The city council could be forced to pay back up to £8.2m in European funding if Liverpool FC’s new stadium in Stanley Park does not go ahead, the Daily Post can reveal.
A report by the Audit Commission describes the way the council managed European and government grants during the Capital of Culture year, as a “significant issue”.
A total of £8.2m was given to the council to pay for improvements to Stanley Park that would allow the stadium development to begin.
But, according to the report to go before the council’s audit and accounts committee today, “the grant offer was made on the condition that the new Liverpool Football Club stadium will be built in Stanley Park. In the event that this does not occur, then the European Regional Development Fund grant of £8.2m will be repayable.” The council says it is in talks with the club regarding the issue, and has come to an agreement so it is not burdened with the bill itself.
But last night opposition leaders said the council should not be in a position where there is even the possibility it could end up liable for money linked to a commercial venture.
Cllr Joe Anderson said: “A robust arrangement should have been put in place to protect the council, not just on this scheme but on others as well.
“European funding was allocated on the premise that things would happen, and clearly if they’re not happening then there is the risk of the clawback.
“The council’s strategy just seems to be ‘let’s not worry about tomorrow, let’s grab what we can today’ and that approach is not good enough.
“People need answers: where is the money, what is it being used for and who is ultimately going to be responsible for paying it back? These risks should have been carefully considered when looking for funding in the first place.”
The Commission’s Certification of Claims and Returns audit for the year 2008/09 also highlights that the council was left with a bill of around £2.5m to cover a third share of a £7.5m funding shortfall for the Arena and Convention Centre (ACC). It hopes to get the money back from a revised bid put to European funders.
Earlier this year, the Post revealed how the council faced a £2m “clawback” of funding for the ACC, which includes the Echo Arena and BT Convention Centre, because the European Council of Auditors declared the contract arrangements “anti-competitive”.
Another issue identified by the auditors was the award of a contract for a construction project at Broadgreen school.
The report reads: “Our testing identified that the contract for the alteration and new extension of Broadgreen Primary School was not tendered in accordance with the council’s standing orders.
“Council officers have informed us that the work was awarded to a contractor following advice from the architects supervising the project on the grounds that the contractor had proved competitive on other projects, had demonstrated value for money and had a demonstrable track record.”
The report made a number of recommendations including ensuring the quality of documents relating to grant funding were improved.
Last night, council leader Cllr Warren Bradley and finance executive member Cllr Flo Clucas could not be reached for comment.
But a council spokesman insisted that, in its view, the Audit Commission report shows “effective management of public investment”.
On the Stanley Park project, the spokesman said: “This was money that was received for ancillary works linked to the stadium scheme. If the scheme does not go ahead, we can then go back to the club and the agreement is there will be no cost to the taxpayer for the scheme. We are unable to comment any further because it is a commercial agreement with the club.”
On the report’s other findings, the spokesman added: “We have already taken action to implement the recommendations in the report.
“A comprehensive review of grant claims from the current financial year carried out recently by our own internal audit team found no significant problems. In our view, the report demonstrates that public investment is managed properly and effectively by the city council.”
A spokesman for Liverpool FC said: “We continue to work in close partnership with Liverpool City Council and the local community on the regeneration of Anfield Breckfield and North Liverpool and remain committed to the building of the new LFC Stadium in Stanley Park.”
A report by the Audit Commission describes the way the council managed European and government grants during the Capital of Culture year, as a “significant issue”.
A total of £8.2m was given to the council to pay for improvements to Stanley Park that would allow the stadium development to begin.
But, according to the report to go before the council’s audit and accounts committee today, “the grant offer was made on the condition that the new Liverpool Football Club stadium will be built in Stanley Park. In the event that this does not occur, then the European Regional Development Fund grant of £8.2m will be repayable.” The council says it is in talks with the club regarding the issue, and has come to an agreement so it is not burdened with the bill itself.
But last night opposition leaders said the council should not be in a position where there is even the possibility it could end up liable for money linked to a commercial venture.
Cllr Joe Anderson said: “A robust arrangement should have been put in place to protect the council, not just on this scheme but on others as well.
“European funding was allocated on the premise that things would happen, and clearly if they’re not happening then there is the risk of the clawback.
“The council’s strategy just seems to be ‘let’s not worry about tomorrow, let’s grab what we can today’ and that approach is not good enough.
“People need answers: where is the money, what is it being used for and who is ultimately going to be responsible for paying it back? These risks should have been carefully considered when looking for funding in the first place.”
The Commission’s Certification of Claims and Returns audit for the year 2008/09 also highlights that the council was left with a bill of around £2.5m to cover a third share of a £7.5m funding shortfall for the Arena and Convention Centre (ACC). It hopes to get the money back from a revised bid put to European funders.
Earlier this year, the Post revealed how the council faced a £2m “clawback” of funding for the ACC, which includes the Echo Arena and BT Convention Centre, because the European Council of Auditors declared the contract arrangements “anti-competitive”.
Another issue identified by the auditors was the award of a contract for a construction project at Broadgreen school.
The report reads: “Our testing identified that the contract for the alteration and new extension of Broadgreen Primary School was not tendered in accordance with the council’s standing orders.
“Council officers have informed us that the work was awarded to a contractor following advice from the architects supervising the project on the grounds that the contractor had proved competitive on other projects, had demonstrated value for money and had a demonstrable track record.”
The report made a number of recommendations including ensuring the quality of documents relating to grant funding were improved.
Last night, council leader Cllr Warren Bradley and finance executive member Cllr Flo Clucas could not be reached for comment.
But a council spokesman insisted that, in its view, the Audit Commission report shows “effective management of public investment”.
On the Stanley Park project, the spokesman said: “This was money that was received for ancillary works linked to the stadium scheme. If the scheme does not go ahead, we can then go back to the club and the agreement is there will be no cost to the taxpayer for the scheme. We are unable to comment any further because it is a commercial agreement with the club.”
On the report’s other findings, the spokesman added: “We have already taken action to implement the recommendations in the report.
“A comprehensive review of grant claims from the current financial year carried out recently by our own internal audit team found no significant problems. In our view, the report demonstrates that public investment is managed properly and effectively by the city council.”
A spokesman for Liverpool FC said: “We continue to work in close partnership with Liverpool City Council and the local community on the regeneration of Anfield Breckfield and North Liverpool and remain committed to the building of the new LFC Stadium in Stanley Park.”
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