We are pleased that consultation is now starting on the redevelopment of Bramley Moore Dock by Everton. However, questions still remain about infrastructure costs and the redevelopment of the County Road area when EFC move out
Today I welcomed the announcements from Everton about the consultations with the people of Liverpool about the developments at Bramley Moore Dock. Lib Dems are very hopeful that this project will go ahead but extremely relieved that the Council will not be financing it. We have not got the skills in the public sector to manage and assess commercial risk such as the Stadium project. Indeed, we have never believed that the public sector route was a good one for Everton either.
CIPFA have done two reports which are relevant to this. The first of these was the report done for the Council some three years ago which raised a series of issues about the then scheme for the funding which was, it must be said different than the final one that Liverpool were proposing. Although I haven’t seen the report I have discussed its general conclusion with CIPFA.
They made clear that there were a very large number of risks associated with the scheme and in my opinion those risks have worsened since then because of BREXIT. Foreign ownership and foreign funds are under the spotlight as never before. This is coupled with the increased uncertainty of borrowing and investment which clearly exists in the UK as a whole at present.
They have produced another report last week which looked at the overall situation regarding local government borrowing from the Public Works Loans Board to fund commercial investment. They made clear that there were huge concerns about the scale of this and the EFC projects would have catapulted Liverpool to just about top of the league in terms of over borrowing to finance commercial speculation. Both the Government and CIPFA have made clear that PWLB borrowing should be linked to core work of the council such as the provision of public sector facilities.
At the same time very similar guidance has been put out by the Government. Although this is guidance and not law it is clear that the Government shares CIPFA’s concerns and is tightening up the conditions by which public money can be accessed. It would not have surprised me 12 months down the line that the route of cheap finance to onward lend would not have been possible at this scale.
In other words, a potential borrowing of £280 million (or possibly more) was always going to be a big gamble for the Council. Anyway, it begs the question, “if it was going to be that profitable for the council why did the Billionaire owner of the land and the Billionaire owner of the Club want to give up investment returns?” That’s not how they became rich!
I don’t know whether or not the Club have secured all the money that they need to take the development forward. I suspect that there are still question marks over the total cost given the uncertain nature of the land and facilities and even greater questions relating to the economy in the 2.5 years before building could actually start.
Our remaining area of concern about the new facilities is that we as yet have no knowledge of the huge public infrastructure costs which will be involved in getting services to the ground and particularly the huge costs in providing a proper transport system to an area that is relatively remote and which was last looked at in major infrastructure terms in about 1840.
This is a vitally important question. The quoted £500 million is for the stadium and its immediate environs but all of must understand that building a first-class stadium is useless unless the Stadium is connected to the world by the provision of all services but especially transport. There is no decent road system; rail system or transport system to get people to and from the grounds. One of the routes to connect that North Docks area generally to the motorway system is currently being examined in Manchester.
Of course, all these things can be provided but at what cost? As a rule of thumb the public sector needs to provide about 15% of the total build cost of the centrepiece to provide the wider infrastructure. In this case I suspect it will be more for two reasons. Firstly, I think the bill for the stadium will be more than £500 million and secondly because we are dealing with a relatively remote site and very old, and often unknown, existing infrastructure. But this is a cost of at least £75 million. Where will this come from when we don’t have access to EU funds of the European Investment Bank?
Lastly, what will happen in County Road? I am a little calmer about that than I was. I have been to talk to EFC and am currently arranging to go back with our Lib Dem councillor for the area Cllr Kay Davies. Everton in the community are clearly committed to that area and their track record is impressive. But the provision of new services and the revitalisation of County Road accompanied by the demolition of the existing stadium will cost money. Everton will, no doubt, put some cash in but some will need to come from the public sector. The amount and source of this is still in doubt.
Now we are not trying to be the key investor we can concentrate on these last two areas of concern. Both the City and the City Region Mayors have implied that the money will be forthcoming but have not begun to publicly quantify the amounts or where that cash can come from without draining resources from the rest of the City or the City Region.
I hope that the answers to these questions will be found and that we can have a sensible debate in the Council and Combined Authority about the choices that will need to be made.
In the meantime, I hope that we will all get behind EFC and take part in the consultation so that the people of the City as well as EFC supporters and shareholders.