Mutually agreed negotiated settlements have been reached between Liverpool Council and Everton Football Club over due diligence fees spent on the club’s new stadium project.
The local authority has agreed to give its chief executive, Tony Reeves, the power to bring to an end the “outstanding dispute” between the two parties after hundreds of thousands of pounds were spent on fees between 2016 and 2019 as it agreed to help fund Everton’s new Bramley Moore Dock stadium project. Everton later sought alternative sources of funding and did not pursue funding with the council.
It is expected that Everton will pay around half of the outstanding £700,000 - meaning a significant financial hit for the council, something slammed by local government commissioners who highlighted the “failure of governance” around the project. The commissioners have also ordered an investigation into how the council incurred “significant expenditure” between April 2016 and March 2019.
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It is said that during this period Liverpool Council failed to manage costs, “some of which are now irrecoverable.” Cllr Jane Corbett, deputy mayor and cabinet member for finance and resources, told this morning’s meeting of the cabinet that both sides had worked hard to finalise a solution.
She said: “This resolves one of a number of outstanding finance issues at the council and contributes towards the resolution of outstanding projects working with the local government commissioners. Both parties are willing to resolve the matter.
“Both sides have worked incredibly hard and have been keen to resolve this particular issue and to come up with a mutually agreed negotiated settlement.”
The commissioner review within the cabinet report said: “The Council incurred significant expenditure to investigate the possibility of a loan to EFC without any formal council approval and without any budget provision approval. The council failed to adequately manage costs, some of which are now irrecoverable.
“The Council failed to secure a cost indemnity to protect its position on fees and has been in negotiation with EFC for a number of years to reach a settlement, again without any Council approvals in place.” The commissioners added that this was a “failure of governance” and they “require a lesson learned” to be conducted and reported within three months to the council’s audit committee.
Authority has also been given to Mel Creighton, deputy chief executive, to write off any debt that arises from the difference between the invoice raised by the council and the settlement reached.
