Liverpool city council is “emerging from a difficult, somewhat toxic period”, according to the first report from government-appointed commissioners sent in following the former mayor’s arrest and allegations of corruption. The report, published after the commissioners’ first three months, also warned that the desire for quick change has led to a “frenetic rather than purposeful and targeted approach”. The four commissioners were appointed after an emergency inspection found a “serious breakdown of governance” and multiple failures to provide best value to taxpayers in the city. The inspection was triggered by the arrest of ex mayor Joe Anderson, the council’s former head of regeneration, Nick Kavanagh, and several others as part of a police investigation into allegations of fraud, bribery, corruption and misconduct in public office. They deny all wrong doing. The report expresses concerns over “financial resilience”, signalling the “significant revenue savings” the council needs to make over the next three years. It highlighted a £33m shortfall needed for the 2022/2023 budget. It also notes that the commissioners have “been troubled by the standards of core competencies such as report writing, forward planning for decision making and customer service”. Michael Gove praised the “hard work, ambition, and determination” of the new mayor, Joanne Anderson, her cabinet and the corporate leadership team. The secretary of state for levelling up, housing and communities also said Liverpool city council faces “a significant challenge ahead of them to provide the services” its residents deserve. “It is vital for Liverpool’s transformation that a clear line is drawn between the council of the past and the council of the future”, he said in a statement to the Commons. He said it “was not surprising”, given the circumstances, that the council’s approach to regeneration and property management “lacks rigour and commercial awareness”, adding that there was a “significant backlog of planning applications” which are constraining development in the city. The critical priorities for the council cabinet over the next six months must be “making tough decisions, especially on budget and service delivery matters, and, above all, owning the intervention”, according to the report. “This must be achieved through intensive support, development and challenge”, it continued. In a joint response, Anderson and chief executive Tony Reeves, said that “many changes” had already taken place, but they acknowledged there is “still a lot to do”. “This is a complex journey and the council needs to find the right balance between implementing improvements and building capacity, whilst managing a very difficult budget,” the statement read. The pair promised that the “well-publicised issues within the Highways and Regeneration teams” were “being tackled head on”, with new team leaders and a new highways business plan. Clear processes for staff to raise concerns were now in place, according to the statement, to tackle a previous “culture of bullying and intimidation”. The council has also appointed independent professionals to sit on committees overseeing audit, standards and ethics. Richard Kemp, the leader of the Liberal Democrats on the council, said the report was disappointing. It “tells us little that is new; fails to recognise the huge improvements that have been and makes contradictory recommendations for the way forward”, he said. Kemp expressed concern over “mission creep”, the lack of experience serving as councillors among the commissioners and the cost to the council of their appointment, which he said could amount to £2m over four years. The next commissioners’ report is due to be published in April 2022.