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‘Flagrant abuse of public money’ – Tottenham face backlash – named among those using BoE scheme to take £175m loan

Tottenham and other dividend-paying companies have been slammed by MPs after opting to use the Bank of England’s coronavirus funding scheme to take a £175m loan.

Spurs faced a backlash not so long ago shortly after the pandemic hit the UK, as they decided to furlough non-playing staff while players continued to take a full wage.

While they eventually reversed that decision, it seems as though they are now facing a fresh wave of criticism over their decision to use the scheme after the Bank of England disclosed a list of companies using it.

As per the Financial Times, it’s essentially a form of low-cost borrowing and for companies borrowing before May 19, they won’t need to follow restrictions on paying dividends and cash bonuses to management and shareholder payouts if they intend to take money for over a year.

Naturally, the aim of the scheme for many was to help companies survive the pandemic and not prop up those who are still paying dividends and are not under the same level of financial stress.

Nevertheless, with Tottenham, British Airways, John Lewis and the National Trust specifically named as among those using the scheme, it hasn’t been met by the most positive of responses from MPs on both sides of the political spectrum.

“This sort of corporate behaviour is outside the spirit of our common endeavour and brings these companies into disrepute. When the reckoning comes once we are through this stage it will not be a happy one for companies that do this,” Andrew Mitchell, a senior Conservative MP noted.

Meanwhile, senior Labour MP Margaret Hodge added that it was “absolutely scandalous that so many large overseas companies have tapped up the UK taxpayer while handing out dividends to shareholders.

“This is a flagrant abuse of public money. [Chancellor] Rishi Sunak was supposed to stop this shameless behaviour but it seems his restrictions were too little, too late.”

Tottenham have borrowed £175m in response to fears that they may lose more than £200m in revenue from the start of the lockdown to June 2021, with broadcast rebates perhaps being the most impactful concern.

In turn, they have taken out the unsecured loan which is repayable in full next April at a rate of 0.5%, although they could redraw it for another year.

The club have insisted that it will not be used to buy new players, but if new signings were made this summer, it will surely only increase the level of scrutiny on the club who have really come under fire during the pandemic.

 

 

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