The delivery of a £2.3bn Ukrainian aid fund raised from the sale of Chelsea FC has been delayed because of wrangling over where the money should be spent.
More than a year since sanctioned Russian billionaire Roman Abramovich sold the Premier League football club, the proceeds remain frozen in a UK bank account.
The delay has highlighted the different negotiating positions held by the government and a foundation being set up to administer the funds over where help should be targeted, which is slowing the passage of humanitarian aid.
One obstacle has been securing agreement over the scope of the foundation and whether it will be allowed to spend money outside Ukraine’s borders, according to three people with direct knowledge of the matter.
The UK government, which must approve the frozen funds being released to the foundation, says the money must be spent inside Ukraine, according to two of the people.
The foundation, to be established by Mike Penrose, a former UnicefUK chief executive, wants the flexibility to support refugees who have fled the war in Ukraine, the people said. It also intends to provide aid to other countries that have been affected by food shortages because of the conflict, they said.
Penrose told the Financial Times that how the money is used “depends on humanitarian need at any time” and stressed the foundation was rooted in the principles of “neutrality, impartiality, independence and humanity”.
“If the war were to change we would change with it, but we would start inside Ukraine. All our initial funding would be for Ukraine and we anticipate the majority will be spent in Ukraine,” he said.
“If we are supporting a Ukrainian child in Ukraine today, under the stipulations the government want to put in place, we’d have to cease support the minute they leave Ukraine,” said Penrose.
“We wouldn’t be able to help refugees in Poland or the UK. We wouldn’t be able to help some of the most vulnerable people in the world such as Somalia who are suffering from a lack of grain exports.”
One person with knowledge of the situation said Abramovich was contributing to the delay because he wanted some of the money to be spent on people outside of Ukraine, such as “victims of food insecurity”.
“That would look so much better for him than spending it on victims of Ukraine”, the person said, but added that senior figures linked to the foundation agreed the freedom to spend the money not solely on Ukrainians should be allowed.
The government “is anxious it doesn’t want to set a precedent that allows flexibility for [sanctioned] people to call the shots on how such money is spent,” the person said.
However, they added: “The idea the government has been the sole hold-up is not accurate”.
A spokesperson for Abramovich declined to comment. A person familiar with his thinking said the oligarch was following advice from the people in line to run the foundation and had given no direction on what to do with the funds.
The person said Abramovich had no power to influence whether the foundation was created, but needed a sanctions license to donate funds to it.
In a message on Chelsea’s website in March 2022, Abramovich said the foundation would be “for the benefit of all victims of the war in Ukraine”, including by providing “critical funds towards the urgent and immediate needs of victims, as well as supporting the long-term work of recovery”.
The foreign office said: “The proceeds from the sale of Chelsea FC are frozen in a UK bank account while independent experts establish a foundation to manage and distribute the money for humanitarian purposes in Ukraine. A licence application will then need to be made to move the funds to the foundation.”