How Liverpool's top team fell apart May 23 2005
Daily Post
Chief Reporter Andy Kelly examines the break-up of the Storey/Henshaw team which once carried all before it
IT WAS, even by Liverpool's standards, a quite extraordinary night in the town hall. The date was Wednesday, March 16 this year and it effectively marked the final stage in the collapse of the relationship between Mike Storey and David Henshaw.
Liverpool were busy losing two points to Blackburn Rovers at Anfield that night, but the most dramatic contest in the city was playing out in Castle Street.
Earlier that day, Cllr Storey had chaired a special council committee to consider whether to offer Sir David a "sweetener" to keep him as Liverpool's chief executive beyond March, 2006.
The Daily Post had revealed four weeks earlier that Sir David would leave the council by that date to avoid new tax laws which would hit his lucrative pension fund.
It was widely expected a deal would be offered despite the by-now obvious personal animosity between the two men. It was felt maintaining continuity in the run-up to Capital of Culture year in 2008 was more important.
Just a few days earlier, at a major property conference, Cllr Storey had suggested to the Daily Post a deal was almost certain.
Sir David, 55, has always maintained he did not seek or ask for such a deal which would have cost the Merseyside local government pension scheme around £200,000. What seems almost certain is that he anticipated that some sort of deal would be made. But on arrival back in Liverpool, Cllr Storey found his backbench councillors widely opposed to any such deal.
As leader, Cllr Storey could have pushed it through but, emboldened by his backbench, he may have seen the opportunity to back the man who had become his nemesis into a corner.
No deal, he said, which meant Sir David would be leaving next March at the latest.
As news spread round the town hall, huddles of councillors gathered in corners to ponder the repercussions.
There was clear paranoia and unease around the building. Cllr Storey was happy to discuss the decision but would not do so within sight or sound of Sir David or any of those executives who remained loyal to him.
I was led through back stairs and various chambers of the town hall to reach an upstairs room where the leader of Liverpool council was finally prepared to discuss the decision in private.
He spoke of Sir David's "unique contribution" to the city's renaissance and said he still wanted him to stay, but understood he had to leave.
Sir David, meanwhile, telephoned the Daily Post offices and confirmed that his position was unchanged and that he would have no option but to resign rather than face the tax implications to his pension fund of staying on. The significance of the council decision was clear, as reported in the Daily Post next day: "The fact council leader Mike Storey did not use his huge support in the party to push the measure through is a clear sign his once formidable partnership with Sir David has entirely broken down.
"At best, he did not want to take on his backbenchers on the issue, at worst he probably agreed with their take on it."
For Sir David Henshaw, the situation was almost too much to bear. Not only was his career in Liverpool, and possibly in local government, coming to an end but - even worse - the public perception was that he had been out- manoeuvred by the man who was now his rival.
The humiliation was total. Sir David had been in London on business that afternoon so he had been informed of the decision on a crackly mobile phone line rather than in person, something even Cllr Storey regretted in private.
What happened that night was the culmination of a steep decline in the two men's relationship which could be traced back to summer, 2004.
There is no doubt Cllr Storey, effectively Sir David's employer, had become increasingly concerned about his leading executive's almost presidential leadership style.
A thoroughly modern politician, Cllr Storey is fully aware of the importance of public image and media relations.
With what critics would label "typical arrogance", David Henshaw regards such matters as beneath him and has regularly spoken of the local media as "low grade" and "immature", much to Cllr Storey's frustration.
It was rumoured that there was a major row between the two men when Liverpool waterfront's flagship Fourth Grace project collapsed last summer.
But the torpedo that really sunk their relationship hit home last October over Merseytram.
It has become known in Mike Storey's inner circle as the "Hartlepool incident".
The Daily Post learned on the afternoon of Friday, October 1, that both final bidders for the trams project had decided not to proceed with their bids, angry that the city council had asked for Line Two of the network to be rerouted to John Lennon Airport.
It meant a provisional offer of £170m of government funding for Line One and a bid for up to £200m for Line Two would be lost to Merseyside.
On the back of the collapse of the Fourth Grace, the loss of a second major infrastructure project and millions of pounds of investment was almost unthinkable.
Cllr Storey was informed of the latest situation by the Daily Post that night as he drove to Hartlepool with close confidantes to support the Liberal Democrats in a key by-election there.
For the first time in six years Cllr Storey, deeply frustrated by the lack of progress, publicly criticised his chief executive.
He suggested personality issues between Sir David and Merseytravel chief executive Neil Scales might be hindering the project, something both have always strongly denied.
Cllr Storey said: "We cannot go on like this. We owe it to future generations on Merseyside.
"These are powerful and highly-paid chief executives and I am surprised they have not done more to sort out their differences."
At the time, Sir David was holidaying in Scotland to mark his wedding anniversary, but when both men spoke later and Sir David learned of Cllr Storey's comments, he raged down the telephone at the council leader.
Rumours suggested Sir David had threatened to resign within days. With hindsight, Cllr Storey must deeply regret he did not do so.
Sources close to the council leader later said he "had never been spoken to in that way before".
That phone call sounded the death knell for a relationship which had once appeared impregnable.
Although never personal friends, the two men understood that, if Liverpool was to be reborn as a city, it needed a strong alliance between its political leadership and its administrative one.
They described it as "singing from the same hymn sheet".
Cllr Storey provided the political will to freeze the rocketing council tax levels which had been a symbolic block for new investment. Sir David found the efficiencies and particularly the workforce cuts to make the sums add up.
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