Ahead of Wednesday’s autumn statement, one of the UK government’s two annual “fiscal events” at which budgets are decided, Liverpool council leader Liam Robinson and his deputy, finance chief Ruth Bennett, told the nation’s Chancellor of the Exchequer, Jeremy Hunt, that Without immediate help, the city’s local authorities would have to cut more services.
Since 2010, the Conservatives have cut funding to Liverpool by 314 million pounds ($393 million), a 56 percent drop compared to what it used to receive during the Labor government, which ended in 2010. Robinson and Bennett recalled to the chancellor that during the same period, prosperous areas of the country have seen their funding reduced by just three per cent.
His letter also suggested that this policy was “unsustainable”, warning that several councils – not just Liverpool – “could effectively go bankrupt in the coming months”. Some, including Birmingham and Croydon, south London, have already done so.
Since the 2022 mini-budget crisis, inflation has cost Liverpool another £77m in terms of what it can spend. This has affected education, social care and transport, and has exacerbated an already critical situation for homeless people. Meanwhile, a rising interest rate has meant the cost of borrowing for the council has soared.
What does this 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 their new home on the city’s Bramley-Moore dock was “recognized as the largest private sector development on a single site in the country”.
Everton projected it would be worth an estimated £1.3 billion to the UK economy, create tens of thousands of jobs and attract 1.4 million visitors to the city annually.
The figures partly explain why other local politicians, such as Metropolitan Mayor Steve Rotheram and West Derby MP Ian Byrne, have entered the conversation since the Premier League imposed the unprecedented 10-point deduction on Everton last week.
After Rotheram wrote to Premier League chief executive Richard Masters calling the punishment “disproportionate”, Byrne took a motion to parliament suggesting it was time for English football to be governed by a regulator.
Byrne and Rotheram are well-known Liverpool FC supporters, but each politician has the foresight to know what it could mean for the city they represent if the points deduction leads to Everton being relegated from the Premier League.
For all of Liverpool, not just Evertonians, there would be financial consequences if that happened. And amid all the claims that the Premier League’s punishment was disproportionate – a point made loudly and repeated by the Everton fans who protested at the league’s London headquarters on Friday night and who will again in the home game against Manchester United on Sunday – the most unfair thing about all of this is that it could end up impacting those who have absolutely nothing to do with it.
When a football club goes bankrupt, many people lose out due to the spiral of debt that follows.
In the Bolton Wanderers case of 2019, they owed money to so many city businesses and contractors that the debts took years to clear. The knock-on effect of this meant that the council’s civic responsibilities were harder to fulfill because it did not always see the profits it should have received through unpaid taxes or business rates. The town, as well as the club, were hurt by Bolton’s disappearance.
Given that the Premier League recognizes the challenges faced by communities co-existing with its local football clubs (displayed prominently in the five official initiatives that feature impressively on the organisation’s website), surely there is a better way to impose punishment?
Although the fans will be penalized the most, 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 on Everton suggested a financial sanction on Moshiri was ruled out because he was a “rich man”. While this blind statement discusses the possibility of rich men gaining more from financial sanctions, it fails to recognize that many on the opposite end of the monetary scale could end up suffering because of this decision.
When the government’s review of the game was published in 2021, the white paper acknowledged that “English football is currently endangered by the high and increasing risk of financial bankruptcy among clubs in its top five tiers.” And the main cause of the problem was the club owners, who acted “unilaterally, pursuing short-term interests with little accountability or scrutiny.”
That white paper was in favor of a regulator, something the Premier League is not; hence, perhaps, the magnitude of the punishment for Everton as an organization of which they are part tries to demonstrate that it can govern itself.
Currently, any new club owner has to pass a test, but once you’ve done it, you’re simply in. Instead, a regulator operating a new licensing system would test them every three years, but there is no provision to punish owners who fail to comply.
So what punishment could be more appropriate than a points penalty that affects not only the fans, but also the community that may be deprived of Premier League football and all the economic benefits that flow from it?
One option could be the loss of valuable voting and campaigning rights at Premier League meetings, thereby stripping them of the opportunity to protest against the proposals, as the majority did this week over personal liability rules. avoiding the possibility of owners being affected. more often in the pocket than in the clubs.
Additionally, fines paid by owners rather than clubs could be kept by the Premier League in a community fund before being redistributed to places that feel the impact of any 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 in 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 finishing mid-table to demonstrate that they are better managed than those in first place, or for those finishing last to demonstrate that they are better managed than one whose final position is much higher. than theirs, simply due to the resources or impulses of an owner.
(Top photo: Yui Mok/PA Images via Getty Images)