Colchester United will no longer face a salary cap

The limits on spending will now not be enforced, following a decision by an independent arbitration panel.

Colchester and their League Two rivals have been operating under a £1.5m wage cap this season, with the salary caps voted through by third and fourth-tier clubs in August last year.

The salary cap was set at £2.5million per club in League One.

However, the Professional Footballers' Association immediately challenged the caps, saying they were "unlawful and unenforceable", and an independent panel has now forced the caps to be withdrawn.

The panel ruled that the EFL was in breach of the Professional Football Negotiating and Consultative Committee's (PFNCC) constitution in introducing the caps.

The PFA said it looked forward to working with the EFL on "reasonable and proportionate cost control measures for the future".

PFA chief executive Gordon Taylor said: "We were disappointed that the EFL decided to introduce salary cap proposals, which were voted through without the proper consideration or consultation with the PFNCC.

"As a result, in August 2020, the PFA served a notice of arbitration on the EFL stating the introduction of the new rules were in breach of obligations under the constitution of the PFNCC. We are pleased the panel upheld the PFA's claim."

The EFL saw the caps as an essential part of ensuring clubs lived within their means, particularly given the pressure placed on revenues by the coronavirus pandemic.

The league's own statement confirmed that following the decision, the Salary Cost Management Protocol (SCMP) regulations that were in effect during the 2019-20 season had been reinstated.

An EFL statement added: "The EFL will now discuss the matter of financial controls and implications linked to this outcome at a series of meetings with its member clubs later this week."

The PFNCC contains representatives of the PFA, the EFL, the Premier League and the Football Association.

It must consider matters related to the rules and regulations related to the employment and remuneration of professional footballers.

The PFA's statement continued: "Like everyone involved in football, the PFA wants to see sustainable clubs at all levels.

"We also recognise the huge economic pressure that clubs have come under due to the Covid-19 crisis.

"The PFA believes it is now in the best interest of the leagues, the clubs, and the players to work together and agree on rules that promote financial stability."

Speaking last summer, U's chairman Robbie Cowling said he felt a salary cap could provide Colchester with a 'massive opportunity that they must exploit'.

Crucially for the U's given the emphasis they have placed on their youth set-up, the plans outline that player wages for those under the age of 21 would have been exempt from the caps.

Speaking last summer on the U's website, Cowling said: "The Covid-19 pandemic has caused many issues and will continue to throw many challenges at all football clubs no matter how large or small they are.

"However, there are always opportunities and some clubs will fare better than others. It’s my job to seek out those opportunities and exploit them.

"With it being highly likely that salary capping is going to be introduced, then that could provide Colchester United with a massive opportunity and it’s one we must exploit.

"The current levels being suggested as playing budget caps are £1.5m for League Two and £2.5m for League One.

"If salary caps are introduced at those levels, they will make those leagues a level playing field. But, potentially one that should be tilted in our favour thanks to our infrastructure, facilities and most of all our Academy.

"Can Colchester United be highly competitive in League Two with a £1.5m playing budget and everyone else capped to that same level?

"Can Colchester United be highly competitive in League One with everyone else capped to a £2.5m budget?

"If we get the Academy firing on all cylinders, then the answer is a clear yes.

"This coming season, and maybe even the one after that, will be difficult as clubs transition from their previous budgets down to the new salary caps.

"It’s also going to favour those clubs that have just a few players left on contract. Those clubs will be able to exploit the surplus of players who will be looking for a new club this season and sadly we are not one of those clubs.

"However, those advantages are short-term but our investment in youth is well established and the Academy we have built can provide players that are under twenty one years old and don’t count towards the salary cap.

"I’ve always been realistic about Colchester United’s prospects because I understand how important playing budgets are.

"Every season, one or two clubs out perform their budgets but they can’t sustain it over a long period. If every club has the same playing budget, and those that have invested in their infrastructure, facilities and youth have the upper hand, then happy days."