The Government has ordered an emergency probe of Liverpool City Council.
Communities and local government secretary Robert Jenrick sanctioned the investigation following a number of arrests over alleged building corruption.
Joe Anderson was one of several council members detained by Merseyside Police on suspicion of conspiracy to commit bribery and witness intimidation.
The 62-year-old stepped aside last week from his role as the city’s elected Mayor pending the force ‘make clear their intentions’ on December 31.
Whitehall has enlisted Max Caller, a consultant who previously compiled similar reports on Northamptonshire and Tower Hamlets councils.
In a statement on Thursday, Jenrick said: “The matters to be covered by the inspection will be the authority’s planning, highways, regeneration and property management functions and the strength of associated audit and governance arrangements.”
“It is a matter of public record that Merseyside police have for many months been conducting an investigation which has resulted in a number of arrests made on suspicion of fraud, bribery, corruption and misconduct in public office, both in December 2019 and in September 2020.
“Further arrests were made on 4 December 2020 in connection with offences of bribery and witness intimidation. This investigation involves a significant connection to Liverpool city council.
“This raises significant concerns as to whether the authority is currently complying with its best value duty under section 3 of the Local Government Act 1999.”
Jenrick acknowledged the council had taken ‘significant steps to improve governance and assurances processes’ but said an inspection was necessary n light of the ongoing police investigation.
Cllr Wendy Simon, Liverpool’s acting mayor, and council chief executive Tony Reeves said: “We welcome the opportunity to work closely with government on this review.
“We are immensely proud of our staff and our work on growing the city’s economy and improving the life of all our residents.
“We look forward to working with government in a spirit of openness and collaboration.
“For the last 18 months, we have worked hard to strengthen our governance.
“We would like to reassure our residents that there will be no impact on the delivery of our services during this period.”