Phipps has reassured fans the money will be spent on improving their squad after seeing the fans favourite leave the club.
"The money is in the club. Let me set the Harry Maguire money straight," the Blades co-chairman explained in the Yorkshire Post.
"The fans have asked me a million times 'where's the £2.5m?'
"It's £2m, £1m this year and £1m next year. Then £500,000 in contingencies, based on appearances and that sort of thing.
"We will spend the £1m this year, probably this year, and the £1m next year, next year."
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