A former assistant mayor of Liverpool has branded a housing company lauded by the former Mayor and promised to deliver 10,000 new homes as “a dog’s breakfast.”
Almost five years after launching Liverpool Foundation Homes, to “radically reshape” the city’s housing market, Liverpool Council moved the company into voluntary liquidation last year. A decision was taken by the council’s cabinet in October to wind down the operation that developed just 18 properties.
In a major launch back in 2018, then Mayor Joe Anderson said the new 'Foundations' company would deliver 10,000 properties across the city, fuelled by an estimated £500m investment programme. There would be a focus on building homes for foster families, the elderly, people with disabilities and the homeless as part of an 'ethical' housing company.
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It had been described by then Mayor Anderson as the most exciting policy of his time in office. Consigning the company to history last year, Deputy Mayor Cllr Jane Corbett, said the company was “no longer a viable proposition.”
The failure of the company was discussed by members of the city council’s companies governance sub-committee last night. Cllr Joe Hanson, a former assistant mayor to Joe Anderson, was scathing in his criticism of how Foundations was run.
He said: “I’m completely shocked at the lack of oversight. I work in the private sector, that’s normal practice there.”
Despite his anger, Cllr Hanson said the blame for the failure of the company lay with officers rather than elected officials. He said: “What were the executives doing? Clearly they were doing nothing.
“Nothing was happening. We get the blame for all of that as politicians but we’re not told what’s going on.
“Any blame to be laid should be with the senior officers at every level or chief executive of the time. I can’t believe a dog’s breakfast like Foundations was allowed to conduct itself in that way.”
Cllr Tom Crone, leader of the Green Party group, said there had “definitely been a political element to it” with Foundations acting as a “symptom of a wider problem.” A lessons learned exercise ordered following the closing down of the company four months ago found while Foundations was created to deliver on ambitious targets of social housing in the city, they “could not be met during its operation for several reasons.”
The report said the company had been “created without a clear policy strategy” and failed to “secure the internal funding required to deliver on its ambitions during its operation.” The 18 homes it did bring about are being transferred from the council to a registered provider, who can take over the rent to buy arrangements.
The exercise agreed with Cllr Crone’s assertion. It said political pressure was exerted over the company during its four years in operation, which resulted in council officers being “rapidly seconded” into the organisation “without clarity on the role of the company, what it was expected to deliver and therefore the skills it needed.”
Cllr Richard Kemp, leader of the Liberal Democrat group, said the company was so much a pipe dream “if the pipe was filled with crack cocaine.” He added: “It was bonkers from the start” and said there had been “fundamental failings right at the top and flowers down.
“Officers should have stopped it.” Cllr Steve Radford, leader of the Liberal Party group, said the company had been launched as a “concept” and there had been a lack of feedback on how it was working.
He said the problem “could arise with any external company we have.” Cllr Radford lamented the council’s lack of housing strategy and said “I think it’s going to get worse.”
The lessons learned report said Foundations was “established without due consideration as to how the Council was going to transfer/vest land and/or housing in the company.”
The report said the council’s target of 10,000 homes was “communicated before a delivery and funding plan had been approved and realistic targets had been set.” Furthermore, there had been a lack of agreed investment and “risk appetite for investment within the council.”
Cllr Crone said it would have been “great” if Foundations had succeeded and delivered thousands of affordable homes but moving forward, if the council is to learn lessons it must not “hamstring” itself and shy away from taking ambitious ideas. Cllr Hanson added that the council in setting up Foundations had taken on a project “we didn’t really understand.”
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