Ahead of Wednesday’s autumn statement – one of the UK government’s two annual “fiscal events” where budgets are decided – Liverpool council leader Liam Robinson and his deputy, finance chief Ruth Bennett, said to Chancellor of the Exchequer Jeremy Hunt that without immediate help, the city’s local authority would have to cut more services.
Since 2010, the Conservatives have cut funding to Liverpool by £314 million ($393 million), a 56% drop based on what it achieved under the Labor government, which ended in 2010. Robinson and Bennett recalled the chancellor that during the same period, prosperous areas of the country saw their funding reduced by only 3%.
Their letter also suggests that this policy is “unsustainable”, warning that a number of councils – not just Liverpool – “may actually go bankrupt in the coming months”. Some, including Birmingham and Croydon, south London, have already done so.
Since the collapse of the 2022 mini-budget, inflation has cost Liverpool a further £77 million in spending. This has affected education, social care and transport and exacerbated an already critical situation for homelessness. Meanwhile, a rising interest rate has meant the cost of borrowing for the municipality has skyrocketed.
What do you have to do with football?
Well, it means that the city of Liverpool simply cannot afford for the construction of Everton’s new stadium – one of the biggest construction projects in its history – to fail.
In an Everton press release, the Premier League club suggested that their new home at the city’s Bramley-Moore Dock has been “recognised as the largest private sector development on a single site in the country”.
Everton predicts it would be worth around £1.3 billion to the UK economy, creating tens of thousands of jobs and attracting 1.4 million visitors to the city every year.
The figures partly explain why other local politicians, such as mayor Steve Rotheram and West Derby MP Ian Byrne, have entered the conversation since the Premier League imposed Everton’s unprecedented 10-point deduction last week.
After Rotheram wrote to Premier League chief executive Richard Masters calling the punishment “disproportionate”, Byrne tabled a motion in parliament in which he suggested it is time English football was governed by a regulator.
Byrne and Rotheram are well-known supporters of Liverpool FC, but every politician has the foresight to know what it could mean for the city they represent if the points deduction led to Everton being relegated from the Premier League.
For the whole of Liverpool, not just Evertonians, there would be economic consequences if this happened. And amid all the claims that the Premier League’s punishment was disproportionate – a point made loudly and repeatedly by Everton fans who protested at the league’s London headquarters on Friday night and will do so again on Sunday in the home match against Manchester United – The most unfair aspect of all this is that it could end up affecting those who have absolutely nothing to do with it.
When a football club goes bankrupt, many people are hurt due to the debt spiral that follows.
In the case of Bolton Wanderers of 2019, they owed money to so many businesses and contractors in the city that it took years to pay off the debts. The knock-on effect of this meant that the council’s civic responsibilities were difficult to fulfill because it did not always see the profit it should have received through unpaid taxes or business rates. The city, as well as the club, were hurt by Bolton’s death.
Given that the Premier League recognizes the challenges faced by communities living alongside local football clubs – these are clearly visible in the five official initiatives which appear prominently on the organisation’s website – surely there is a better way to impose punishment?
Although fans will feel more penalized, Everton’s failure is ultimately due to the decisions of Farhad Moshiri, an owner who is now on the verge of selling the club.
The commission’s report into Everton suggested that a financial sanction against Moshiri was ruled out because he was a “rich man”. While this blind statement overlooks the possibility that rich men win more from financial sanctions, it fails to recognize that many at the opposite end of the monetary scale could end up suffering as a result of this decision.
When the government’s fan-led review of the game was published in 2021, the White Paper recognized that “English football is currently endangered by the high and increasing risk of financial failure among clubs in its top five tiers”. And the root cause of the problem was club owners, who acted “unilaterally, pursuing short-term interests with little accountability or control.”
That white paper was in favor of a regulator, which the Premier League is not – hence, perhaps, the extent of the punishment for Everton as the organization of which they are part attempts to demonstrate that it can govern itself.
Currently, every new club owner has to pass a test, but once he passes, he’s simply in. A regulator running a new licensing system would instead test them every three years, but there is no provision to punish owners who fall short.
So, what sanctions could be more appropriate than a points penalty which impacts not just the fans, but the community who could be deprived of Premier League football and all the economic benefits that come with it?
One option could be to lose their much-valued voting and campaigning rights at Premier League meetings, thus depriving them of the opportunity to rail against the proposals, as the majority did this week over personal liability rules, avoiding the possibility that the owners could be affected. more often in your pocket than in clubs.
Furthermore, sums paid by owners rather than clubs could be set aside by the Premier League in a community fund before being redistributed to locations feeling the impact of financial mismanagement. It would take some thought, but if the Premier League is serious about the communities it claims to support, it could work.
Fair Game, a group committed to achieving “fairness, sustainability and success”, this summer proposed a system in which clubs were monitored across four different fields, including sustainability, governance, equality and fan engagement.
Currently, the team at the top of each league in the English game wins the most money at the end.
If Fair Game’s proposals were followed, it would provide more space for clubs who finish mid-table to demonstrate they are in a better position than those who finish first, or for those who finish bottom to demonstrate they are in a better position than those whose final placing is much higher. of theirs, only because of an owner’s resources or impulses.
(Top photo: Yui Mok/PA Images via Getty Images)