THE government could partially seize control of Liverpool City Council after a damning "corruption" probe.
Five men – including elected mayor Joe Anderson – have been arrested on suspicion of conspiracy to commit bribery and witness intimidation.
As a result, some of the council's functions will now be taken over by the Ministry for Housing, Communities and Local Government (MHCLG).
This means Government-appointed commissioners are going to take over day-to-day operations.
The move is only the fifth time a "statutory intervention" has happened and is regarded as a "last resort".
It came after a damning report was published by Max Caller, a local government inspector.
He was called in to Liverpool in December by Robert Jenrick, Secretary of State for the MHCLG, following the arrests.
'FAILING TO COMPLY'
Speaking to the Commons today, Mr Jenrick said: "Expressed in formal terms, I am satisfied that the council is failing to comply with its best value duty. Therefore, I need to consider exercising my powers of intervention to secure compliance with the duty.
"To that end, in line with the procedures laid down in the Local Government Act 1999, I am writing today to the council asking them to make representations both on the Inspectorate's report and on a proposed intervention package.
"This package is centred on putting in place commissioners who I will appoint to exercise certain and limited functions of the council as required for a minimum of three years.
"I will take whatever steps are necessary to uphold the good name of local government."
But the move to control some of the city from Whitehall using commissioners appointed by a Tory government has not been welcomed by some.
'OUTRAGEOUS'
Liverpool is one of the biggest Labour strongholds in the UK and hasn't been controlled by the Tories since 1972.
The city lost its last Tory MP 38 years ago and has not had a Conservative councillor elected since 1998.
Derek Hatton, who was a member of Labour's militant faction and deputy mayor of the city council in the 1980s, said on Twitter: "Today could see the most outrageous and politically corrupt front to local democracy any of (us) have ever witnessed.
"Even in the 80s Thatcher stopped short of imposing commissioners… after she threw 47 of us out, local elections allowed 47 new Labour councillors to be then elected."
The Local Government Act 1999 gives the Secretary of State powers to appoint a person to inspect an authority and to intervene, taking over its functions, either directly or through commissioners.
This is possible when there is evidence that it is failing in its compliance with what is described as "best value" duties.
Best value means councils must deliver a balanced budget, provide statutory services and secure value for money in spending decisions.
Since 2010, the Secretary of State has previously intervened in four local authorities – Doncaster, Tower Hamlets, Rotherham and Northamptonshire.
Guidance from the MHCLG states each intervention is different.
Merseyside Police confirmed all five suspects remain under investigation.
Among those arrested was the council's director of regeneration, Nick Kavanagh.
He was held as part of the probe into building and development contracts and has since been dismissed from his role at the authority.
Both he and Mr Anderson deny any wrongdoing and have vowed to clear their names.
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