Council auditors call for independent review of authority’s finances

Liverpool City Council’s auditors have called for a full independent review into the authority’s finances.

This could include examining the communications of senior council officers, Grant Thornton has warned.

The business adviser said it was “unsatisfied” with answers it received from the council about whether there were concerns regarding areas not covered by government commissioners that were installed last year following the damaging Max Caller inquiry into the council.

This was after the arrest of the then Liverpool City Mayor Joe Anderson in December 2020, and the council’s director of regeneration, Nick Kavanagh, in December 2019. Both men deny any wrongdoing.

The commissioners have scrutinised the ‘problem’ areas of regeneration, highways, property management and planning.

But Grant Thornton has suggested an examination of other council departments beyond the three problem areas.

Grant Thornton director Andy Smith told a meeting of the council’s audit and governance committee that the arrest of Mayor Anderson was a “game changer” regarding the level of risk that has to be assessed before Grant Thornton can sign off the council’s books.

The auditors submitted questions to the council last September but said they were unsatisfied with the response.

Mr Smith said: “I believe the inspection only looked at regeneration, highways, planning and PAMS (property asset management service).

“We know the review did go a little bit wider, what it didn’t do was pro-actively go out to confirm there weren’t any issues elsewhere and we believe there is still a deficiency.

“It is likely, in our view, an independent inquiry is probably needed.”

Council chief executive, Tony Reeves, said the authority doesn’t “automatically accept” what Grant Thornton has requested and was concerned about the cost of such an in depth review, saying it could prove “very extensive indeed.”

He added: “It’s an ongoing discussion, we haven’t fallen out with our auditors, we’re questioning the value for money and proportionality.”

However, if there is no review and Grant Thornton refuses to sign off the accounts, director of finance, Mel Creighton, said: “It may impact on treasury management and we will need to have a look at the extent of that. If we’ve got unqualified (accounts) when it comes to authority lending, that may be more expensive for us.”