Probe ordered into proposed loan fee for Everton FC stadium

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The commissioners have criticized Liverpool Council’s ‘failure of governance’ over a potential loan deal with Everton FC over funding for a new stadium.

The local authority has been ordered to investigate how it went to ‘significant expense’ to investigate the possibility of a loan move to Everton FC as the club sought funding options for its new land over a period of three years.

A cabinet report which will be discussed behind closed doors next Friday detailed the government-appointed commissioners’ damning verdict on how Liverpool Council acted ‘without any formal council approval and without any budget provision approval’ from April 2016 to March 2019. In the meantime, according to the report, the local authority have engaged with Everton “to investigate aid funding a new stadium development project”, but these discussions “have ultimately failed”.

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It is said that during this period Liverpool Council failed to manage the costs, “some of which are now unrecoverable”. Now the commissioners have castigated the council for its mismanagement of the project.

The Commissioner’s review in the cabinet report said: ‘Council has incurred significant expenditure to investigate the possibility of a loan to EFC without any formal Council approval and without any budgetary provision approval. The council has failed to adequately manage the costs, some of which are now unrecoverable.

“The Board has been unsuccessful in obtaining compensation to protect its position on fees and has been in negotiations with EFC for several years to reach a settlement, again without any Board approval in place.” The commissioners added that it was a “governance failure” and that they “demand that a lesson learned” be conducted and reported within three months to the board’s audit committee.

The report says this “resolves one of the many outstanding financial issues within the council and helps resolve outstanding projects, working with local government commissioners.” He added that Liverpool Council and Everton FC were “eager to resolve this legacy issue” after several rounds of fruitless talks.

In January 2018, the board demanded compensation from Everton for the costs of due diligence, in the event the parties were unable to agree on loan terms, which the club tentatively agreed to, subject to the character reasonable cost. Cabinet is recommended to agree that chief executive Tony Reeves agrees to the final settlement with the Premier League side.

The power could also be given to Mel Creighton, Deputy General Manager, to cancel any debt resulting from the difference between the invoice issued by the council and the settlement reached. The report says that if the case were left unresolved for any longer, it would ‘risk negatively affecting the relationship with Everton Football Club’.

He added that this proposal would bring the saga to an end via a “sound settlement under all circumstances and allow the development plan for the existing stadium to be reversed, with its expected regeneration benefits”. Both parties are now eager to bring this matter to a mutually satisfactory conclusion. »

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