Ahead of Wednesday’s autumn statement – one of the UK government’s two annual ‘fiscal events’ where budgets are decided – Liverpool’s 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 authority would have to slash more services.
Since 2010, the Conservatives have cut funding to Liverpool by £314million ($393m), a fall of 56 per cent based on what it used to get under Labour’s government, which ended in 2010. Robinson and Bennett reminded the chancellor that during the same period, prosperous areas of the country have had their funding reduced by just three per cent.
Their letter also suggested this policy was “unsustainable”, warning that a number of councils – not just Liverpool’s – “could effectively go bankrupt in the coming months”. Some, including Birmingham and Croydon, in south London, already have.
Since the mini-budget crash of 2022, inflation has cost Liverpool a further £77million 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 has this got to do with football?
Well, it means the city of Liverpool simply cannot afford for the construction of Everton’s new stadium – one of the biggest building projects in its history – to fail.
In a press release from Everton, the Premier League club suggested their new home at the city’s Bramley-Moore Dock was “recognised as the largest single-site private sector development in the country”.
Everton projected it would be worth an estimated £1.3billion to the UK economy, creating tens of thousands of jobs and attracting 1.4million visitors to the city annually.
Everton’s new stadium will have a huge impact on the local area (Paul Ellis/AFP via Getty Images)
The figures partly explain why other local politicians, such as metro Mayor Steve Rotheram and the MP for West Derby, Ian Byrne, have entered the conversation since the Premier League imposed Everton’s unprecedented 10-point deduction last week.
After Rotheram wrote to the Premier League’s chief executive, Richard Masters, calling the punishment “disproportionate”, Byrne took a motion to parliament where he suggested it is 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 might mean for the city they represent if the points deduction leads to Everton being relegated from the Premier League.
For the whole of Liverpool, not just Evertonians, there would be economic consequences if that happens. And amid all the claims that the Premier League’s punishment was disproportionate – a point made loudly and repeatedly by the Everton fans who protested at the league’s London headquarters on Friday night and who will do so again at the home game against Manchester United on Sunday – the most unfair aspect of it all is that it could end up impacting those who have absolutely nothing to do with it.
Everton fans protested outside the Premier League’s headquarters (Photo: Jacob Whitehead)
When a football club fails, lots of people get hurt because of the debt spiral that follows.
In the 2019 case of Bolton Wanderers, they owed money to so many businesses and contractors in the town that the debts took years to clear. The knock-on effect of this meant the civic responsibilities of the council were harder to fulfil because it didn’t always see the profit it should have received through unpaid taxes or business rates. The town, as well as the club, was wounded by Bolton’s demise.
Given the Premier League recognises the challenges faced by communities that coexist with their local football clubs – they are displayed prominently in the five official initiatives that appear impressively on the organisation’s website – surely there is a better way to enforce punishment?
Though the fans will feel penalised the most, the failure at Everton is ultimately because of the decisions of Farhad Moshiri, an owner who is now on the verge of selling the club.
The commission’s report on Everton suggested that a financial sanction on Moshiri was ruled out because he was a “wealthy man”. While this blind assertion overlooks the possibility that wealthy men wince most at financial penalties, it does not recognise that many on the opposite end of the money scale might end up suffering because of this decision.
When the government’s fan-led review of the game was released in 2021, the white paper recognised that “English football is currently being endangered by the high and growing risk of financial failure among clubs across its top five tiers”. And the biggest cause of the problem was club owners, who acted “unilaterally, pursuing short-term interests with little accountability or scrutiny”.
That white paper was in favour of a regulator, which the Premier League is not – hence, perhaps, the scale of the punishment for Everton as the organisation they are part of attempts to prove it can govern itself.
Currently, any new club owner has to pass a test, but once that has been achieved, they are simply in. A regulator operating a new licence system would instead test them every three years, but there is no provision made for punishing owners who fall short.
Should Moshiri, rather than Everton, be punished for the club’s rule-breaking? (Paul Ellis/AFP via Getty Images)
So, what punishments could be more appropriate than a points penalty that impacts not just on supporters, but the community who may be deprived of Premier League football and all the economic benefits that flow from it?
One option could be the loss of highly valued voting and campaigning rights at Premier League meetings, therefore stripping them of the opportunity to rail against proposals, as a majority did this week around personal-liability rules, avoiding the possibility that the owners might get hit more often in the pocket than the clubs.
In addition, fines paid by owners rather than the clubs could be ringfenced by the Premier League into a community pot before being redistributed in places feeling 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 where clubs were monitored in four different fields, including sustainability, governance, equality, and fan engagement.
Presently, the team at the top of each league in the English game wins the most money at the end of it.
If Fair Game’s proposals were followed, it would offer more room for clubs who finish mid-table to prove they are better run than those who come first, or those who finish bottom to prove they are better run than one whose final placing is much higher than theirs, just because of the resources or impulses of an owner.
(Top photo: Yui Mok/PA Images via Getty Images)