A letter from the chief executive of Everton FC has revealed Liverpool Council decided it could no longer provide any financial support to the Bramley-Moore stadium project.
Negotiations took place over four years about the possibility of the council providing a loan or grant that would help fund the new stadium. Everton later pursued alternative funding.
In May the council and club released a joint statement, stating the two parties could not reach an agreement on the proposed funding. This led to the club finding an alternative source of finance for Bramley-Moore.
READ MORE: Everton FC boss accused Liverpool council of 'menacing' demand for £537K
The statement read: "The Council and Everton could not reach agreement on the funding, which led to the football club pursuing a different funding solution."
The ECHO has now seen a letter from the club to the council which reveals more information about the matter.
The letter, from club chief executive Denise Barrett-Baxendale to her counterpart Tony Reeves, reads: "Given LCC has subsequently confirmed that it is no longer in a position to provide Everton with a secured term loan, or any other type of funding, to be used in the financing of the new stadium project."
The letter was sent in May this year. A trusted source told the ECHO that the council envisaged funding the scheme through the Public Works Loan Board (PWLB.)
In 2020 The Treasury published information stating that the government had revised the criteria around the PWLB funding capital schemes similar to Bramley-Moore.
The guidance states that the PWLB will not fund schemes that are focused toward a future yield.
It reads: "If HM Treasury has concerns that a loan may be used in a way that is incompatible with HM Treasury’s own duties to ensure that public spending represents good value for money to the taxpayer, the department will contact the LA to gain a fuller understanding of the situation."
Liverpool council carried out due diligence work in relation to the negotiations with Everton around funding the new stadium. This led to professional fees of £841,000.
In May Everton agreed to pay £502,000 of the £841,000 incurred by Liverpool Council. In a joint statement, it was said that an “amicable settlement” had been reached regarding the Bramley-Moore project.
The above correspondence was released by Liverpool council recently in relation to a Freedom of Information Act request.
The council has been involved in complex negotiations with Everton in relation to the fees. The negotiations took place during a series of meetings and letters.
There is no suggestion of wrongdoing in relation to Everton's involvement in this matter. In May a cabinet report revealed that government-appointed commissioners accused the council of “failure of governance” in relation to the fees.
The local authority was ordered to conduct an investigation into how it incurred “significant expenditure” to investigate the possibility of a loan to Everton FC as the club sought funding options for its new ground over a three-year period.
The commissioners identified a 'failure of governance' and found the council acted 'without any formal council approval and without any budget provision approval.'
In May the local authority referred to the matter as a "legacy issue which had been amicably resolved by both parties."
Everton agreed to pay £502,000 of the £841,000 incurred by the council.
Both parties said it was “reasonable and proportionate” for the Premier League club to pay more than £500,000 given that the work done was “solely for the benefit of Everton.”
A proportion of the fees incurred related to Liverpool Council exploring the use of any future stadium in its bid for the 2022 Commonwealth Games.
The ECHO understands that Everton has remained consistent in that there was no agreement reached on the liability of the due diligence fees incurred in setting up the funding deal.
Once Everton chose to seek funding from elsewhere the club entered into negotiations and reached an amicable settlement to meet costs which were reasonably incurred and attributable to the project funding.
READ NEXT
Liverpool schools facing 'damaging uncertainty' after catalogue of council errors
Debt collectors to chase up 30,000 cases across Liverpool this year
Liverpool manager Jurgen Klopp and Royle Family star to receive freedom of the city
Council makes £1.7m through green bin charge in four months
Liverpool Council to send back £800,000 from council tax rebate scheme
