Use this to improve responsiveness and support insight, accountability and transparency.

12. Capitalise on the opportunity available now with partners and communities to jointly create ‘The Plan for Liverpool’ – rather than an internally-driven City Plan. Orientate this around how partners and partnership working can best serve all neighbourhoods in Liverpool, clearly stating the difference this way of working will represent. Whilst this title is given as an example of this shift, the name of this plan should be chosen locally.

4. Summary of peer challenge approach

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The peer team

Peer challenges are delivered by experienced elected member and officer peers. The make-up of the peer team reflected the focus of the peer challenge and peers were selected by the LGA on the basis of their relevant expertise. The peers were:

  • Lead Peer – Matt Jukes (Chief Executive – Hull City Council). 
  • Lead member – Cllr James Lewis (Leader – Leeds City Council)
  • Cllr Roger Harmer (Leader of the Liberal Democrat Group - Birmingham City Council)
  • Claire Taylor (Chief Operating Officer – Sheffield City Council)
  • Carol Culley (LGA Associate and former Deputy Chief Executive and City Treasurer at Manchester City Council)
  • Sarah Clarke (Service Director, Strategy and Governance – West Berkshire Council)
  • Claire Hogan (Principal Adviser – regional improvement lead LGA)
  • Peer Challenge Manager – Dan Archer (LGA)
  • Shadow Peer – D’jaleh McCrystal (LGA)

Scope and focus

The peer team considered the following five themes which form the core components of all Corporate Peer Challenges. These areas are critical to councils’ performance and improvement.

  1. Local priorities and outcomes - Are the council’s priorities clear and informed by the local context? Is the council delivering effectively on its priorities? Is there an organisational-wide approach to continuous improvement, with frequent monitoring, reporting on and updating of performance and improvement plans?
  2. Organisational and place leadership - Does the council provide effective local leadership? Are there good relationships with partner organisations and local communities?
  3. Governance and culture - Are there clear and robust governance arrangements? Is there a culture of challenge and scrutiny?
  4. Financial planning and management - Does the council have a grip on its current financial position? Does the council have a strategy and a plan to address its financial challenges? What is the relative financial resilience of the council like?
  5. Capacity for improvement - Is the organisation able to bring about the improvements it needs, including delivering on locally identified priorities? Does the council have the capacity to improve?

 As part of the five core elements outlined above, every Corporate Peer Challenge includes a strong focus on financial sustainability, performance, governance, and assurance. 

The peer challenge process

Peer challenges are improvement focused; it is important to stress that this was not an inspection. The process is not designed to provide an in-depth or technical assessment of plans and proposals. The peer team used their experience and knowledge of local government to reflect on the information presented to them by people they met, things they saw and material that they read.

The peer team prepared by reviewing a range of documents and information in order to ensure they were familiar with the council and the challenges it is facing. This included a position statement prepared by the council in advance of the peer team’s time on site. This provided a clear steer to the peer team on the local context at Liverpool City Council and what the peer team should focus on. It also included a comprehensive LGA Finance briefing (prepared using public reports from the council’s website) and a LGA performance report outlining benchmarking data for the council across a range of metrics. The latter was produced using the LGA’s local area benchmarking tool called LG Inform. 

The peer team then spent four days onsite at Liverpool, during which they:

  • Gathered evidence, information, and views from more than 55 meetings, in addition to further research and reading.
  • Spoke to more than 155 people including a range of council staff together with members and external stakeholders.

This report provides a summary of the peer team’s findings. In presenting feedback, they have done so as fellow local government officers and members.

5. Next steps

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5.1 Local priorities and outcomes

Throughout this CPC, the peer team were able to observe how the council has moved on from an organisation previously characterised as having ‘poor governance, insularity and leadership failings’. Whilst there remains a long way to go on this continuous improvement journey, this is a major milestone of improvement, which the council must continue to build from.

The team witnessed the enthusiasm and energy of staff who can see change happening and improvements being made. The pace of change has been, and continues to be, fast. It is also, undoubtedly, demanding and for many has been akin to “flying a plane and changing the wings at the same time”.

In a short period of time, the council has put in place a number of the strategies and plans required to bring about improvement across many areas of activity. The peer team understand why this has happened but it has led to an overcrowded policy and strategy landscape with a significant number of further plans due to be developed and agreed. This was reflected by many people that the peer team spoke with and, as one officer reflected, “we have strategies coming out of our ears, but some of our service delivery is still poor”. For this next stage of improvement and delivery, the policy and strategy landscape should be focused and simplified; reducing where possible the number of plans and strategies and increasing the strength of alignment between those that remain, with clear governance around each. This includes being selective and focused when reviewing existing plans and developing new ones.

Following the stepping down of Commissioners from their statutory roles, there is now a short, important window to recalibrate and focus in on what’s needed for this next stage of improvement and delivery. This will require focusing on what matters most, including:

  • Improving outcomes for all residents; 
  • Completing the work on ‘getting all of the basics right’; and, 
  • Further cementing into place the new, improved ways of working that are being established at the council.

Having and retaining a clear sense of strategic focus will be important. Inevitably, other challenges and opportunities will arise during this period; however, a clear and more focussed approach can help in more fully embedding and sustaining the changes and improvements the council seeks to make next. 

Throughout the peer challenge, the phrase “dynamic prioritisation” was used by many officers the team spoke with, with some confusion about what this means in practice. Whilst the team recognise the logic for this phrase, and understand where it may have come from, the peer team would ask the council to reflect on its use, and the implications of its misuse, during this next period of focus.

The council highlighted to the peer team at the start of this peer challenge that the improvements being made internally are not yet being seen or felt by residents. In 2024, 43 per cent of Liverpool residents reported feeling satisfied with how the council runs things, which compared to 53 per cent nationally. There are steps the council can take to ensure that more residents experience an improving council and see this in practice. Examples of steps to prioritise include: 

Improving core ‘resident facing’ service delivery:

  • Improving the quality of the principal and non-principal road network. The percentage of the principal road network requiring maintenance is 10 per cent, more than double the average for the council’s most similar CIPFA neighbouring councils at 4 per cent (2022/23). This gap is even larger for the non-principal road network, with 16 per cent requiring maintenance compared to 5 per cent on average amongst these most similar councils (2022/23).
  • Improving waste disposal. The proportion of waste in Liverpool sent for re-use, recycling or composting is 17.9 per cent which is around half the rate of the most similar council group (34.9 per cent - 2022/23)
  • “Clean up our beautiful City” was a point the peer team heard repeatedly during the week from those the team spoke with. In 2023, a survey from Keep Britain Tidy found that 8.5 per cent of Liverpool residents reported issues of litter, compared to 6.44 per cent in the national benchmark group. Whilst levels of reported detritus were much lower in Liverpool overall than is the case in the benchmark group, 8 per cent of people reported issues with graffiti, more than double the benchmark group average of 3.6 per cent. In response to this, the council has committed to increasing the enforcement capacity in Liverpool with an additional £0.475m in the 2024/25 and £0.950m in 2025/26 budgets. 

    Making further improvement across the different resident facing services may require further investment in those services, with room being made for this through the budget setting approach 

Ensuring the case management system at the council works for all members. 

The current system does not work was a point the team heard from members of all parties. “We have learnt to not bother putting things on the system” being a sentiment echoed by a number of members the team spoke with. Many members do not feel they get a timely or appropriate response to case issues raised. This often then leads to members contacting officers directly to resolve issues, or members resorting to ‘tagging’ a Cabinet member on social media in order to get something resolved. This is a particular risk for the council given its recent history of members directing the work of officers inappropriately, as was detailed in the council’s previous Best Value Inspection (2021). The council cannot have an approach where members feel that the only way to get things done is to ‘work around’ the systems and processes. From a perceptions and reputational perspective, this is a significant risk. 

A new case management system must be implemented successfully as a priority and the council is in the process of implementing this. Improving this system means having the right system, that all members are supported to use and then support others to use too. There will inevitably be issues experienced over time with any system, and they will need to be worked through. Having this in place and working well can help the council to better understand service performance, supporting proactive performance and people management. It increases the transparency of support from these services and reduces the potential for member fall-out on social media. It can also help members to be more responsive to the communities they represent - many of whom are now the only member in their ward. Ultimately, all of this will help to improve the experience that residents have of the council as a result.

This is one example of how the council can improve the experience that residents and customers have with the council at all touch-points – including for example the contact centre. Improving the experience and response that residents receive here, can then reduce the demands placed on ward members. Beyond this, bringing the voice and experience of residents authentically and visibly closer to the heart of the council’s decision making and planning can be an important part of rebuilding the trust that local residents have with the council. There are examples elsewhere in this report of what this might mean in both a neighbourhood and cultural context. 

There is an opportunity now to look further at how the council and its partners can work together differently to maximise their impact on the different communities of Liverpool. The LSP has recently agreed to develop a new partnership strategy (the previous iteration being known as the ‘City Plan’). From speaking with representatives from the council, partners and in the voluntary and community sectors, there is both an opportunity and an eagerness to do things differently, working more collaboratively as equal partners, with shared priorities. This eagerness goes beyond wanting to draft a document together but, rather, to co-produce new solutions working with residents. 

Starting this work from a neighbourhood focused perspective can present a powerful lens for developing this partnership approach. A neighbourhood-led approach to this means focusing on the neighbourhoods of Liverpool and looking at how the council, its partners and partnerships can shape their priorities and ways of working around the needs of the different local communities. This will also mean resisting the temptation of taking paternalistic approaches to partnership working and service delivery, where the council feels that it needs to provide solutions to all issues working in isolation, rather finding ways of doing things differently and working collaboratively to co-create new partnership aspirations for Liverpool.

This will represent a clear break from what has gone before and will present an opportunity to move from the perception of some people that the council’s focus can be too heavily balanced on the city centre. Moving away from a ‘City Plan’ to something like ‘The Plan for Liverpool’ would also symbolise this shift. Although the actual wording and branding should be co-designed and owned locally.

This changed approach has the potential for reaching some of the people and tackling some of the issues that have always been more difficult to address. The council needs to move quickly to capitalise on this eagerness from members of the voluntary and community sector to collaborate. 

Performance

Key performance metrics, comparing the council to its most similar councils, drawn from the publicly available data on LGInform at the time of the peer challenge, are used throughout this report.

The council is now taking the steps to develop its use of performance information and reporting and this reflects an organisation that is now ‘maturing’ from an approach which has been limited to reporting performance, towards managing and driving performance. Colleagues at the council have demonstrated how an increasing appetite for more performance information within the council is now being seen from some of those at senior levels.

Strong performance management is a key aspect of any council’s assurance and improvement framework. It has an essential role in effective prevention, early intervention, remediation and ensuring best value. Being strong in regards to performance management is a council wide responsibility and continuing to develop this approach is important for supporting the council to lead on its own assurance and improvement. It will also help the council to identify and communicate strong and improving practice whether that is internally or publicly.

Moving forward, performance officers are keen to further explore what approaches are being taken in other authorities that can help Liverpool to continue to improve. Taking steps to develop how performance, risk and audit can act in a more complementary way, and building the capability of managers in this space, can help in strengthening the collective understanding and management of risks and issues.

To support a heightened focus on improvement and delivery, and to support the transition to the council’s ownership of its own assurance and improvement system post-Commissioners, the council should:

  • Revisit the metrics used to ensure they suitably reflect council priorities. For example, do the metrics against each of the corporate priorities accurately reflect what members more specifically wanted to see, when the priorities were agreed?
  • Improve the visibility and accountability for progress by further developing the robustness of target setting, as well as the relevancy and clarity of benchmarking data that is used.
  • Further develop the integration of finance and performance monitoring, improving the line of sight between the amount the council spends and the outputs, impact and outcome this investment leads to.

The council has taken steps to improve the quality of report writing overall to make reports more accessible and transparent. With the wish to get to a point that “anyone who picks up a paper for a council meeting should be able to understand the key issues”. The above steps can further support this endeavour. 

Equally, improving the transparency and quality of insight shared on the remedial steps taken when performance drops below the desired standard will also help to make it clearer to members and officers across the council how issues are being dealt with and why.

5.2 Organisational and place leadership

The team received consistently positive feedback about the professional, visible leadership provided by the Leader and Chief Executive. The Leader, who came into this role in May 2023 is seen as a “real asset to the council and has given people confidence”. Staff internally have responded to the leadership at the council positively “they listen – we’re energised by it”.

The Cabinet have engaged significantly with their own development, following the change of governance model in May 2023. This follows an informally held ambition to become “the most professional Cabinet in the country”. More stable leadership is now in place with a whole new corporate leadership team appointed in the last 18 months as well as a new Wider Leadership Team structure implemented also. The relationship between the Cabinet and CMT, and their sense of being a collective top-team, has continued to strengthen, based around regular engagement, including bi-monthly ‘away days’ and policy discussions. The Cabinet and CMT should continue to build on this by being increasingly visible and engaging (for example with members, officers and partners). 50 per cent of staff believe that senior leaders demonstrate the corporate values in their behaviours, which is an 18 percentage point increase in the last year.

The continued development of the Cabinet and CMT will remain important, particularly now that the requirement for statutory external intervention and assurance has been removed. Cabinet must now step further into this assurance role. When doing so, it is important that the Cabinet and CMT ‘top team’ continues to invest time in their relationship, having routine honest and frank discussions, reflecting how the roles of members and officers are adapting as the focus shifts away from working within intervention. Equally, building on the improved relationship between members of the Cabinet and CMT, there is a role to champion the need to see these new, improved relationships further develop and deepen, expanding to relationships between all members and officers across the organisation, at all levels.

Relationships across political groups have shown some improvement and there is an opportunity to build on recent positive examples in this regard. For example, there are benefits in the Leader and opposition Leaders routinely meeting outside of formal meetings.

The council have taken the step to implement a neighbourhood model to help ensure consistent community engagement at a local level. The model is at an emerging stage although there is not a clear, consistent understanding of the purpose of the new model yet. Given the potential of the emerging neighbourhood model for supporting the council to improve outcomes for residents across the 13 identified neighbourhoods of Liverpool, the opportunity should be taken to work with your residents to more clearly define what this will do and how it will do it. This will help to avoid this from being seen as something that has been developed in a silo by those who could really help make it work. In further developing the model, greater clarity is also needed in relation to the role of elected members as there is a variation in understanding of this. In developing the model, the council should consider: 

  • Being clear on how this sits, right across the priorities in the Council Plan. It should also be made clear how this outlook and way of working is being used to inform organisational development plans, the community engagement approach and other related/supporting strategies and plans. This is one of the steps in strengthening the synergy between core strategy documents. 
  • More deeply exploring the options available for this model by speaking with others who have had success in progressing neighbourhood models elsewhere. This will build on, broaden and deepen the engagement done previously on this.
  • Setting and clarifying the objectives of the model – communicating these more clearly and what this means for the council overall (including the interdependencies that will emerge). 

Liverpool is a diverse and changing city – the population has grown by 20,000 in the past decade and 24 per cent of the population identify with an ethnic group other than ‘White UK’, which increases to 31 per cent of pupils in Liverpool schools. These figures vary significantly for different neighbourhoods, which is another reason why the neighbourhood model has such potential here. The percentage of the population who identify as disabled is 24 per cent, which is 6 percentage points higher than the national average, and 4 per cent of residents identify as LGB+ which is also higher than the national average of 3 per cent.

It is clear there is more to do to ensure the council suitably reflects the diversity of the communities it serves. Making more progress around equality, diversity and inclusion is important for supporting a resident focus as the city continues to evolve and change. It is also crucially important for helping all members and officers to be able to maximise their potential and productivity. There is a known, under-representation of people from black and minority ethnic groups at a senior level in the workforce. The council has also flagged the need to improve the quality of some of its equality impact assessments. Continuing to improve and review the council’s approach to EDI can help the council to chart its way forward in regards to equality, diversity and inclusion and it is, therefore, recommended that this work continues at pace.

The council should build on recent changes to the approach to engagement on equality, diversity and inclusion (EDI). The team heard that EDI is supported and valued by the leadership of the Council and there is a genuine commitment to addressing EDI issues, as demonstrated in the recently published equality objectives and refreshed EDI policy for the council. Positive work with the Anthony Walker Foundation has been undertaken and this will continue to be rolled out to lower tier managers within the council. As part of the transformation programme there have been changes to engagement and support for the networks. In the main, staff were positive about the new approach and there is a sense that issues raised are escalated appropriately. The changes have however also come with some initial challenges. For instance, the introduction of a new model of support and dedicated capacity for the networks, whilst welcomed in its intention, has led to concerns about the ability for group members to speak confidentially. This, in turn, has resulted in the reduction of the number of members in one of the network groups. Some further thought needs to be given as to how the network groups are supported from a corporate perspective, whilst maintaining the right balance with confidentiality - to help support ongoing meaningful engagement. This is something that the CMT is committed to doing.

The council’s partners share a sense that they can “see things have stepped up greatly” at the council and want to help more. For example, the Liverpool City Region Combined Authority, as well as neighbouring authorities across the sub-region, have seen a significant improvement in relationships with the council and would like to see this continue saying that “for the first time we are one team”. There are further offers of support available to the council from this, for example from the Combined Authority, that could be tapped into (e.g. for project delivery) and, with the pressures on resources risking delivery delay to some schemes, such support should be given serious consideration.

The required partnership governance and working arrangements should be based upon the direction set out in the new LSP plan that is due to be written. Support the agreed direction this sets out, ensuring that form clearly follows function. In doing this the peer team would highlight the benefits of streamlining and clarifying governance arrangements which can at present be confusing to a number of partners.

5.3 Governance and culture

The council moved to the Leader and Cabinet model of Governance in 2023, supported by an updated constitution. The governance arrangements overall have been seen to have improved significantly following this, as evidenced in the quality of reports being presented to members and the structured work programmes of the Overview and Scrutiny Committees and the Audit Committee. There is recognition from stakeholders that the culture is now improving and the tone of cross-party member relations has noticeably improved, which has been welcomed by members and officers alike.

It is clear that the foundations for good governance have now been laid, but further sustained work is required to embed this and develop its impact further. This can be seen in the transparency of decision making at the council which has shown improvement, for example, through the quality and clarity of reports. 

As the council seeks to move further forward it is important that it protects and consistently champions the integrity of all governance structures to prevent the council from ‘slipping back’. The understanding of what is required and the roles of different members, officers, and third parties in supporting the assurance process, post-Commissioners should be further developed, applied and supported in an appropriate manner by all.

The peer team were able to see how Overview and Scrutiny committees are now working positively and Chairs of committees observe the difference in their practice and level of engagement to what was the case previously. Work plans have been generated from having sought the views of all members. Whilst doing this, the committees have retained the ability to respond in an agile manner to emerging issues, such as the Lifestyles Centres item, which was called-in and considered by the Culture and Economy Scrutiny Committee.

The challenge for the council now is to move to a more consistently impactful approach to Overview and Scrutiny. This plays an important part in the council leading and driving its own local system of assurance and improvement. Further support for the chairs of Overview and Scrutiny will help them in leading their committees – taking the learning from elsewhere, including the approaches being used and the opportunities this may present for Liverpool. Examples of such support include dedicated external training offers for the chairs, developing their networks and peer mentoring, and training for all members of the scrutiny committees. There are offers of support the LGA can make to the council to aid in this regard, following this CPC.

Reviewing the process by which recommendations of Overview and Scrutiny are reported to Cabinet, and how the views of Cabinet are reported back to Scrutiny, will help to further promote engagement, impact, openness and transparency. This will also help to measure the effectiveness and impact of recommendations that have been accepted by Cabinet.

Further developing the use of pre-scrutiny, looking to utilise this approach from an earlier stage with more open areas of enquiry can widen engagement and support for policy development. Equally, looking to further utilise methods such as ‘rapid reviews’ and ‘focused reviews’ can also help support openness, transparency, insight, engagement, accountability and impact.

Overview and Scrutiny has an important role in the assurance and improvement system at the council, a role that should increase further moving forward. Consistently communicating the importance of this role and the positive impacts Overview and Scrutiny has on council decision making and assurance can help to support engagement with the committees from all stakeholders. The value placed on Overview and Scrutiny should also be supported and reinforced by targeting the consistent attendance and engagement of a broader range of senior officers.

The council has clearly taken steps that have led to the improvement of the Audit Committee, strengthening the role that it takes in the local assurance and improvement system. The appointment of an opposition Chairman, independent persons, and the training and support provided to the Committee, have all contributed positively to this position. Further training is required for Audit Committee members to keep this moving forward and to ensure that they are supported in their understanding of the important role that they fulfil as members of this committee. The recruitment of the additional independent members to the committee should be expedited.

The peer team heard how all member briefings from the Chief Executive, which were introduced in the last year, as well as informal briefings in person and online, have been welcomed, particularly by the high number of new members at the council. This type of engagement supports members to perform their roles in both the community and in the council. There is an opportunity to build on this, engaging a wider set of officers, which can help to further develop the relationships between members and officers across the council as referenced earlier in this report.

There are, however, examples where the responsiveness to member queries can also be an issue which runs the risk of creating potential perceptions around transparency which may not be helpful, for example, with members submitting freedom of information requests to obtain information that is not supplied by officers on request. An effective case management system for members, as referred to earlier in this report, should assist with this.

In the 2023/24 Internal Audit Annual Report, reported to the Audit Committee on the 18th July 2024, internal audit gave a limited assurance overall opinion. This reflected significant control weaknesses being identified that present a high risk to the control environment, with those weaknesses considered material enough to have a significant impact on the council’s overall governance, risk management and control arrangements at year end. The council should ensure that it understands what is required to improve that opinion and ensure that these actions are expedited.

Although significant improvements have been made, there is still more to do to enhance and embed the corporate risk management approach across the council and within directorates. It is essential that this is understood and applied consistently by all, with all risks suitably identified, measured, managed and mitigated.

The council shared a desire to begin to speed-up some decision making and reduce duplication. Taking these steps can support the council in this endeavour, whilst ensuring all risks and issues are suitably managed. 

The council has invested significantly in the senior leadership team it now has in place and is benefiting from this. Further supporting this team, so that they are trusted and empowered to make decisions, will help the council in benefitting from the senior officer capacity it now has and can help reduce the sense for some of “operating in a wind tunnel”. There is still some uncertainty at the council regarding governance processes which is exacerbated, in part, by the existence of multiple officer boards. The team heard some of the frustrations this leads to and the limitations it presents for effective and efficient processes because they impact on both the speed and transparency of decision making.

An improved audit trail around decision making is now in place which should not be lost. However, reducing the number of officer boards and making clearer to all what their purpose is will also help with this, reflecting a growing culture and approach to internal governance of the organisation which promotes responsibility and accountability of decision making. In doing this, consider the roles and impact of the different boards and whether they support the recalibrated priorities and transparency required of decision making, moving forward.

The peer team heard consistently how the governance and assurance framework at the council had significantly improved, but that there was also still much work to be done. The improvements should be recognised, but the improvement journey must now continue.

5.4 Financial planning and management

The council has a net revenue budget of £613.385m for 2024/25 and, at the time of the peer challenge (Q1), was forecasting a year-end break-even position. This follows an overspend of £7.677m after mitigations, against a net revenue budget of £567.459m in 2023/24 – equivalent to c. 1.4 per cent of the budget.

The council currently holds a General Fund balance, equating to 6 per cent of the net revenue budget (£36.803m), which follows the advice of a CIPFA review at the council in 2021. Provision was included within the 2024/25 budget to return the General Fund balance to this level, following the overspend seen in 2023/24. In addition, the council also holds a Financial Resilience Reserve of c. £6m to manage risks, particularly in relation to the timing of the delivery of savings. The amount the council holds in reserve overall equates to 20.7 per cent of its net revenue expenditure (2022/23). This is lower than the median for the council’s most similar CIPFA neighbour group (48.8 per cent).

The strength of financial leadership and its profile across the council has now improved. There is visible ownership for the budget across both members and officers at the council and the finance team and business partners appear well regarded with stronger relationships corporately. This model of business partnering needs to continue to be developed, being clear with everyone on how this model works, and will work going forward, including the roles of different business partners and how they will work together.

The council has developed a programme of savings totalling £85.588m from 2023/24 – 2025/26, with around half of this amount delivered in 2023/24. The move to the three-year rolling MTFP has been a big step forward at the council, alongside an improved level of savings delivery. In 2023/24, following in-year mitigations, £42.882m of savings were delivered from the £48.951m previously agreed. This represents both a significant increase in the size of the savings programme and an increase in the percentage of identified savings delivered.

In bringing about the improvements seen in the council’s financial leadership, the council has been prepared to take tough decisions – for example St. John’s Market debt management. There is a willingness to take decisions when the need for these decisions has been identified, such as in the charging for garden waste, rather than waiting for the budget process, which is an approach that is to be commended.

To further build on the progress made overall, to minimise the risks of ‘slipping back’ and to continue to foster positive, collective ownership of the budget position, the 2025/26 budget position should be updated as a matter of urgency to fully understand and communicate the position for future years, supported by a clearer budget timeline. This will help support a clear, collective financial grip and help ensure planned actions are sufficient to deliver a balanced budget. This includes having a greater degree of transparency from an earlier stage around income projections and council tax expectations.

As the council looks to improve children’s social care from its current inadequate rating, and to reflect anticipated growth in the spend required, around £8.359m was allocated in additional funding for children’s social care in 2024/25, with more limited additional funding budgeted in future years. The council is the highest spending for children’s services per head of population within its CIPFA group, spending £2,065 per 0 – 17 year old, compared to a group average of £1,509 in 2022/23.

It would also be beneficial in reviewing the budget position, to review the approach to Minimum Revenue Provision (MRP) to reflect the most current guidance, including for example where MRP relates to PFI and commercial loans.

Whilst the move to holding directorates to account for delivering within budget is a positive step forward, it should be ensured that monitoring reports are sufficiently detailed to enable members and officers to fully understand the budget position. This would include accessible granular detail on demand, savings delivery, risks and other relevant factors.

The above needs to be supported by clear reporting of the impact on savings delivery and budget spend. For example, showing the anticipated impact of transformation programmes on demand, whether this is being achieved, and ensuring that there is a clearer distinction from unrelated mitigation measures. This will help to more clearly monitor true progress against plans committed to.

The council is now making good progress on the publication of audited accounts. All outstanding accounts, up to and including 2022/23, are scheduled to be signed off by the end of Autumn and the council is on track to have a clean set of accounts as a true and fair view of the accounts for 2022/23. The draft auditors Value for Money (VFM) assessment for 2022/23 has identified a number of weaknesses in the council’s VFM arrangements, with 18 key recommendations against financial sustainability, governance and economy, efficiency and effectiveness. This is a reduction from 27 key recommendations for the accounts for the previous year. These are issues that the council is familiar with and the team heard how these are being addressed as part of the financial improvement programme.

The council took the decision to pause and reset the approach to the capital programme as part of its financial improvement journey. This was much needed and there is an opportunity to develop a more realistic, balanced and affordable programme, aligned to council priorities, moving forward. The approach taken has been to focus on the grip of the programme in 2023/24 – working on governance of the programme, processes, training, risk reporting and mitigations. In 2024/25, the plan is to oversee a reset of the programme – including the development of a new corporate strategy, strategic outline cases, the asset management strategy and completing condition surveys.

Steps have also been put in place to improve financial and commercial governance and, with this, it is important that the council is robust in its arrangements because issues from the past cannot be repeated.

A number of steps have now also been taken to improve payment processes, to reduce the amount of debt accruing and reduce the potential for further debts to accrue. For example, the Highways service has now transferred a number of services to online payment, which has improved the collection process and the revenue received. An automated payment telephone line has been established for residential and non-residential social care payments. The Parent Penalty Portal was also implemented in 2022/23 and is reporting a 5 per cent increase in the number of fines paid, with the recovery time reduced from an average of 21 days to five days. There are many more examples, including the use of business process re-engineering and Power BI dashboards to help empower managers to take proactive steps to reduce debt and improve performance.

This progress across the council needs to be maintained along with a clear timeline of expected improvement. Continuing to reduce debt, increase income and reduce the costs of collection means that the council is able to use more of its spending power behind its priorities for Liverpool.

Further progress is required to increase the level of council tax collected. At the time of the peer challenge, the council tax collection rate in Liverpool was reported as 86 per cent (2023/24), which met the council’s target for this metric in the Quarterly Performance Report to Cabinet. Whilst no comparator figure is shown in the performance report for this metric, the most recently available comparator figure at the time of the peer challenge, for the CIPFA nearest neighbour group (2023/24), was c. 93 per cent. This is an example of where the use of consistent benchmarking data can help support transparency and accountability within performance management. The peer team were informed during the course of the peer challenge that a percentage point increase in the Council Tax collection rate equates to c. £2.2m per-annum. This 7 percentage point gap in the collection rate, if bridged successfully, would therefore equate to c. £15.4m in additional income per-annum for the council, to spend against its priorities and deal with its budget pressures.

Replacing the council’s ERP system is now required as support for the existing system is being withdrawn. Undertaking this will help improve the quality and accessibility of financial information but is not without risk and will require the right capacity, governance, expertise and senior level project management to facilitate successful delivery. This is one of the most significant projects the council is undertaking, and it needs the right level of support to deliver, which will mean reviewing the plans for implementation. The council are encouraged at this stage, in light of the potential risks involved in this particular project, to keep the requirements of this as simple as possible and, if needed, modify internal processes and procedures rather than attempting to modify the ERP system.

It is important that the progress made in regard to financial planning, resilience and management is maintained, ensuring effective financial risk management, aligned to corporate accountability. A clear mapping and common understanding of the assurance environment and its needs in this area is a core part of the council now fully owning its own system of assurance and improvement, post-commissioners.

The council recognises it needs to significantly improve its approach to contract management and procurement with this being a core part of the finance improvement programme. It is vitally important that this work continues to help the council in continually reaching best value on behalf of the communities it serves. The council is now in the process of launching a refreshed Contract Management Framework which will need to be fully embedded and enhancing its contract management IT solution to enable self-service for both officers and suppliers to help demonstrate performance against contract management KPI’s.

5.5 Capacity for improvement

The feedback presented right across this report reflects the improving position of the council and what is required to help this improvement continue.

Permanent senior officer appointments are now in place, providing the organisation with sufficient senior capacity to support the ongoing and continuous improvement required. Following the stepping down of Commissioners, this creates an opportunity to recalibrate the use of this capacity across the local priorities for the next stage.

Throughout this report, reference has been given to the council now being the sole lead on its own assurance and improvement system. Openness and proactivity in seeking external assurance and support to complement this will remain critically important, as is the case in all local authorities, and is reflected as a characteristic in the Statutory Best Value Guidance.

The council is now opening itself up to external perspectives, learning and support (e.g. seeking out external peer challenges of Adults Social Care and Special Educational Needs and Disabilities). Having this in place helps support the council in meeting its vision of being ‘a trusted, aspirational and learning council, enabling a thriving and sustainable city for everyone’.

The improvements being made at the council are now being clearly seen by the workforce, with lots of room for continued improvement, building from this:

  • 47 per cent have seen an improvement in the culture within the organisation within the last 12 months, an 18 percentage point increase on last year.
  • 62 per cent feel positive about the direction the council is going in, a 16 percentage point increase on last year.
  • 72 per cent are satisfied overall with the experience of working for the council, a 15 percentage point increase on last year.
  • 62 per cent would describe morale in the team as good and people are working well together, a 15 percentage point increase on last year.

It is quite telling that the percentage of staff who would recommend working at the council to a friend or family member has increased by 18 percentage points in the last year, to 63 per cent. Alongside this, there has been a 20 per cent reduction in the number of people leaving the council in the last year – the equivalent of 91 people staying this year, who would have otherwise left.

Sickness absence, however, does not yet reflect this same picture of improvement and remains high. 14.21 days were missed in 2023/24 per full-time employee, which is slightly higher than the previous year (14.07 days) and is higher than the figure for Liverpool’s most similar council group – which is around 12 days per full time employee. This is a long-standing performance issue and something the council are now looking to improve upon with more attention to this corporately. Personal stress has been the primary reason for this and 40 per cent of sickness absence relates to mental health.

Work is underway to develop the culture at the council as reflected in the recently produced ‘People Plan’. This approach is focused around performance – for example appraisals, leadership development, performance management and so forth. As a result, this has, to date, been largely internally focussed. To further develop this to reflect this next stage of improvement and delivery and reflecting the feedback from this CPC, greater consideration should now be given to:

  • Putting residents and communities at the heart of the council’s culture – which is different to people feeling “consulted to death but not heard”.
  • The requirements of working well across the organisation, continuing to break down silos behind the delivery of a defined set of community-based priorities. 
  • A renewed culture of working in partnership and what this requires in terms of new and different relationships and ways of working.
  • Ensuring that new ways of working and approaches to service delivery over time reflect the financial realities the council is working with and sustained, consistent, collective ownership. Avoiding the risks of paternalistic responses, i.e. where the council feels that it needs to provide solutions to all issues working in isolation, when this is not required and/or sustainable.

Further work will then be required to embed the organisational values and associated behaviours aligned to this to create the conditions to drive forward the improvement and delivery priorities of the council.

The council has had a number of successes through its culture programme over a number of years, which has included hosting many major events, for example Eurovision in 2023. The council also needs to ensure that there is a clear link between all its programmes and the benefits to local communities and residents, including, for instance, being clear on the direct links between high profile cultural programmes and better outcomes for residents. For example, the peer team heard that, whilst different events undoubtedly have an economic benefit, they are not clearly communicated, and direct links between Culture Liverpool and employment programmes, apprenticeships and care leaver activity are not consistently in place. Cultural events were described by some as a ‘distraction’ from some of the effects of deprivation, with missed opportunities for ensuring the wider benefits are felt by all communities. The peer team would urge the council to take steps to make, strengthen and communicate these links.

Similarly, concern was raised by some staff about how ‘Culture Liverpool’ does not feel part of the wider council. There is little connection with other departments and there was a sense that the office is somewhat exclusive. The context of the restricted accessibility of culture Liverpool’s office and how it is equipped/furnished was given to support this perspective. This is at odds with the ‘one team’ and ‘inclusive’ values set out in the council’s most recent People Plan (2023 –2027).

The council has a talented communications team that is well respected externally and internally. Greater parity and connectivity is needed between the marketing of the city and positive stories about the city, with direct and targeted communications with residents and communities, so that their voices are more prominent.”

The council has established a significant and ambitious transformation programme with allocated resources, governance and leadership. The scope of this programme is both wide and deep – reflecting the extent of the issues that needed to be resolved, so that the council had in place the essentials for transformation and improvement. As a result, as the programme has grown and new issues have been identified, the complexity and extent of the programme has been difficult to communicate and is not uniformly understood.

Further work is therefore required to simplify and clearly articulate to members, the workforce and partners the purpose of the transformation programme, the specific changes it will represent and the impact and opportunities this can create for further improvement and development in future. This includes having clear timeframes for planned changes and what this requires of different stakeholders. This is important to help more members, officers and partners to understand the change journey the council is on, what this will look like over time and what this will mean for them. Reflecting on feedback the peer team received from those across the council, it is important that this is addressed ‘at pace’ to help manage the current uncertainty and the feeling of pressure this might lead to for staff. This work should also aim to streamline the governance arrangements of the transformation programme, the sense being that that there are too many boards and groups which are not only adding to confusion about the programmes but are also administratively burdensome.

For the purposes of the council’s next stage of improvement, the transformation plan needs to be broken down into significant areas of major change which are aligned to the MTFS. These can then be prioritised to provide clearer visibility, supporting resource allocation and assurance. Rigorous benefits management and the tracking of the delivery of savings will be essential for understanding the impact of the transformation programme as proactively as possible and the council are encouraged to increase the level of attention on this. There is a risk that the upfront investment identified, along with the lead-in time to deliver savings, could otherwise mean that existing and future plans will not deliver what is required for the MTFS, which is an important risk to manage, including through the steps highlighted above.

The team received consistent feedback of the need for members and officers to have all of the tools they require to do the job. Without these, there is a risk that people may bypass systems and processes, which then opens the council up to negative perceptions which may not necessarily be fair. The case management system referred to earlier is one example of this. In addition, 26 per cent of staff feel better ICT systems would help improvement at the council and there is much work to do to rationalise the 400 systems currently in use at the council, with a number of staff reliant on slower, less intuitive, manual processes than would be found in many other councils. One example was in relation to business rates collection. The team that administer business rates are not automatically notified of new developments or when new businesses open; the outcome being the council can then lose out on business rates revenue. There are now the beginnings of an ICT and digital strategy coming into place and this needs to be prioritised with significant investment, attention and the necessary expertise – which may require external support.

The council were clear with the peer team on their improvement needs around the management of the corporate estate. This is an area that needs significant development and is a vital enabler of improvement and transformation for other services across the council – supporting work such as effective co-location and enhanced cross-organisational or partnership working. This will need to continue to be prioritised, with relevant investment and delivery plans to support implementation. Building on the steps more recently taken in this regard, the council has recently appointed a Director of Property, with responsibility for the improvement of the whole property function at the council. This includes implementing the corporate landlord model, moving from an approach where individual services previously made their own decisions on property. More work is now required to centralise departmental budgets in a way that supports this. A Property Improvement Board is in place to oversee the improvements and those more widely regarding property, with a secondary route into the corporate Transformation Board.

Like many councils, housing, homelessness and temporary accommodation costs are significant challenges which have the potential to intensify further still in the short term. The work to create a more unified approach to housing needs further development and embedding. Tackling these challenges will require much closer working with registered providers and the voluntary, community and faith sector. The draft Housing Strategy has been consulted on and is due to be approved by Cabinet in Autumn. Housing options also require much work, including consideration of the operating model in place.

Last year, the council experienced some significant challenges in implementing the phase 1 changes it had planned in Adult Social Care. These specific challenges have now been successfully overcome and a clearer route through is now in place. Given the difficulties encountered in bringing about these changes, there will be learning that can be applied to other programmes across the council, supporting the effectiveness and timeliness of other transformation work and the requirements for this in terms of corporate support. Continue to share the lessons learned from this across the other change programmes.

A core focus of this CPC has been ensuring the council does not slip back on the improvements made to-date, whilst taking the opportunity to recalibrate and focus in on the requirements of this next stage of improvement. A core aspect of which is taking the steps to improve the residents experience and rebuilding the trust local residents have in the council. How the council demonstrates and tells a balanced and transparent story of improvement externally, and the impact it is having in local neighbourhoods, is crucially important. Increasing the number of residents who feel they are kept informed – from 33 per cent at present, compared to 54 per cent nationally- can help in supporting the conditions for a new relationship with communities, from which new ways of working across Liverpool could be built – creating all sorts of potential, for the City to continue to improve and take on the challenges it has not yet reached.

6. Next steps

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It is recognised that senior political and managerial leadership will want to consider, discuss and reflect on these findings. The LGA will continue to provide on-going support to the council. As part of the CPC, the council are also required to have a progress review and publish the findings from this within twelve months of the CPC. The LGA will also publish the progress review report on their website.

The progress review will provide space for a council’s senior leadership to report to peers on the progress made against each of the CPC’s recommendations, discuss early impact or learning and receive feedback on the implementation of the CPC action plan. The progress review will usually be delivered on-site over one day.

The date for the progress review at Liverpool City Council will take place in around April 2025 with the report from this published by no later than July 2025.

In the meantime, Claire Hogan, Principal Adviser for the North West, is the main contact between your authority and the Local Government Association. As outlined above, Claire is available to discuss any further support the council requires. [email protected].