Football Governance Bill

Stephanie Peacock Excerpts

2nd reading
Tuesday 23rd April 2024 Commons Chamber

[Stephanie Peacock (Barnsley East) (Lab)]

I am pleased to be here to welcome the Football Governance Bill. Football clubs sit at the heart of communities up and down the country. Family, friends and neighbours come together to watch games, win or lose. While providing role models as well as infrastructure, football clubs also inspire the next generation of footballing talent across every town, village and city. At the same time, English football is world leading. English clubs have fans on every continent, and the players and managers they attract are admired from all corners of the world. That combination of local togetherness and global acclaim is the envy of many.

As the shadow Secretary of State set out, the Premier League and its clubs have contributed billions to the economy and supported more than 90,000 jobs. This worldwide success has seen bigger revenues than ever coming into the game. But despite that, the financial sustainability of the English football pyramid is at risk.

As my hon. Friend the Member for Luton South (Rachel Hopkins) member for Luton South just outlined, along with my hon. Friend the Member for Preston (Sir Mark Hendrick) and many others, too many fans are having their attention forced away from the pitch and into the troubles of malicious ownership, mishandled finances and poor management. That could be Bury fans, who witnessed their club being expelled from the football league almost five years ago or, more recently, Reading fans, who shared with me their deep concern over the future of their club when I met them just a few months ago. I pay tribute to my hon. Friend the Member for Reading East (Matt Rodda), and indeed the hon. Member for Bracknell (James Sunderland), for their campaigning work on this issue.

There are clearly structural issues in the pyramid that must be addressed. Indeed, the fan-led review shone a clear light on the issues within the game, and I pay tribute and thanks to the hon. Member for Chatham and Aylesford (Dame Tracey Crouch) for all her work. As my hon. Friend the Member for Weaver Vale (Mike Amesbury) noted, the debate is taking place on St George’s day, so I take the opportunity to wish the whole House a happy St George’s day.

I am supportive of the Bill and the principle of an independent regulator for football, with a strict and focused remit on the financial sustainability of the game and the ability to act with proportionality. Labour supports giving fans a greater say in their clubs, ensuring that owners and directors are stringently tested on their integrity, competence and financial soundness, as my hon. Friend the Member for Chesterfield (Mr Perkins) spoke about. It is also important to prevent any further attempts at a breakaway league, which puts financial gain before the all-important principles of competition and qualification based on merit.

In preparation for the Bill, I have met representatives from across the industry: from the Premier League and its clubs, the English Football League, the National League and the FA to the Football Supporters’ Association and supporters groups, including the Barnsley FC Supporters Trust. I know how important Barnsley football club are to my town, and I was pleased to watch them at Oakwell just a few weeks ago. While not everyone agrees on every detail of the Bill or with the shape that the regulator will take, there is a lot of agreement that English football offers something world-beating and special that must be protected for years to come. That is what I believe the Bill seeks to do, and I look forward to helping to shape it with careful scrutiny.

The regulator does not address all the issues facing football today, nor is it meant to, but some of those issues have understandably been spoken about in the debate. For example, my hon. Friend the Member for Cardiff West (Kevin Brennan) gave a thoughtful speech, and has brought forward a private Member’s Bill, on unauthorised entry to matches. His Unauthorised Entry to Football Matches Bill is a proportionate intervention, designed to ensure the safety of fans by creating a specific offence for those attempting to enter stadiums without a ticket, and it has my support.

Over the weekend, we all saw the news that FA cup replays will be scrapped. That has understandably featured in this debate, with a number of Members raising their concerns. I believe it was the wrong choice, and fans will rightly have questions about how decisions are made that affect clubs all the way down the pyramid. The magic of the FA cup is that clubs from right down the football league, and indeed some non-league clubs, can compete with those at the very top.

At the moment, however, grassroots clubs across the country are facing difficulties, while contributing so much to communities, as the hon. Member for Westmorland and Lonsdale (Tim Farron) said. The hon. Member for West Bromwich West (Shaun Bailey) highlighted how important they are to the football pipeline. The clubs in my Barnsley East constituency—Wombwell Town, Worsbrough Bridge AFC and Wombwell Main—all contribute so much to the community. Hundreds of young people and adults play there every week, but the latter two face flooding issues at their facilities. In the case of Wombwell Main, which I visited a few weeks ago, flooding is causing multiple game cancellations. That is sadly typical of grassroots football across the country, which provides the foundations for both players and fans.

It is right that the regulator is strict in scope, covering the financial sustainability of the top five leagues, but a big part of that is to give fans a meaningful say in their club. I would therefore like to hear from the Minister on the strength of the measures for fans within the Bill. There has been a lot of rhetoric about how football must be for the fans, but is the Minister confident that the Bill’s provisions will live up to expectations and give fans the voice they deserve? I welcome the contribution from the hon. Member for Gosport (Dame Caroline Dinenage), the Chair of the Culture, Media and Sport Committee. I thank the Committee for its work and the fact that it has agreed to hold a pre-appointment hearing with the new chair of the independent regulator once there is a preferred candidate in place.

My hon. Friends the Members for Sheffield South East (Mr Betts) and for Eltham (Clive Efford) both spoke about this issue, and I pay tribute to both of them for all the work in this area, as well as to my hon. Friend the Member for Liverpool, West Derby (Ian Byrne); I know there has been keen interest in the issue of the so-called backstop powers and the ability of the regulator to intervene in the distribution of broadcasting revenue throughout the pyramid. That is an unprecedented power and must be carefully crafted in order to achieve its aims. Can the Minister assure Members across the House that the regulator will be given all the targeted powers it needs to secure the sustainability of the pyramid, as per its primary purpose?

Given that players and staff at clubs are often the first to notice that the club is experiencing financial difficulties, and that their livelihoods will be directly impacted, it seems odd that they are not mentioned once in the Bill, as my hon. Friend the Member for Warrington North (Charlotte Nichols) pointed out. Can the Minister explain why that is? The hon. Member for Folkestone and Hythe (Damian Collins) also made some important points on that subject.

I ask for a little more detail on some of the work being undertaken to ensure that the regulator hits the ground running. For example, what progress has been made on the shadow regulator, and is there any more detail on how the expert panel, which will be responsible for much of the regulator’s decision making, will be appointed? My hon. Friends the Members for Ealing Central and Acton (Dr Huq) and for Manchester, Withington (Jeff Smith) brought up the issue of equality, diversity and inclusion in football clubs. It will be for the regulator to decide what is contained within the corporate governance code of practice, but that is one of the issues that I would expect it to consider.

Before I conclude, I would like to touch on women’s football. There is widespread agreement that placing the women’s game in scope of the regulator would not be right at this stage. The Carney review revealed a number of pressing issues in the women’s game, including poor pay, professional standards, mental health support and union representation. It is important that we take them seriously. It is crucial that we ensure the financial sustainability of the men’s game, but that should not result in resources being stripped from the women’s game. I would therefore welcome an update from the Minister today on what progress has been made on implementing the recommendations of the Carney review, and on the Department’s plans for protecting the future of women’s football as part of the Bill.

To conclude, I thank all those involved in the Bill: my opposite number, the Under-Secretary of State for Culture, Media and Sport, the right hon. Member for Pudsey (Stuart Andrew), the civil servants, the clubs and, of course, the fans. Labour has long committed to reviewing football governance. This is a once-in-a-generation opportunity to preserve the future of our nation’s favourite sport. We can and must get it right.

Football Governance Bill (First sitting)

Stephanie Peacock Excerpts

Committee stage
Tuesday 14th May 2024 Public Bill Committees

[The Chair]

We will now hear oral evidence from Kieran Maguire, senior teacher in accountancy at the University of Liverpool, and Dr Christina Philippou, a principal lecturer in accounting, economics and finance at the University of Portsmouth. Before calling the first Member to ask a question, I should like to remind all Members that questions should be limited to matters within the scope of the Bill. We will stick quite strictly to the timings in the programme motion, which the Committee has agreed. For this panel, we therefore have until approximately 10.10 am. I will give warning before this session finishes. Would the witnesses like to introduce themselves and say a few words before fielding questions from the Committee?

Kieran Maguire: Hello, ladies and gentlemen. I am Kieran Maguire from the University of Liverpool. I have specialised in football finance there for the last 11 years. Along with Christina, we have been asked to submit two research papers to the Department for Culture, Media and Sport; first, in respect of the state of finances of the industry during covid, and subsequently coming out of covid. I think we last produced a paper around 12 months ago.

Dr Philippou: I am Christina Philippou from the University of Portsmouth. I do a lot of work around sport finance and sport governance. Prior to academia, I was a forensic accountant.

[Stephanie Peacock (Barnsley East) (Lab)]

Q Good morning to you both, and thanks for joining us. By way of an opening question, the fan-led review of football governance concluded that the finances of many football clubs are fragile, which obviously puts them and their communities at risk. What do you believe are the sources of this financial difficulty?

Kieran Maguire: If we take a look at the history of both the Premier League and the English Football League, they have been successful in generating revenue. Since the Premier League was formed in 1992-93, its revenues have increased by 2,857%, whereas the Championship is at just over 1,000%. Given that prices have doubled, from a consumer price index perspective, that is absolutely fantastic. However, that has gone alongside an inability to control costs. The most significant costs in the industry are wages—while Premier League revenues are up by 2,800%, wages have increased by over 4,000%. Similarly, as far as the EFL Championship goes, if we take just one division, wages are up 1,400% compared with revenue of 1,000%. Profit is revenue less costs, and there has been a struggle to control costs.

As a consequence, if we look at the figures for 2022-23, which is a post-covid year—no ramifications—the 20 clubs in the Premier League lost a collective £836 million. In the Championship, on average the clubs were losing £20 million: League One, £4.1 million, League Two, £1.4 million; and in the National League, £970,000. All those clubs have been part of a spectacularly successful industry, of which we should be proud. It has globalised the game of football as coming from the UK. There has been a collective inability to control costs.

Dr Philippou: That summarises it pretty well. There is a general issue in relation to that, apart from that of cost control. We have also seen lots of administration, which has impacted on local communities over the years. Roughly two in five of the clubs in the top four leagues have gone into administration in the last 30 years, which is not a great stat. If we look at the post-covid years, as Kieran said—even putting into perspective what is happening at the moment—average losses in the Premier League were about £42 million, compared with its own cost controls, which are roughly £35-million losses per year. If we look at the Championship, it is roughly £20-million losses, where its own cost control saved around £15 million per year. Even by their own standards, they are not doing particularly well.

[Stephanie Peacock]

Q The licensing system in the Bill focuses on the financial sustainability and governance of each individual club. Do you think that that will help to mitigate some of the more systemic weaknesses in the football pyramid that you have outlined, or do you feel that some of the issues will remain?

Kieran Maguire: As far as the potential changes are concerned, the ability to have a regulator which can do real-time monitoring in respect of finances, so that it can identify potential problems at an earlier stage, would be beneficial. That would diminish the chances of a club getting into a more long-term financial crisis, where the only solution would be administration. The ability to have a regulator with a set of financial rules and observations, where you can nudge people in the right direction—I do not think that the regulator should be telling clubs how they should behave, but should be able to help the club itself to identify problems—would be beneficial.

Dr Philippou: Absolutely. Another strength in the Bill is that you can request information. One of the issues we have seen, which some of the leagues also struggle with, is the ability of the clubs to provide information in ways that are accessible and usable. That is something in the Bill which should help.

[Stephanie Peacock]

Q How would you say football compares with other industries in terms of its funding model? Are they more reliant on owner funding, and if so what impact does that have on clubs?

Kieran Maguire: Owner funding is critical. We have ended up with the scenario where many clubs are what one could describe as trophy assets, where the ambition of the owner is not one of profitability but of soft power or kudos—the ability to say, “I own a football club”. Some of those owners are fantastic, as they want to repay the local community, which they have been brought through, and they have turned out to be successful. We tend to see commercial banks being reluctant to lend to the football industry because of the level of losses that we have previously described. From a lending position, a bank would always do a risk assessment in respect of any moneys that would be forwarded. My background, before going into academia, was as an insolvency specialist, and I did one or two investigations into football clubs where the bank’s response was: “We don’t want to be seen as the bad people in making this decision.”

[Stephanie Peacock]

Q Do you have any information, or any views, that you can share with the Committee on what percentage of revenue clubs should spend on wages in order to be sustainable versus the percentage that they actually spend? To elaborate on that, are there any trends on overspending, and does that vary across leagues and clubs?

Kieran Maguire: Since the inception of the Premier League, the original wage-to-revenue percentage was around 45%, but that has now increased to the mid-60s. If we take the EFL Championship, for 10 years out of the 11, wages have exceeded revenue. Before they invest in the transfer market, before they switch on the floodlights, and before they put petrol in the mower, clubs are already losing money. Unless there is owner funding, there is no logic in keeping those businesses running, but football is a unique industry. If I was running a nightclub, a garage or a launderette, I would simply have closed the business down.

Dr Christina Philippou: More than half of the clubs in the top five leagues are technically insolvent, so if they were any other business, they would not be in existence. The fact that they are still standing is partly linked to how monopolistic the structure is. Obviously, fans find it quite hard to move from one club to another, and clubs tend to be a bit more resilient in keeping the fans than other businesses. However, that also has the knock-on effect of it being very community-based, and there are further knock-on impacts when those clubs go into administration.

[The Chair]

Stephanie, if you have any other questions, I will bring you in a bit later. There are a lot of Members who have indicated that they want to ask questions.

--- Later in debate ---

[The Chair]

Welcome to the new panel. We will now hear oral evidence from: Rick Parry, Chair of the English Football League; Richard Masters, Chief Executive of the Premier League; and Mark Ives, General Manager of the National League. For this session, we have until 11 am.

I call the first Member who wishes to ask questions, Stephanie Peacock.

[Stephanie Peacock]

Q Thank you all for joining us. The reason we are here is that self-regulation of football has not worked, particularly in relation to financial sustainability. Obviously, therefore, the Government have introduced this Bill, which we support. One of the key parts of the Bill is the owners and directors tests. Do you think that the current owners and directors tests are fit for purpose? Does the Bill improve them? Will you continue with your own owners and directors tests when the regulator is conducting their tests? Those questions are to each member of the panel.

Richard Masters: We obviously support very strong ownership tests; we believe we have one at the moment. With the Bill, in terms of the way it describes the owners test, I think there are a lot of questions that still need to be asked and we may ask them in our written submission to this Committee. Thank you very much for giving us the opportunity to speak to everyone today and to put our perspectives across.

We very much support a strong ownership test. The question about whether it has been successful—I believe it has been more successful over time. Obviously, an ownership test is relatively new in football. Football has been around for centuries; the ownership test is a relatively recent intervention. Football has responded to issues—regulatory issues—as all regulators do. Football is already a highly regulated industry. We—the Premier League—are already regulated by the FA, by UEFA and by FIFA, and we are a regulator ourselves. So, the Bill and the new independent regulator for football are going to be an additional regulatory layer.

In all of our discussions with the Department for Digital, Culture, Media and Sport, we have been quite clear that we would like to continue with our own test and obviously the closeness of those two tests is quite important, and the consistency of results that come out of them is quite important as well.

When you read the Bill, one of the things that you probably notice in comparison with the Premier League’s current test, which is very similar to that of the EFL, is that it will probably capture a broader group of people and it is more subjective. One of the things that we have been quite careful about over the years is to make sure that the test is as objective as possible, because that creates more certainty and less legal challenge. We would like the Committee to think about that as they observe the Bill and to give as much clarity as possible to competition organisers on the issue of ownership.

Rick Parry: Where the regulator can help is in bringing greater transparency. Football does not do transparency very well; it likes to live in the dark. Greater consistency across leagues and statutory powers will be extremely helpful in terms of capturing information. The threat of criminal sanctions for failing to comply is pretty potent and pretty powerful—something we cannot compete with.

We will certainly not be having a parallel test; we do not want duplication. We are very happy to throw our support behind the regulator and recognise that a better test is something that we will be very happy with.

Mark Ives: First of all, thank you for allowing us to be here today; I appreciate that.

From an owners and directors test point of view, we are—from the National League—in a slightly different position than our colleagues in the Premier League and the EFL, in that the National League is governed by the FA regulation for the owners and directors test. I have spoken before about the powers that this Bill will bring with the ODT and I welcome that. I think it will give us, or give you, greater ability to be able to get access to information that we do not have. Although the current test is being reviewed from the FA’s position, it is primarily a self-assessment, which, of course, comes with many problems. I welcome the owners and directors test. I would urge Government to ensure that speed of operation is good, because the time it takes to get somebody approved is really important for takeovers and everything else.

The other challenge with the ODT relates not only to when owners come into a club, but to the question of when, during their lifetime within a club, their suitability changes. We need greater detail on how that will look. When does someone who is a good owner at the start of their tenure suddenly turn out to be a bad owner halfway through that tenure? Of course, it will be difficult, once somebody is in, to make a substantial change—not impossible, but it will be difficult. We need to think how we manage that from a National League perspective. We do not have a queue of people waiting to take over clubs, so we need to think about the consequences of the test on existing owners. Again, I would share the views that the leagues’ action to sense-check that as we move forward and make sure that clubs are compliant is really important.

[Stephanie Peacock]

Q Communications from the Premier League have stopped short of outright rejecting the Bill, but have warned against unintended consequences. Could you outline what those unintended consequences might be?

Richard Masters: I will do my best—thank you for the opportunity to do so. In general, I think we are supportive of the objectives of the Bill, and we want to see those objectives work. We are obviously concerned that what is, to all intents and purposes, a very successful industry is not harmed. It is very important that the Premier League, at the top of it, is able to continue with its success and growth—not just for the sake of the Premier League, but because that success and growth helps to fund the rest of the pyramid. We are happy to share our success, and we have a strong track record of doing so.

We would like this Committee to look at the unintended consequences of regulatory interventions that are unnecessary—proportionate regulatory interventions dealing with the issues that are arising. To use a motoring metaphor, we agree that if you are speeding, there should be regulatory tools to intervene, but we would not want to see the speed limit reduced from 70 mph to 50 mph to keep everybody safe. We think that would be a step too far.

As Mark alluded to, our core concerns are always about increasing the pool of investment that comes into football. The Premier League is successful because it has been able to create an atmosphere where people want to invest and buy football clubs and put their money behind the aspiration of moving up the pyramid. We see examples of that all the time, and we think that is really important. We need a strong and vibrant pyramid. To us, it is about long-term certainty and proportionate intervention. If those things are not correct, we might see some of the unintended consequences that I have explained.

[Stephanie Peacock]

Q Do the Premier League’s own rules not specifically address the way money is invested into clubs? What is different, therefore, about the regulator monitoring this?

Richard Masters: The Premier League has a number of financial regulatory tools at the moment, such as our PSR regulations, which you will all be aware of. They are really about competitive balance, but also have an aspect of sustainability to them—essentially a limited loss situation. Where clubs are loss making, they have to provide two years of financial information to the league, and if they are loss making beyond a certain threshold, they have to stand behind the business plan of the club and provide a secure owner funding commitment to the league. The Premier League does have sustainability rules in place, as do the EFL and the National League. Perhaps it would be good for the Committee to hear about how all that works. There are measures in place, but they will be different.

What we are seeing in the Bill is prudential regulation, which is born out of the financial services industry—obviously there are not many parallels between banking and football. We are worried that prudential regulation could be too interventionist and could tie up or deter investment to the detriment of the whole football pyramid.

[Stephanie Peacock]

I have one more question for all three of the panel.

[The Chair]

I am going to move on to the Minister, as we are going to be short of time.

--- Later in debate ---

[Stephanie Peacock (Barnsley East) (Lab)]

Q Good morning, and welcome. The FSA has been lobbying for significant reform to football governance for years; do you think this Bill meets the challenge, and do you think it lives up to the fan-led review? As you have just referenced, you have had significant input into that.

Kevin Miles: The succinct answer is, generally, yes. We are very supportive of the Bill and the reforms it sets out to achieve. We sadly drew the conclusion a few years ago that football has proved incapable of regulating itself, and it is interesting to hear Rick Parry drawing exactly the same conclusion.

We very much support the establishment of the independent regulator and the three primary objectives of sustainability, resilience, and heritage. There is a lot to like in the proposals—the enhanced owners and directors test; the club licensing system, which we think is proportional and puts advocacy first, which is a positive approach; the oversight of financial distribution; and the backstop powers which, indeed, I think are very important. Clearly, as the national fans’ organisation, we are also particularly pleased to see the provisions requiring clubs to meet the fan engagement threshold. We do have some concerns about the strengths of those requirements, and we think perhaps the Bill is not perfect, but that is part of the process, and is why we are here.

I would like to say that we have been involved in discussions with DCMS officials and ministers in preparation for this, and I would like to take the opportunity to pay tribute to their work, particularly the officials. Ministers are wonderful as well, but the team at DCMS have been excellent in their rigorous examination of all the points that we put forward. Their response has been—where necessary—challenging and combative, but it has been thorough and very well-applied, so thanks to them.

[Stephanie Peacock]

Q I am sure that your thanks will be much appreciated, and is echoed of course by the Committee. On the point about fans, I have some questions on that, about whether you think the measures are adequate enough. Do you think the Bill carves out enough space for the existing supporters trusts, and could you share a little about the value of those trusts with the Committee?

Kevin Miles: I do think it is important that supporters trusts, their role and their position are recognised in this process. We are not expecting exclusivity for supporters trusts as the vehicle for fan engagement, but we do think that those trusts—based as they are on one-member, one-vote, and themselves regulated through the Financial Conduct Authority—are effectively reflective of fan engagement when it has not always been welcomed by clubs but been deemed necessary by fans. This is self-organisation by fans on a democratic and constructive basis.

Those organisations have earned their spurs; that was not a football team reference, by the way. They have done the preparatory work, and made large contributions to the process of the fan-led review as well, and it is important that the existing supporters trusts do have that recognised, and are taken seriously. It is important that the fan engagement process, as it is developed under the oversight of the regulator, is not used by clubs as a means of sidelining supporters trusts and the work that they have done. They need to be included and involved in that process.

[Stephanie Peacock]

Q Are there any particular topics that you would expect fans to be consulted on but that the Bill does not require?

Kevin Miles: We have had a long discussion with officials about exactly what the scope of engagement with fans should be. We think the fan engagement regime needs to be robust, it needs to be appropriate to the circumstances of all the regulated clubs and it needs to be based on democratic principles, with the composition of the fan representatives being determined independently of the clubs themselves. We have had some conversations about what the particular terms of the content of fan engagement should be and we have been talking to officials and Ministers about that. The list includes strategic direction and objectives of the club, the club’s business priorities, operational matchday issues, the club’s heritage and the club’s plans relating to additional fan engagement. That is as it currently stands.

When we have asked officials about specific examples of that, they have come back, for instance, on ticket pricing, saying “We expect those to be included in business priorities and operational and matchday issues.” However, there is currently a set-up in the Premier League of fan advisory boards that are required, under the Premier League’s rules, to engage with clubs. It seems to officials in the DCMS, as a matter of common sense, that ticket pricing would be one of the things that fans would discuss with their clubs. It seems to me a matter of common sense that ticket pricing is one of the things that fans would discuss with their clubs.

Yet, in the Premier League system, our members tell us that at Newcastle United, the fan advisory board was given three days’ notice of the ticket price increases without any consultation. At Fulham, there is no fan advisory board, but the supporters’ clubs there got four hours’ notice with an embargo before the announcement of ticket price increases. Nottingham Forest announced its prices without any discussion with its fan advisory board or the trust. Similar representations have been made to us about similar experiences at Bournemouth, Tottenham, Arsenal and Liverpool. That is happening already, and that is why we think that perhaps it would be useful to have in the Bill the additional words “including ticket prices”, just to make it explicitly clear.

The general point is that there is a lot in the Bill that depends on the view the regulator takes about what is included and the guidance that is given to the regulator. We would appreciate really strong statements from Ministers in the course of this process. That might help us to avoid the necessity of amending the Bill, but a strong direction from Ministers about what should be in scope and what is required of fan engagement to fill some of those gaps would be really useful.

[Stuart Andrew]

Q First of all, thank you, Kevin, for what you said about the officials. You are absolutely right; they have been superb throughout this whole process. Thank you, too, for your engagement.

I remember when I was first appointed, the first meeting I had was with you and with other fans. It was clear from that meeting that some clubs do engagement extremely well and, as you have just alluded to, there are others that do it differently. Given that fan engagement is part of the licensing regime, do you think that that is going to be sufficient to bring about a significant impact on the quality of fan engagement that we are currently seeing across the board? That is, are we levelling up, to coin a phrase?

Kevin Miles: I very much hope so, and I am optimistic in that regard. It is the first time that we will have had a requirement from clubs to engage with the fans and, to use the Prime Minister’s words, to put the fans’ voice “front and centre” of all those discussions. I do think, though, that there are a lot of details still to be worked out about how that actually looks.

There are some clubs, as you say, that are very good, but one of the illustrations of the limitations of self-regulation has been that when the leagues have been trying to put together their own requirements on fan engagement, because it has to be voted on by their members and agreed by their rulebook, the lowest common denominator tends to be put into the rulebook. We know that there are clubs that will resist the idea. There are owners who think they have nothing to benefit from in listening to the fanbase—their customer base, if you like. We know from experience that there are some who will do everything that they can to get around this. We will need to have an underpinning of that in the regulatory system, and some monitoring of it through the club licensing system. We recognise that this is challenging, because it cannot simply be a look at what structures are put in place. The regulator will have to do more than just monitor that there is a fan advisory board notionally in place. There will have to be some evaluation and examination of the content and spirit of the fan engagement. We are not expecting a fan veto on club decisions, but we are expecting that the fan voice is not just heard but listened to and given due consideration.

Evaluating that is a more complex process. Somebody referred earlier—I think in the first witness panel—to the possibility of Ofsted-type investigations. Maybe in some cases it will require the regulator to be able to consult the fan groups to see how they think it has been done, and to make its own evaluation about whether the spirit of what is intended here is actually being carried forward. That will need to be underpinned by requirements in the licensing condition.

Football Governance Bill (Second sitting)

Stephanie Peacock Excerpts

Committee stage
Tuesday 14th May 2024 Public Bill Committees

[The Chair]

Before I ask Members to put any questions, I declare an interest: I am the patron of my local football club, Southall football club.

[Stephanie Peacock (Barnsley East) (Lab)]

Q61 Thanks for joining us. By way of an opening question, do you have any thoughts or views on the regulator and its establishment? If a steer is helpful, what would or could the regulator do to ensure that clubs such as yours feel supported in a transition to regulation in this fashion?

Steve Thompson: In my opinion, I am worried about clubs at our level being over-regulated. Most of our clubs work on one or two full-time staff. Some of them are run by volunteers. We already do an awful lot of financial regulation reporting. There is reporting to the National League and a licensing certificate that we get from the Football Association. Many of us took advantage of the Sport England winter sports loans. The quarter reporting on that—I appreciate that it is public money—is so onerous, and I am really worried that the extra reporting that will be required by National League clubs will be more than a lot of them can manage without taking on extra staff.

There is also the cost of the regulator. We are not 100% certain how much a National League club will have to pay for their contribution. Those are some of the concerns with the set-up of the regulator. The support we need is a better understanding of how that will work.

Darryl Eales: I agree with Steve. I think this is about proportionality and reflecting the resources available to clubs at our level. That is simply because we do not have the financial resources or the distributions from central funding that, obviously, English Football League clubs have to support the growth of an administrative function to support the information requirements of the regulator.

[Stephanie Peacock]

Q On the point about proportionality, do you think the Bill does enough to emphasise that the regulator’s approach will be proportionate and will attempt to understand the specific circumstances of clubs playing in the National League? I think you both mentioned that point, while Steve Thompson made the point about funding. How important is it to you that National League clubs can pay a lower levy than those in the upper divisions, and does the Bill go far enough to reassure you of that?

Steve Thompson: It is imperative that the amount in fees charged to National League clubs is really proportionate, for example, between us and English Football League Two clubs. They receive 14 times the amount that a National League club receives in central distributions and solidarity money. Leaving aside the central distribution—because it could be argued that that is what the league itself raises—with the Premier League solidarity money, last season an EFL club received £519,000 each whereas a National League club received £69,000. Next year, the Premier League solidarity money for an EFL Two club will go up to £550,000; for a National League club, it will stay at £69,000—that is an eight times difference.

When Dame Tracey set up the fan-led review, I was lucky enough to be on one of the calls to present on behalf of National League clubs. One of the things that clubs at our level want to get out of this is a better financial package. The gap is going from seven and a half to eight times; we should be reducing that, not increasing it.

The other thing that the Bill does not address completely is three up and three down, and artificial pitches. As far as I am concerned, the majority of my supporters and people around my club believe that the regulator is going to deliver that. I understand why it is not in the Bill, because there are bigger things, but there is definitely a perception from supporters that three up and three down will be on the table, and artificial pitches will be allowed into the Football League. It is not there.

In the last three years, we have had three clubs promoted that had artificial pitches, and another one with Bromley this summer. Those pitches have mainly been funded by Football Foundation grants. They have been put in to support their local communities, and they have got to be ripped up. What a complete waste of money. It deprives their communities of those pitches.

With three up and three down, Darryl will speak for himself, but unfortunately last week Solihull Moors lost out in the play-off final. We have one club going up automatically and then another club—it is the only league in the pyramid where that happens. Last season—or the season before the one just finished—Wrexham won, and Notts County went up via the play-offs. Had they not won the play-offs—they nearly did not get to the final—they would have not gone up, and they had over 100 points. That would never happen anywhere else in the pyramid, but it happens in the National League.

The problem we have is that the last time a second promotion place was given was 2001. Some of the Committee might be old enough to remember that that was related to the ITV Digital collapse, when the FA stepped in and paid an extortionate amount of money to keep League One and Two clubs running. In return, we were given a secondary promotion place. My opinion is that we will only get a third promotion place if someone buys it. The only people in football these days that can buy it are the Premier League. That should be a condition of any new solidarity funding between the Premier League and the EFL. Sorry—I am talking too much.

Darryl Eales: To pick up on what Steve said, having read the Bill, for me there is not enough focus on the regulator contributing to ensure that there is a level playing field across the pyramid—I do not even think the pyramid stops at the National League—and there is not enough focus on the crucial value of grassroots football to the whole pyramid and to communities. One of my friends runs a step nine team, and it costs him £50,000 a year to run that club. We get £60,000 a year of solidarity money in the National League.

For me, the regulator has to understand the philosophy of English football and the value of grassroots football. That seems to be missing. Obviously there is regulation, but it needs to understand that most owners at our level are stakeholders for fans and just want to move the club forward sustainably to the next owner. I would question the ownership motives of a lot of owners as you go up the pyramid, because we strive every day to look after the best interests of our clubs and generally we are not paid.

[Stephanie Peacock]

Q I am aware of the time, because I know others want to come in, and I think that you have touched on what I am going to ask. Could you share with the Committee the sort of connection that your club has to the local community and fans and how important it is that your club listens to fans? Indeed, how does it carry out that listening?

Steve Thompson: We have a fan representative on our board; the season ticket members elect a representative on our board, so I hope that we try to be in tune. We have at least two fans’ forums, where anybody is invited along and they can ask questions of me and of the manager. But at a small club, you are walking around the ground and the bars before and after the game and talking to people, and if there is a problem, they soon come up and tell you.

Darryl Eales: Similarly at my end, we have a monthly meeting with the SMSA—Solihull Moors Supporters Association—and we work very closely with them. From a personal perspective—this is just me—I go for a beer before every game, both home and away, with the fans in the bar, exactly as Steve says, because people will pick up on their concerns. From a community perspective, we run about 65 youth and junior teams; every weekend, they are running around in Solihull Moors shirts.

[Shaun Bailey (West Bromwich West) (Con)]

Q I want to touch more on the point about the proportionality of the Bill. I am looking at the part 5 duties. Do you think that this strikes a balance between regulating clubs like yours and making sure there is a framework, and allowing you to run your clubs in the way you need to? Darryl, if we take Solihull Moors as an example, you are a club that has come out of a merger, effectively, with other clubs and you have had to be agile in how you have done that. If you look at the journey you guys have been on, how do you think that you would have been impacted if this framework had been in place at the time?

Darryl Eales: The interesting thing for me is that the Bill does nail a few points that are very, very important from my perspective. The stadium and the club should be umbilically linked. There should be, for every club, something that prevents owners from separating out the ownership. In our division this year, Gateshead did not make the play-offs, because they did not have tenure of their ground. To me, that seems to be fundamental. Where I echo Steve is that I think there are an awful lot of information requirements in the Bill. When I talk about proportionality, the reality of life at our level is that it will be us doing those things, and without being too rude, I have better things to do with my life than fill in forms.

--- Later in debate ---

[The Chair]

Q We will now hear from Ian Mather, the director of Cambridge United football club, and Sharon Brittan, the chair of Bolton Wanderers football club. We have until 3 pm for this session. Will the witnesses please introduce themselves for the record?

Ian Mather: Hello. I am Ian Mather, and I am the director of Cambridge United. I was on the board in 2018, and prior to that I was a solicitor in private practice for 35 years. In that time, I spent a period doing insolvency work, which was good training for looking at football. I became chief exec in 2019 on an interim basis while we did the change of ownership, and we moved from 705 owners to one. That was meant to last for a season but then covid hit. I stayed for another season, and then we got promoted, so I stayed for another one. I have a good insight into how the world of football works and the economics of football.

Sharon Brittan: Good afternoon, everyone. I am Sharon Brittan, the chairwoman of Bolton Wanderers football club. I came into football five years ago, having only been in the game from the perspective of being a fan of Burnley football club all my life. I had not worked in football before. Prior to that, I worked in industry, which I still do alongside football.

[Stephanie Peacock]

Q Thank you, both, and good afternoon. Do you believe it costs more to remain competitive in League One this season compared with previous seasons, and if so, by how much? What are the reasons behind that, and what are the long-term effects that they might have on your club?

Ian Mather: I can give you a real-time answer to that. We are currently at the point in the season where contracts come to an end and we renegotiate new contracts with players. Without giving you the names of individuals, the pressure is on for a 30% pay increase for players who have been under contract for two years. That is a sense of entitlement. Where is that coming from? It comes from the level of money in the football league above us, which has a wash-down effect.

I will specifically address the point of parachute payments: if you pump £100 million into the top of the pipe, that is bound to start appearing at the bottom. Therefore, the pressure on us, as a League One club, is ratcheting up each season. We were in League Two in 2019-20, and every year since we got promoted, the owners are being asked to pay more money. We have a brilliant lead owner, Paul Barry, who is absolutely Cambridge United through and through. He went to Seattle and made money through a business, but he loves Cambridge and will be there any time he can be. His mum and his brothers are season ticket holders, and he supports the foundation in Cambridge.

As Cambridge United, we are in one of the poorest parts of Cambridge. If you follow the inequality of the UK, the Gini coefficient says that Cambridge is the most unequal city in the country. We are in the poor bit, and our owner really wants to do what he can to help that community, and we do loads. However, the effect of consistently having to put more money into the hopper to have any hope of staying in League One—and then staying in League Two—is just more and more pressure. The risk is that it affects the owner model, which is broken. If our wonderful owner were to move on, which is unlikely—it is more likely that his heart gives out under the pressure—who will replace him? In 2019, 2018, we were looking at alternative buyers for the football club, because Paul was not sure at that stage if he could commit the whole lot; I would describe them largely as tyre kickers and property speculators, and we had had enough of those.

The club went into administration in 2005 because it was badly run, but a lot of people out there are interested in owning football clubs for the wrong reasons. We have an owner who really wants to own it for the right reasons, but increasingly revenue does not equal cost, and that gets bigger and bigger and bigger each year. On your point, if that carries on, eventually it is our owner or some other good owners who will say, “I cannot do it any more.” We then populate our football world with owners who are not motivated in that way.

Sharon Brittan: Can I give you a bit of preamble before I answer your question, if that is all right? I came into football five years ago for two reasons: one, because I love the game, and two, because I wanted a platform to do good. Having worked in industry, I wanted to come into football and run a football club the way that I work in business, which is by having the right people in the right way doing an honest, transparent job and coming together as a team and about the impact that that would have on the community.

I cannot explain the pitiful situation that I walked into at Bolton Wanderers in 2019. The previous owner had left the club—I cannot even say on its knees, because it was beyond that. There were staff and people in the community who had not been paid and were eating from food banks. People had not paid their mortgages or their rent. Their mental health and wellbeing, which I do a lot of work in, were beyond catastrophic. I have seen at first hand the impact of having the wrong owners at football clubs and the effect that that has on the community. I have worked with Rick Parry over the last five years, and I cannot stress enough that the owners’ fit and proper persons test must be stringent.

Football in the UK changes people’s lives. We have the ability, as owners of these football clubs, to make change, give people hope and help them. More so than ever now, even since I came into the football club, people have very difficult lives, and it is about not just money and what we must pay in League One as the salaries, but the impact that the whole football pyramid has. That is why the financial distribution must be fair to give us as owners the opportunity to continue the work that we are doing. I still go into Bolton on a Saturday afternoon and have grown men crying to me, “You saved our football club. God, my family and you are up there with what you have done.” It is not just for the 300,000 people in Bolton: there is a wider impact than that. As good owners, a good owner will work with another good owner to ensure that that extends out further.

I am sorry that I am outspoken, but I work in an honest, transparent way with a good, clean heart, and people need to do the right things. This is a pyramid. It is not just the Premier League: it is the Premier League, the EFL and the National League. It is a travesty that it has got to the stage where all you very important, hard-working people must be involved and spend your time dealing with this when the football authorities have been unable to resolve it themselves. I am sorry to go on, but I have been at the heart of it for five years, and I am passionate about where this is going. The pressure has got higher and higher and higher in terms of what we must spend to remain sustainable.

Bolton is a big club, but I love sporting jeopardy; I think it is brilliant. I think the pyramid is absolutely brilliant. The promotion and relegation all add to the excitement, but the financial distribution will make a difference to every single club, regardless of its size. We have to seriously consider this if we get promoted on Saturday. I am a custodian of the football club—that is clear. This football club is owned by the fans, and to keep fans happy is a full-time job. I have to trust the fans—I work with them, I am there day to day, on the ground, with the fans on a Saturday afternoon. I also think that British owners understand English football—I was brought up in English football from zero to now—but we are losing that as well. That is another conversation, but we are losing that as well. But yes, it does cost more and more.

[Stephanie Peacock]

Q I have one more question, but first a brief supplementary. Thanks for both your answers, but given the experience in Bolton in the past five years that you outlined —I think you used the phrase “dire circumstances”—what more could the Bill do to support your club in those circumstances?

Sharon Brittan: All I would like the Bill to do is to bring in—it is just about doing the right thing. It is not even complex. That is what baffles me; it is actually relatively simple to do the right thing. Let me give a brief example: I have five original investors in Bolton Wanderers, who have bought into this journey and have done incredible things, supporting me as the chairman all the way. If we get promoted this Saturday, if we get into the Championship, everyone—our fans—will say, “It’s incredible, marvellous, wonderful—just fabulous!” and we will move into a world where it is not a competition any more. How can we compete with the clubs that have come down from the Premier League and have the Championship payments?

I am hugely respectful of money. I would have to go back to our investors to say, “We need £20 million a season to try to be competitive”—but we would not really be competitive. If you look back over the past six years, the chances are that you will see that the three that have come down, because they have the parachute payments, go straight back up. I want to go higher up the pyramid; the higher up the pyramid I go, the more good I can do for this country, the more impact I can have and the more I can help people who are less fortunate and who need help.

For me, the question is: do I get to the Championship? I have to be responsible to my investors. I have to be responsible to the fans who, if we are not competitive, will not be happy. When I moved to Bolton, the fanbase was finished, it was over, and now we get 25,000 coming to the home games, so you can see the impact of running a club properly and where that gets you to. But my dilemma is, do we continue in the Championship when we know that it will cost us £20 million a year? That £20 million a year could be put to doing other, really good things. I have to be a responsible human being and decide, “Do we want to remain there? Do we want to take that risk?” but it is impossible to take that next step.

[The Chair]

With respect, we have many questions, so may we have brief answers?

Ian Mather: I have a very short response: we need better financial distribution, and rules that bite to stop money being wasted through the game, so real-time regulation.

--- Later in debate ---

[The Chair]

Thanks.

Tony Bloom: I will be quick. The point is that there is no doubt that the club almost went out of existence because of what happened. The owner of a football club should not be allowed to sell the stadium.

Steve Parish: I am Steve Parish, co-owner of Crystal Palace Football Club and also the chairman. Fourteen years ago I bought the club out of administration. It was its second administration in a period of 10 years. Since then we have been fortunate enough to have a level of success against what I think everybody agrees is a difficult backdrop and industry, where for some to do well others, unfortunately, have to do badly. It is very enjoyable, although as Sharon pointed out it is also very stressful. It is very much about the local community and the fans who we serve.

[Stephanie Peacock]

Q Good afternoon to you both: thank you for joining us. One of the factors that led to the fan-led review and, indeed, the Bill, was the European Super League proposal. Had that been successful, what would the impact have been on your club?

Tony Bloom: The Super League was a dreadful idea; in my opinion, it never had a chance of being allowed to go forward in this country. Apart from the owners of the six English clubs—it is different on the continent, where there was a bit more support—everyone was dead against it. Even the fans of the clubs by and large were completely against it: it never had a chance. I do not understand it, apart from not wanting to miss what they thought was the gravy train. It would have been terrible for English football and for Brighton and Hove Albion Football Club. Because of what those six clubs did, it has brought a bad name to the Premier League, which is such an amazing product. It certainly does not help clubs like mine.

Steve Parish: We believe that the effect of it on the Premier League would have been catastrophic as the top four positions would not really have mattered. The race to the Champions League and relegation are obviously the two things that preoccupy most football fans, and obviously there is the Europa League and other things as well. However, if there was no consequence to getting into the top four—in fact, if you could finish 10th and still qualify for a European competition—that would obviously make a mockery of all the domestic leagues and the whole meritocracy of football. Sadly, that still goes on.

A stealth version of the super league is gradually coming into operation. If Aston Villa are fortunate enough, as it looks like they will be, to qualify for the Champions League, which would be fantastic for all of us and for football, they will not enjoy the same money for doing exactly the same thing in the Champions League as an Arsenal or a Liverpool will, because the amount of money you get is based on your five-year performance.

We are constantly fighting to have a meritocracy. As the manager of Atalanta said when they succeeded in Europe, seeing a club like that that does not have the fanbase or fan size do well gives hope to all the clubs, but there is a continuing move from clubs in Europe to pull the drawbridge up and create a permanence around qualification for Europe, which is something that we all have to be careful of.

[Stephanie Peacock]

Q In posing my second question, I would like to preface it with quotes from you both. Tony, in 2022 you told The Athletic:

“Not a lot irritates me in football...Maybe the governing bodies of FIFA and UEFA, who both regulate the game but also run tournaments. There’s a big conflict there.”

Steve, in 2023 you were reported as saying:

“The people organising the tournaments and the people regulating them, and taxing those tournaments for the greater good, should be two different people.”

In the context of those quotes, are you pleased to see an independent regulator established that can help regulate football finances without a conflict of interest?

Tony Bloom: I was talking with FIFA and UEFA because they are always looking to create more tournaments and more revenues for themselves, such as the FIFA club championships. They were looking to have a World cup every two years. UEFA now have an expanded Champions League, which is in direct competition with the Premier League.

The domestic competitions are of the utmost importance to the country and to domestic football in this country, although the other ones are fine. What I think is absolutely wrong is that they regulate the game, yet they can distort it against the interests of the domestic fixture list and the domestic tournament. The FA is not looking to do that. It has one tournament—the FA cup. The FA works very well with the Premier League and the Football League in terms of that tournament, so they are very different things. I was talking about UEFA and FIFA, and for me that does not relate to the FA. That is why I do not think that the two things go hand in hand.

If you are asking me about a regulator, obviously a regulator is coming in. From my point of view as an owner of a football club, I am concerned about a lot of things. I do not think that anyone in industry is a great fan of having external regulation. If it is light touch and on things about sustainability and ensuring that clubs cannot sell stadia, their chance of going out of business is reduced and they cannot change their club crest or colours without discussions with fans, I am in favour of that, but I have significant concerns with a lot of the other things.

Steve Parish: FIFA controls the world calendar, so it takes first crack at the calendar. It is pretty clear that FIFA wants smaller, 18-team domestic major leagues and one cup competition, so there is a huge difference between the scope creep of their tournaments and the governance role that they should have in the game.

The issue is certainly not about distributions. In fact, if you are going to compare the distributions, I think UEFA give something like 5% of their overall income to solidarity payments, whereas the Premier League give 16% of their overall income even now to solidarity payments down the pyramid, so I do not think that you can compare those two things. In so far as you touch on somebody to adjudicate or the right person to adjudicate or look into whether the distributions down the pyramid are at the right amount or right level, there may well be some role in that, and it looks like that is where we are heading.

When we sit in the much-maligned Premier League, where we are all tarred with the same brush as being just full of self-interest, I can certainly speak for Tony and myself and say that we understand the position and obligation we have to the greater game. We also do not feel like we are permanent members of the Premier League—certainly not. Far from it, we know that pretty soon we could be back in the Championship. I am pretty sure that Sharon would agree with a lot of the things that we stick up for and advocate in the Premier League if she was in the Premier League. It is interesting that Sharon wants the ladder up and she wants to get there, but I am also pretty sure that, once she gets there, she does not want to just go straight back down again. She wants the possibility of staying there.

We have heard about parachute payments and all this distortion, but Palace did not get promoted with parachute payments, and nor did Forest, Brighton, Wolves, Brentford or Luton. In fact, Bournemouth did not get promoted the first time with parachute payments, and nor did Fulham or Burnley. There are a lot of prosperous clubs in the Premier League that did not get promoted with parachute payments—the average is one club a year. There are these causes célèbres, where everybody looks at things through their own individual lens. I understand that, and it is important that we have a broad perspective; my concern is whether the regulator will have that.

We are talking about a system that, at the moment, has served us incredibly well. We have got a democracy, really. Football is run by the clubs and their various governing bodies. Over the last 150 years, we have managed to make it the world’s most popular game. Within that, we have managed to make the Premier League the world’s most popular league. Of course, if we had a regulator that made all the right decisions all the time and was not lobbied by the big clubs more than maybe the smaller clubs, then of course that might be of benefit, but I am severely worried about the potential unintended consequences and the power of the big clubs to dominate the debate.

[Stephanie Peacock]

Q I appreciate the point you are making, and obviously we are very supportive of the Premier League being incredibly successful, but half the clubs in the top five leagues are technically insolvent. The independent regulator is obviously here to try to deal with some of those issues. Very briefly and very simply, do you welcome the concept of an independent regulator?

Steve Parish: The problem with football is that there are so many moving parts. Competitive balance and sustainability in some ways go hand in hand. If you look at Bolton as an example, there was a lot of money invested in Bolton. The infrastructure was massively improved. Yes, it got into financial trouble, but it did end up a lot better off, with a lot of investment over that period, and it enjoyed a sustained period in the Premier League.

My big concern is that if you only focus on sustainability, the biggest businesses can always cope with regulation the best. There is another chasm, which is between the top clubs in the Premier League and the rest of the clubs. If you look at the Bill, it classes relevant revenue as the broadcast income, but broadcast income is 75% of Tony’s and my revenue, and about 20% of the bigger clubs’ revenue. So straight away, it has the ability to competitively disconnect the league even further.

That is just one concern I have. Of course, if the regulator is well informed, lobbied by all the right people and comes to the right decisions, which create the right platform for football to continue to thrive, it will be a good thing. But when I read the Bill—when I see how, frankly, imprecise it is; when I see areas where the Secretary of State can interfere or where the rules can be changed; or when I see 116 different licences or each club being treated differently—I do see a lot of worrying issues that could arise.

--- Later in debate ---

[The Chair]

We will now hear from David Newton of the Football Association. We have until 3.50 pm for this session. Will the witness please introduce himself for the record?

David Newton: Thank you, Chair, and thank you for the opportunity to speak to the Committee this afternoon. My name is David Newton. I am head of football operations in the FA’s structure, with responsibility for player-related matters, competitions and professional game relations.

[Stephanie Peacock]

Q One of the key parts of the Bill is the state of the game report. What value do you think it will have and what timescale should it be carried out within to be of most benefit?

David Newton: The state of the game report will be a valuable asset to us as a sport, because it will draw on the widespread aspects of football, not just the narrow responsibility of the regulator, so it will reflect the whole football pyramid. As you know, the FA is responsible for 16 million or 17 million players and all the money flows within football. It is important that the work of the regulator is set in the context of the wider game. That is where we feel that the report could add value. As previous speakers have alluded to, football is a fast-moving industry, so three years seems about right.

[Stephanie Peacock]

Q Competition arrangements, such as the FA cup fixtures, do not fall within the scope of the Bill. Do you think that is the right choice, and why? Feel free to take this opportunity to add anything on the changes to FA cup replays and why they happened the way they did.

David Newton: The short answer is no, we do not believe that competition format matters should be an aspect for the regulator to consider. In Dame Tracey’s report summaries, competition format was not part of that, and I think we feel that competition format matters should remain the province of the football authorities, whether that be ourselves or the leagues. There are specific football-related matters that should remain in our ambit, and this is certainly one of those we feel quite strongly about.

[Damian Collins]

Q One of the comments on the Football Bill is that it does not particularly mention players, and that the scope of the regulator is purely financial and about financial sustainability. The clubs also, as part of their licensing agreement with the regulator, have to produce a corporate governance report. Do you think the Football Association would have any objection if, as part of that governance report, the regulator asked clubs to demonstrate not only how they are financially sustainable but how they met all their other obligations?

Football clubs are not only licensed by the regulator. They are licensed by the Football Association as well. There are articles of association of the Football Association, which place responsibilities on all clubs. Do you think it would be good and proper due diligence for clubs to have to demonstrate through their corporate governance reporting how they meet all their obligations within football—to the FA, to their players and to the welfare standards they are expected to follow?

David Newton: It is an interesting point. It is not one that we have necessarily considered in detail. I do not see any reason why, in good corporate governance practice, you would not refer to your corporate governance standards with all employees, whether they be players or not. From that perspective, on the face of it, it would seem a reasonable assessment.

--- Later in debate ---

[The Chair]

Q We will hear from Jane Purdon, the former CEO and director of Women in Football, who is now an ambassador for the same organisation. We have until 4.10 pm for this session. Will the witness please introduce herself for the record?

Jane Purdon: I am Jane Purdon. I have worked in football and elite sport for about 22 years, starting as the in-house lawyer at Sunderland football club. I went on to do 10 years at the Premier League, rising to become director of governance. I then went to UK Sport, where I co-authored the code for sports governance. More recently, my work has been with Women in Football. I have just stepped off the board, but I remain an ambassador; I think that means I have the privilege of rocking up to events like this. Thank you for having me. I also have another chair role in football and a quasi-board role with Premiership Rugby, so I now have a portfolio career.

[Stephanie Peacock]

Q Do you think that the Government are right to exclude the women’s game from the scope of the regulator to start with? Do you think that it should be included in the future?

Jane Purdon: Women in Football does not have a corporate view on this, and we do not have a view on the regulator at all. The reason for that is that opinions vary, so I cannot answer for Women in Football. A lot of our focus—we have put in a written submission to the Committee—has been on the effect on the football workforce and the women in it as a result of this legislation.

If I can give you my personal opinion, the Government launched and backed Karen Carney to write a review on the future of women’s football, and it really was a privilege to be an independent expert on that. I am still working with Karen on what is called the implementation group, run under the auspices of the Secretary of State and the Minister.

A lot is going on in women’s football. It is fast evolving and the needs are huge. We need innovation. Not all the solutions that have worked for men’s football will work for women’s football. The Government are—I do not know what the word is—managing the process, or putting the right amount of pressure on the stakeholders, to see where we get to. But at some point, we may need to review those processes, how they are working and whether women’s football is landing in the place where we want it to land. Whether when we get to that point we say, “Gosh, we have a regulator here. The regulator has a role,” I do not know, but it is an open question and one that I think we ought to keep asking.

[Stephanie Peacock]

Q You mentioned the Carney review. What progress do you think is being made on those recommendations? Is there enough legislative impetus behind the review?

Jane Purdon: As I say, we have this implementation group run under the auspices of the Secretary of State and DCMS, and there are some real, chunky issues there. Where I am right now with it is allowing that group, which I think is due to meet again in July, to continue its work, but we must keep this under continuous review and not feel complacent that we have sorted women’s football.

[Stephanie Peacock]

Q Do you think there is a risk that clubs make asset transfers from the women’s game to the men’s game in order to become financially sustainable?

Jane Purdon: One of the classic models at the moment, as you have heard, is that the women’s team sits within the same legal entity as the men’s team, and there are pros and cons to that. The pros are obviously that the club has the brand, the IP and the infrastructure. The cons are that it can make the women’s team very vulnerable to what happens in the men’s team. I saw that with my own club, Sunderland, which 20 years ago was so ahead of the game, but the men’s team fell down two divisions. I understand that it is a cost centre and tough decisions must be made, even if they are not the decisions that I would make.

I have actually posited the question before of what happens when women’s football begins to make money and becomes profitable. What are we going to do with that profit, and how much will go back into the men’s game and how much stays in the women’s game? I think that would be a great question for football to debate.

[Dame Tracey Crouch]

Q Good to see you, Jane. You are obviously involved in Women in Football, which is not always about women’s football. Do you think clubs are making enough progress in ensuring that there are more women on their boards and that there is greater diversity in the boardroom? What do you think the regulator should or could be involved in in the future?

Jane Purdon: There are some statistics and research showing that, I think, 10% of current Premier League directors are women. That research was done earlier this season, but the key thing is that it has not shifted since somebody last looked at it in 2019. The answer, with a very broad brush, is that it would appear not. I have to say that there are some clubs doing fantastic work, some of whom have given evidence today. If you want a great exemplar, take a look at Brentford football club, but as a whole, I do not think the industry is moving fast enough. We need to look at not just boards but executive committees—the lead executive decision-making body within the club.

We speak to our members a lot about this. We have 9,500 members, 80% of whom are women—we do welcome men into our membership—and we talk to them regularly about how they are feeling. We are getting a very mixed picture. We are told that 89% of them feel optimistic about the future of football, but at the same time, again, getting into 80% say that they have experienced sexism in their football careers. A minority of them feel that they are supported to get to the highest path. I would say that things are changing but not quickly enough.

To the second part of your question about what the regulator could do, we have a proposal for a code of governance practice. What concerns us at Women in Football is that both on the face of the legislation and through discussions we have had with the Government in our lobbying activity leading up to this point, there is an indication that it will not include any provisions about diversity. Having co-written the code for sports governance in 2016—under your maestro-ship, Tracey, if I may say so—and having seen how that really shifted the dial, I am really concerned about this. I think it is a poor vision of corporate governance if you do not address equality and diversity. You are not actually writing something about governance. You are writing something else.

To really shift the dial on this, you need three things. You need to make the business case and win hearts and minds. People need to understand and not be frightened, and realise that there are really sound business reasons for doing this. You need to give them support, but you do need to have a bit of a lever—whether that is a funding consequence or a “comply or explain” consequence and the transparency that comes from that in the case of the UK corporate governance code. That is one thing we would like more assurance on and express reference to in the legislation.

--- Later in debate ---

[The Chair]

We will now hear from Robert Sullivan, CEO of the Football Foundation; Niall Couper, CEO of Fair Game; and Simon Orriss, head of legal at Fair Game. We have until 4.40 pm for this session. Will the witnesses introduce themselves for the record?

Robert Sullivan: I am Robert Sullivan, chief exec to the Football Foundation, an independent charity that has been going for 23 years to fund and transform the state of grassroots football facilities in England. We are funded directly by the Government through Sport England and from redistributions from the Premier League and the FA. We work in each of your communities and across England to improve grass pitches, build new artificial pitches, and change the community stock of clubhouses and changing rooms. We think we make a real social difference across England.

Simon Orriss: My name is Simon Orriss. I am a solicitor specialising in corporate law and sports law. For the last couple of years I have been working with Fair Game, which Niall will speak about in due course, as the head of legal providing general legal support.

Niall Couper: I am Niall Couper, the CEO of Fair Game. I was a former fan-elected member of the Dons Trust, owners of AFC Wimbledon. I was a sports journalist at The Independent for five years and I have published a number of books on football, which you can get on Amazon.

[Stephanie Peacock]

Q I will begin with a couple of questions for the Football Foundation, then I will direct some questions to Fair Game. The grassroots football in my constituency of Barnsley East is struggling, particularly with facilities and pitch. I know we have communicated about Wombwell Main and Wombwell Town. There is also Worsbrough FC. Is the experience that I have in Barnsley the same across the country? What more do you think the Bill could do to protect grassroots sport?

Robert Sullivan: We have communicated and I hope we have been helpful. I think it is generically equivalent across the country, but obviously there are local differences according to specific football needs and socioeconomic conditions in each part of the country.

The state of grassroots facilities has always been one of the biggest strategic challenges facing English football. When the FA conduct its annual survey where it asks grassroots players, coaches and participants the No. 1 thing they would like to improve and change in the game, people always say the state of grassroots pitches. We are in no doubt that the primacy of what we do and the importance of the work and the investment of the Football Foundation is fundamental to the future of English football and how we can improve it all. We recognise that there is a huge amount of work to do. The more we can receive support from all parts of the game and from the Government to do that, the better. We are part of the Carney implementation group. It is worth dwelling on what Jane told you a few moments ago, which is that demand for high-quality pitches across this country is set to double over the next 10 years, because of the rise and growth in women’s and girls’ football. That is a massive challenge and a brilliant opportunity for all of us.

That is why I would like to make a specific point about the Bill and some of the provisions in it. The way in which the backstop is currently drafted as part of this potential legislation places primacy on the funding decision between the Premier League and the EFL. Effectively, that means that the Premier League will not be able to work out its other distributions to other parts of the games until it has confirmed the amount of money it will have to give the EFL through the arbitration and backstop process.

As the head of an organisation whose responsibility is grassroots football, I would say that that is a subjective choice: subjectively, I would choose that the Premier League puts the primacy of funding grassroots facilities—it could be women’s football, or whatever your organisation cares about most—at the front of that queue. I do not want the Football Foundation to wait to receive its funding distribution once other causes have been settled first. I believe that our cause, for some of the reasons we have discussed, is the most important in English football.

[Stephanie Peacock]

Q On specific changes that could be made to the Bill to protect grassroots football, do you think that grassroots football should receive the excess money from the regulator—excess money in the sense that it has been gathered in interest, for example, rather than the consolidated fund? If it finds that it has that money, through whatever means, should it come to grassroots sport and what difference could that make?

Robert Sullivan: I am the chief executive of a charity and my charitable purpose is to raise as many funds as I can to reinvest in grassroots football—all of our funding is welcome. We believe that at the moment we are well funded and well supported by the Premier League, the FA and the Government: I want to stress that. If I may use the term of the day, we are more concerned about the unintended consequence of how the legislation may be written and whether that has a negative impact on what funding may come through to grassroots football from those football bodies once everything else has been worked through.

If I may make a second point about what other changes should be considered, the experience of the Football Foundation and the Premier League Stadium Fund, which we operate on behalf of the Premier League to invest in national league system grounds—and I know a lot of you have national league system grounds in your constituencies—is that investing in facilities, in sustainable assets for clubs, is really important. I would be concerned that money that is passed without requirements to put that money into sustainable facilities that can generate future investment and support future revenues, and instead is just passed over as cash to be spent on running the clubs, without those requirements, would be a missed opportunity to send some of the wealth at the top of the game to the things that will make the game sustainable for the future.

[Stephanie Peacock]

Q Can I ask what you mean by unintended consequences?

Robert Sullivan: As I tried to highlight, if the backstop makes the funding of the EFL the primary budgeting step of the Premier League—all other distributions are whatever is left—that is a subjective choice, which may not be meant by everybody in Parliament. Every single Member of Parliament has lots of grassroots community football clubs. Not all of them have an EFL club which they need to support. There is a choice about what is more important. What is the first choice of where the distribution of Premier League money goes—is it to the grassroots or is it to the EFL pyramid? They are both very valid causes. I represent an organisation which is here to represent the voice of grassroots football.

[Stephanie Peacock]

Q I appreciate that explanation. As the Member for Chatham and Aylesford outlined in one of the earlier sessions, it is hoped that it is a backstop and is not used, but it was helpful to have that clarification. As time is short, may I move briefly to question Fair Game? I know that other Members want to come in.

You have been campaigning for a long time on many of the matters that are addressed in the Bill. As a way of giving a view, are you pleased overall with the independent regulator that is proposed in the Bill, and do you have broader comments to add?

Niall Couper: There are a few things that are missing. When we look at the financial flow within football, the difference is dramatic. We have done studies, and there is a written submission that I hope the Committee has received. At every single level, those gaps are getting wider. At the moment, the decisions are being made by the Premier League, and to some extent by the EFL as well, and that is not actually benefiting those clubs. It is making it harder, and more of a gambling culture, for every single club throughout the pyramid. That is putting clubs in serious jeopardy.

In the very latest statistics, we are aware that 58% of clubs in the top four divisions are technically insolvent. Brighton and Crystal Palace are both technically insolvent as well—I heard them earlier on. There is a real fundamental issue there.

What we want is to see more of that revenue redistributed down the pyramid. At the moment, for every £1,000 that a club in the Premier League gets in the broadcasting deal, 14p goes to a National League North or South club, or 57p to a National League club. Those differences are dramatic. That is why we really need to look at it.

I go on to what the Football Foundation is saying. We want to see the money invested in the right way. We want to encourage and incentivise well-run clubs. We want to see sustainability. That means investing in infrastructure. It means making grounds a 24/7 operation and making them the hubs of the communities that we all want, with the kind of things that we want to see, such as dementia clubs, working groups, walking football and community programmes, which are all are embedded in those local clubs. That is where we should be looking to encourage investment. That is where the investment in lower clubs goes—that is the difference they make.

Combined with what the Football Foundation does, and looking at the parameters of what a Bill should be about, that should be the first thing. When we are looking at a television distribution deal, we need to be thinking about the parameters that deal should be meeting and what it should address, such as closing the gaps that are causing insolvencies and heartache.

When a club goes into administration, we all know the consequences. That is the loss of your local plumber, caterer or whatever. They are the ones that lose when a club goes into administration. It is not some harmless thing. This was talked about earlier on. If it is liquidated, yes, it goes, but if it goes into administration, there is a lot of pain that goes with that. Those things need to be addressed. If we have the correct parameters to define a distribution deal, the hard-working community clubs can thrive and the grassroots can thrive. That is ultimately what we want to see. That is the growth of the game.

You talked about girls’ football. I have got two girls who play football. The issue of pitches that you talked about is a big problem. A lot of the local big National League and National League North and South clubs really want to invest in that as well and give that, but the money is not there. They are struggling to survive day to day. They live hand to mouth. Those are the clubs that fold. Those are the clubs that disappear, because they are not in the public eye.

In the broadest sense, for all the politicians around the table, those are the clubs that we should really be looking to cater for. That is what the Bill can look at: changing the parameters of what it looks like in distribution.

[Stephanie Peacock]

Q Do you believe the Bill as it stands will ensure the appointments to the expert panel and the board of the regulator are free from vested interests? What kind of experts do you think should make up the expert panel?

Niall Couper: You probably spoke to a couple this morning. I saw the panels and I am aware of some of those people. You have an issue here. Where does the investment come from? Who are the people making the decisions? Where is the funding coming from for some of these people who will be putting their names forward? We have to look at making sure that people who perhaps work for the Premier League or the EFL, who have been making an awful lot of these decisions, are not allowed to be on those boards, or that those organisations that are majority funded are not on those boards.

It is really difficult. I would like to see a whole load of organisations get independent funding. It would be really beneficial to allow them to have that free voice that football really needs. At the moment, the Premier League is the de facto regulator of football.

[Robin Millar]

Q I chair the parliamentary football club and have often said that I am a terrible fan. I have never held a season ticket in my life, but I have played grassroots football, badly, for about 45 years. It is fantastic to see you here today, Mr Sullivan.

DCMS has done a brilliant job in making sure that money gets out to grassroots clubs. I have seen some in my own constituency, even though that is over the border in north Wales and comes via the Football Association of Wales.

You have just said something that I have written down—every MP has grassroots football clubs in their constituency. Potentially, every single MP here has an interest in voting to see money vired directly to grassroots football.

You make the point about the key transaction between the Premier League and the English Football League. I am curious, however, about how that might happen. Is the structure in place to cope with, suddenly, tens of thousands of projects across the UK? Is the FA—I will use the phrase— fit for use, in terms of distributing and monitoring that? What do you think needs to be done from your end of the telescope?

Robert Sullivan: Let me pick through that carefully. The way in which projects are identified to invest in grassroots football is done by the Football Foundation, who fund us alongside the Government and the Premier League. In Wales, their money goes straight into the FAW, who have set up their own equivalent of the Football Foundation. Without passing comment on whether the FA were fit to do it, which I am sure they would have been, they tasked us with doing it.

I am delighted to say that we worked really hard to build what we call a local football facility plan for every local authority in the country. If any of you go on our website—I am seeing some nods; it is good that you know about your local football facility plans—there is effectively a shopping list of all the projects that we want to do in every part of England. We have built a team and we are building in the investment from our partners to go out there and deliver those projects.

Football Governance Bill (Third sitting)

Stephanie Peacock Excerpts

Committee stage
Thursday 16th May 2024 Public Bill Committees

[The Chair]

I invite our first witness, Ben Wright, the director of external affairs at the Professional Footballers’ Association, to start his evidence. Can you introduce yourself, please?

Ben Wright: Thanks very much for the opportunity to come and speak to you this morning. My name is Ben Wright, and I am the director of external affairs at the Professional Footballers’ Association. The PFA is the trade union for all current professional players in the Premier League, the English Football League and the Women’s Super League. We have approximately 5,000 current members, and provide support to approximately 50,000 formers members as well.

[Stephanie Peacock (Barnsley East) (Lab)]

Q145 It is a pleasure to see you in the Chair, Sir Christopher. Good morning, and thank you for joining us, Ben. By way of a first question, perhaps you would like to outline your thoughts on the Bill, in particular the fact that the Bill does not mention players once.

Ben Wright: Thanks for the opportunity. First, I will say that we have really appreciated the opportunity to engage throughout this process, from the fan-led review and then all the way through to the publication of the Bill. We welcome the support of the Minister and his officials, who have been very willing to listen to our views on this.

On the Bill as a whole, we have always taken the view that, if football was able to show that it can regulate itself, the Bill should not be necessary. I think it has been said to you before that we should view it ultimately as a failure of football that it has got to this point. However, we are broadly supportive of the way that the Bill has been presented. The fact that it is light touch and contains a relatively tight and focused remit is the right approach at this stage. We believe that a proposed code of governance, which can be established by the Independent Football Regulator, rather than being specifically set out in the legislation, is the right way to go.

We do think that the omission of any mention of players in the Bill, which you nudged towards, is significant. I am paraphrasing something that our friends at the Football Supporters’ Association said to you the other day, but we certainly do not view it as a conspiracy to make sure players’ voices are not heard; I think it is possibly a result of a perhaps understandable determination to reduce the amount of specification and detail in the Bill and to keep it very tightly framed. However, the Bill mentions a lot of things—leagues, governing bodies and all the rest of it—and we always take the view that there are only two groups without which professional football cannot exist: those who play it and those who watch it. If you take football out of the Bill—this is not intended as a criticism of other regulated industries, but I would imagine there is possibly slightly more scrutiny of this Bill, because it is football—the Bill is ultimately about enabling the regulation of an industry. We think that there is a need for the employees in that regulated industry to be recognised as a group who have a degree of importance that perhaps elevates them above other stakeholders. Their views should be sought and heard.

[Stephanie Peacock]

Q In which areas do you think the regulator should consult players?

Ben Wright: In terms of the Bill itself, we would like to see it reflected in the regulatory principles. The PFA and I think that there is almost a philosophical need for players to be identified and for their importance in the game to be established in the regulatory principles.

There are other aspects, though. There is a provision in the Bill about the ability of the regulator to pass views on new competitions and applications for new competitions, but it does not specifically mention that players should be consulted about that. There are two reasons for this: the slightly philosophical and then the practical. In a lot of the things that the IFR could have the capacity to do, players are one of a very small group who could be substantially and substantively impacted by the decisions it makes. From a trade union point of view, I am talking about their contracts, which will be explicitly linked to the competitions they play in, the financial security of their owners, and what any decisions by the IFR might mean for their employment contracts. That is why, from a practical reason, I think they need to be recognised.

With things like new leagues, the obvious and clear reference point is the development of European Super League proposals, which is understandably very much framed around the fan opposition there was to that. It often gets forgotten that there was also a huge backlash from players towards that—it developed to a point where players were finding out about it by hearing reports on Sky News, or wherever it might have been, on a Sunday afternoon. As the union, you are getting calls from players saying, “What’s all this about?”. Some of them may have moral reasons—to term it loosely—why they might have a problem with where competitions are hosted, and they might have practical reasons for wanting more information, based on their employment contracts.

[Stephanie Peacock]

Q I have one more question: do you think it is right that player welfare is not in the scope of the Bill? Many people are rightly concerned about the link between football and dementia, for example.

Ben Wright: Again, that is possibly an area where the code of governance might be useful. We had long conversations at the outset of the fan-led review, and the White Paper does actually reflect quite a lot around player welfare. There were specific mentions—I know officials at the Department for Culture, Media and Sport are still working on this, and have taken it seriously —of player welfare within club academies and the right for independent support to be offered to those players.

I think the code of governance is absolutely a discussion to be had. What I would point to, though—I think the FA talked about this when they spoke to you the other day—is that there are well-established mechanisms in place around a lot of player welfare issues that have been very effective. A lot of those are actually enshrined in their contracts. One of the things that we, as a union, always slightly guard against is the idea that while football is not a normal profession, it is a normal job, and you have the rights to the same employment protections and rights of protection from your employers and expectations as anyone else should have. That is fundamentally where they should be enshrined. We would support that remaining the case.

[Robin Millar (Aberconwy) (Con)]

Q On Tuesday, we heard from academics that there was an inability to control costs in football. We also heard that the wage-to-revenue ratio has risen dramatically from 45% to 70%. We heard from Mr Mather, the chairman at Cambridge United football club, that his expectation is of a 30% uplift in player wages in this round of negotiations. He made the point, in fact, that Haaland at Manchester City will earn in two months what his club turns over in a year. Do you think it is an inability to control player wages that is the problem?

Ben Wright: You will probably be unsurprised to hear me say no. I think there is—

--- Later in debate ---

[The Chair]

Welcome, Mr Bhandari. Could you introduce yourself briefly? Then we will have the first question.

Sanjay Bhandari: I am Sanjay Bhandari, the chair of Kick It Out, an equality and inclusion charity. It is the leading inclusion charity in football. We have been around for 30 years and our mission is to eradicate discrimination and make football a game where everyone feels they belong.

[Stephanie Peacock]

Q Good morning and welcome to the Committee. How many reports of discriminatory behaviour did Kick It Out receive last season? What were some of the dominant factors behind that abuse, and what are the most common forms of abuse? Could you share your experience with the Committee?

Sanjay Bhandari: Last year, we had just under 1,000 reports. We have had steadily increasing numbers of reports for the last four seasons. Racism is always a steady high, and we have had increases over recent years in sexism and misogyny, in homophobia and transphobia and, over the course of the last year in particular, in Islamophobia and antisemitism. That is what you would expect with what is going on in the outside world, but each year we have increasing numbers of reports, and of reports per incident. That tells us that fans are doing their bit and sending a message that they are not tolerant of discrimination.

[Stephanie Peacock]

Q The fan-led review initially recommended that the regulator should mandate equality, diversity and inclusion action plans. Was it the right decision for the Bill not to directly address that?

Sanjay Bhandari: There is an opportunity to be more front-foot on equality, diversity and inclusion that the Bill could have taken. Wearing my hat as having 30 years in the regulated industries, part of the challenge is: what is the purpose of a regulator? What harm are you guarding against? How do you craft that?

You could argue that football is different. Football is not banking; it is not like any other industry. In football, clubs will routinely project that they represent their local communities, but do they? There are several clubs that actually represent the local communities that lived there 40 and 50 years ago. When those people come from outside to the stadium, the locals go in their homes. So actually, who is holding them to their promises? You could argue that the Bill should go further because clubs are heritage community assets.

There is also another way in which football is not like banking. A banking regulator can take action that will put you out of business. No one has ever put a football club out of business from a regulatory perspective, and no regulator will. Everyone knows that the political ramifications and the impact on communities are so large that it would never happen. Football gets a benefit that no other industry gets. That is because it plays such a significant part in its community, with the link to community and the creation of community cohesion. What price should it pay for that? The price is that it should be held to account on representing those local communities.

[Stephanie Peacock]

Q What action has been taken in the last five years by existing governance structures to improve diversity in football? Has it gone far enough?

Sanjay Bhandari: There are lots of really worthy initiatives and lots of good intentions, but the road to hell is paved with good intentions. Good intentions are not enough. Intentions do not change outcomes. It is outcomes that we want, and it is actions that change outcomes, not intentions and rules. There have been lots of things: the Premier League equality standard is a really good development; the football leadership diversity code had noble ambitions. But those are all members’ organisations with members’ rules. The rules can be changed by the members. They are not regulators: they are administrators. The leagues are just like your local golf club management committee. If the members of the golf club do not like the rules, they will change them if they think the members of the management committee are overstepping or overreaching, and that is the position we are in.

As an example, when we were creating the football leadership diversity code, one of the weaknesses we saw was that you do not have whole-workforce transparency. All you are doing is looking at the new hires. Say you hire five new people, and one is from an ethnic minority and two or three are women, you look like you have met the football leadership diversity code standard. But you have 500 employees. You have no idea how representative your entire workforce is. We feared at the time that that would be the weakness, and those fears have come to pass. Why could we not get the mandatory workforce transparency that we asked for during that process? The clubs would not agree to it. It is the golf club members agreeing the rules of the committee. That is why you need third-party regulation, to impose that from above.

[Brendan Clarke-Smith (Bassetlaw) (Con)]

Q Good morning. A lot of the Bill talks about financial regulation, and the diversity and inclusion part of it has not played such a big role so far. Things such as quotas have been spoken about in the past. From your perspective, would you be in favour of quotas for people on boards or being interviewed for managers’ jobs? Do you believe they should be part of regulation? Or should it be left to the game?

Sanjay Bhandari: Just before I answer that, I should have said thank you for the opportunity to speak and for inviting me. I thank the Minister and the teams for their support and engagement throughout the last three years.

I think quotas are actually illegal in this country, because positive discrimination is illegal under the Equality Act 2010. You can have positive action, so you can have differential investments in talent, and leadership and talent programmes, but you cannot have quotas. What you can have is representation targets, but in practice, the way people may execute them is to see them as quotas, which can be quite negative. Ultimately, it is down to the regulator. It is down to the current flavour of what is going on in governance.

I was in one organisation where we set targets that actually helped to increase its performance. We were 17,500 in the UK and 300,000 globally, and in the business units that executed best on diversity, we could point to a one-point difference in margin. We could go to our partners and say, “Would you like more profit?” Funnily enough, they quite like that.

It depends on the particular issue. There are still some very stubborn areas of under-representation in English football. Black people make up 40% of players and 14% of the coaches qualified with a UEFA A licence, but only 4% of coaches. There is something going wrong in the recruitment system. South Asians are the single largest ethnic minority in the UK, but they make up only 10% to 15% of players at grassroots level, 0.5% of professional players, and 1% of the academies from age six. That is not acceptable. There is something going wrong in those recruitment processes. Those are the kinds of things that call out for targeting.

--- Later in debate ---

[The Chair]

Good afternoon. Thank you for coming along. Would each of you please introduce yourselves?

Tim Payton: I am Tim Payton, and I am from Arsenal Supporters’ Trust.

Alistair Jones: I am Alistair Jones, and I am from West Bromwich Albion independent supporters’ trust, formerly Action for Albion.

Sarah Turner: I am Sarah Turner, the chair of the STAR: Supporters’ Trust At Reading.

[Stephanie Peacock]

Q Welcome to you all, and good afternoon; thanks for joining us. My first question is: do you believe that the Bill carves out enough space for existing supporters’ trusts? Where do they fit into the Bill, and why is it important that they are recognised?

Tim Payton: It would be good to see supporters’ trusts recognised in the Bill. They are democratic organisations registered with the Financial Conduct Authority, and they bring governance standards that reflect the wider aims of the Bill.

There are other areas where the Bill could be strengthened to recognise supporters. I want to highlight one that is almost breaking news: you might have seen that, overnight, FIFA, at its congress, set up a committee to look at allowing club games to be played overseas in different jurisdictions.

In clause 48(4), which relates to the duty not to relocate, it would be very reassuring to see supporters given a direct role in engagement with the IFR before approval to relocate is given. I can promise you that the next event where you will see my members marching on stadiums and flooding your inboxes at the levels they were after the super league was announced will be when they try to move Arsenal, Spurs, West Brom or Reading games to jurisdictions overseas. A tightening of that area for supporters would be really welcome.

Alistair Jones: For me, I think it is a lack of trust from the organisations that run football. Independent supporters’ trusts that have been democratically elected by the fans that support the teams will definitely help. Since 1992, there has been a constant mistrust of regulation and football in this country, and having fans able to represent the views of all the fans that they cover will definitely help.

Sarah Turner: We were disappointed that the “golden share” idea was not taken through from the White Paper, because we feel that fans are in the best position to protect our heritage and other things that are in fans’ interest. We think supporters’ trusts are exactly the right way forward, but we would have liked that in a more authoritative way so that we had more of a say on heritage, kit, moving stadiums, changing names and anything else like that.

[Stephanie Peacock]

Q What are some of the major issues that your club or supporters’ trust has faced, and how has this affected fans in the community? Do you think the Bill would prevent that sort of thing from happening again?

Sarah Turner: Reading have had a terrible couple of years. If an independent regulator had been in place, they may have been able to stop some of the things from happening to us. We were in a position where no one could actually help us. We had an owner who was unwilling or unable to fund the club. The EFL was unable to help because it could not make him sell the club.

The impact on the community is huge. Reading is a small town; the football club is at the heart of it. The uncertainty has really affected everybody, not to mention the liabilities: people have not been paid for things at the football club, because it has been unable to.

Alistair Jones: We have just recently come out. We speak to Reading regularly. West Brom were purchased by Mr Shilen Patel and Bilkul Football in March 2024, but until that point there was a real genuine fear that West Brom would no longer exist. We did not have enough money towards the end of the season.

It became apparent that we had to do something ourselves as a voluntary fan group, and that just cannot be right for football moving forward. There were questions back to 2016 and the initial purchase about how on earth a company with no transaction or trading history at all was allowed to purchase West Bromwich Albion for north of £200 million, which was way above the market value.

We look at many things, and the fundamental reasoning for me is that it should not be down to fan groups such as those at Reading and West Brom to try to protect their football clubs. There should be something in governance to be able to stop that before it gets to that point.

[Stephanie Peacock]

Q I think you touched on this in your first answer, Sarah. The Bill requires fans to be consulted on issues of heritage. Do you think there are any other areas that fans should be consulted on?

Sarah Turner: I think fans need to be consulted on where the club plays, because people can move clubs and historically people have moved things away; and on the sale of clubs, because our assets have been stripped at Reading and sold on.

Although there is protection in the Bill for grounds, we would like that to be extended to cover training grounds. Our owner split off the training ground, the stadium and the car park from our club, and they were all sold under different entities, which has made the sale very complicated. We would like a regulator to look at protecting the other assets as well as the stadium.

Alistair Jones: I will just touch on that very quickly. We have had a similar experience, but we have come out of it now. There was a spider’s web of who actually owned West Brom behind the initial vehicle of Yunyi Guokai Sports Development. We proved where the money had come from—it was China in this particular instance—but there has to be some sort of ability to stop that moving in the future.

On corporate governance, for 10 years we have had one named director of West Bromwich Albion Group, so we support schedule 5. We need independent non-executive directors to ensure corporate governance in football clubs.

Tim Payton: I would like to briefly cover not just what we are consulted on but how we are consulted. I will use ticket pricing as an example, because there are now supposed to be advisory boards in place, but the process this year seems to be really unsatisfactory.

Before coming here, I put a message on the Premier League loop, where we talk to all the other trusts. I had messages from the Tottenham Hotspur Supporters’ Trust, Save Our Seniors at Spurs, Spirit of Shankly, Fulham Supporters Trust, Foxes Trust, Nottingham Forest, Newcastle and Wolves 1877 Trust, and all of them feel that there is not really fan consultation on ticket prices; it is more broadcast. You go into a meeting, you get told the announcement, and an hour later it happens.

In the evidence I put in—as policymakers, you will understand this—I thought about a framework almost like a supporter impact assessment following a regulatory impact assessment. It would be very basic: you set out what you plan to do, you have a consultation over a number of weeks, you particularly listen to affected parties—at Arsenal at the moment, they are trying to move season tickets from all senior concessions—and then at the end you produce a report.

In producing a report and explaining what you have done, you bring that accountability and transparency, which might lead to better policymaking. I know that is probably not for the face of the Bill, but we would welcome the understanding in guidance that there will be thought about what effective consultation is, as well as the list of items we are consulted on.

Alistair Jones: It is not just the Premier League. Fan representation is not just about ticket pricing; it is about the times of games too. Next year, more than 1,000 games will be televised by the broadcast partners just in the EFL alone. That means that an average of 20 games per season will be covered, but what does that mean to the travelling fan? For instance, I have to be in Southampton for one of the biggest games of our lives at 8 o’clock tomorrow night. Now, I have young children, and if there is extra time and penalties—hopefully we win—it will be a half-past 2 or 3 o’clock journey back. I understand that commercial revenues are important, but that is part of being a fan who goes to these games, so that needs to be thought of as well.

[The Chair]

I have six colleagues who want to ask questions, so can we make them brief, please?

Football Governance Bill (Fourth sitting)

Stephanie Peacock Excerpts

Committee stage
Thursday 16th May 2024 Public Bill Committees

[The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stuart Andrew)]

It is a pleasure to serve under your chairmanship this afternoon, Sir Christopher. I thank members of the Committee for their time and commitment, and I thank all the officials who have done an enormous amount of work in preparing the Bill. It would be remiss of me not to thank my hon. Friend the Member for Chatham and Aylesford for all her work on preparing it.

Clause 1 sets out the purpose of the Bill and summarises what each part of it provides for. Its purpose is crucial: it underpins the regulator’s entire regime, as the regulator will be obliged to act in accordance with it at all times, so far as is reasonably practicable. Since the fan-led review was published, the Government have been clear that the pre-eminent failure in this market is the growing risk of football clubs being unable to continue providing their service. The potential harm that that can cause to fans and the local communities reliant on the clubs is unacceptable, and the industry has not been and is not doing enough to tackle the risk. That is why we are intervening here, and that is the Bill’s purpose.

The clause explains that the purpose of the Bill is

“to protect and promote the sustainability of English football.”

It goes on to define that, for the purposes of the Bill, sustainability refers to a continuation of service in the interests of fans and for the wellbeing of local communities. In essence, clubs should not be lost to their fans and communities now or in the future, be that through financial collapse, relocation 60 miles away or turning their back on their fans to join a new breakaway competition. I commend the clause to the Committee.

[Stephanie Peacock (Barnsley East) (Lab)]

It is great to be here today to welcome the Bill as it enters its next stage of scrutiny. As I outlined on Second Reading, Labour has supported reforming football through an independent regulator for football for a long time. We echo the Minister’s thanks to all the officials for all their hard work, to all Members on both sides of the Committee, and in particular to the hon. Member for Chatham and Aylesford for all her work on the fan-led review.

We want to scrutinise this Bill appropriately, and I look forward to doing just that in the coming days. However, given how long it has taken for this legislation to be introduced and the number of fans who have had to watch their club pushed to the brink in the meantime, we want to see the regulator implemented as swiftly as possible. I am therefore pleased to see a degree of consensus around the implementation of an independent regulator across the House. With that in mind, I have been focused on tabling amendments and will shape my remarks to be constructive where possible, while of course giving the Bill the scrutiny it deserves. I hope to be able to work with fellow members of the Committee to make sure that the Bill truly achieves its aim of ensuring the future of English football for generations to come.

Getting clause 1 right is crucial to the rest of the Bill. The purpose of the Bill, and therefore the regulator, will underpin all the other measures that we go on to discuss. It will act as a reference point to return to when interpreting the overall sense of intention and direction of the whole regulatory system.

It was the fan-led review that first noted that the regulator would need a clear statutory objective, which it said would be useful for dictating to the board and employees of the regulator what the body is there to achieve, how it should assess any problems and the outcomes it should deliver. If well designed, it should seek to tackle many of the problems identified within English football: the poor management of clubs, substandard corporate governance, the lack of fan involvement and the unsustainable finances that have threatened the long-term health of football. As a result, the fan-led review suggested that the objective should include acting in the interests of both local fans and communities. It said:

“There is no one else more important”,

a sentiment with which I absolutely agree. It must be central to both the Bill and the future regulator that football works in the long-term interests of fans and communities. I am therefore pleased that the clause defines English football as sustainable if it

“continues to service the interests of fans of regulated clubs”

and

“continues to contribute to the economic or social well-being of the local communities”

with which the clubs are associated.

Given the centrality of those concepts, it is curious that the likes of fans’ communities and social wellbeing are not defined in the Bill. The explanatory notes indicate what those terms might mean in practice: “fans” might mean season ticket holders and regular match-goers, and “local communities” might mean the people

“who live, work or trade in the geographic area associated with a football club”.

However, those indications will not become law when the Bill is passed, which leaves ambiguity as to how they might be interpreted. I ask the Minister why fans, communities and social wellbeing are not given clear definitions and whether he believes that there is potential for such terms to be misunderstood or misused as a result.

Further to that point, some clarity is needed that when we talk about the “interests of fans”, we mean their long-term interests. I can imagine quite a few scenarios in which it might be in the fans’ interest for their club to adopt reckless short-term strategies to achieve immediate on-field success. Yet those short-term strategies might lead to the club’s long-term financial demise, which is contrary to the aim of the Bill and against the long-term interests of fans and communities. Can the Minister therefore confirm that the phrase “interests of fans” must be taken to indicate a long-term continuation of the club and its heritage, rather than anything to do with on-pitch results at any given time? I agree with the principle of centring fans and local communities in the Bill and the regulator, but we must make sure that we are clear on what that means right from the very beginning, to ensure that the intended outcomes are achieved.

[Stuart Andrew]

I thank the hon. Lady for her opening comments. She will know from our engagement that we centre fans in the whole of the Bill’s process. She is right that as we go through line-by-line scrutiny, I will be able to give more indications that fans need to be consulted when it comes to important decision making by clubs up and down the country. Some clubs are doing that brilliantly, but we need to raise the bar. I hope that the provisions in the Bill will ensure that that happens and that fans will rightly be at the centre of the clubs they support.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.

Clause 2

Key definitions

Question proposed, That the clause stand part of the Bill.

--- Later in debate ---

For the reasons I have set out, I am not able to accept the new clause and hope the hon. Member for Barnsley East will therefore withdraw it.

[Stephanie Peacock]

I will begin by addressing clause 2 and my new clause 1 before looking briefly at clauses 4 and 3 with schedule 1. Clause 2 provides important definitions that will help make sense of the Bill. Most of the definitions are relatively straightforward, so I will focus on the Secretary of State’s ability to designate which specified competitions will fall under the remit of the regulator.

It is widely understood that the Government’s intention is to identify step 5 and above of the men’s football pyramid as being within scope. That choice is the right one as long as the regulator’s enforcement is proportionate to ensure that clubs in the National League and lower tiers of the EFL are not burdened by compliance. Indeed, at this early stage it is important to set out that regulation does not necessarily need to result in burdensome compliance requirements. As long as the Bill is done right, that will not be the case.

It is important that we leave room for the competitions in scope to be amended in future should circumstances change. I appreciate the Minister’s comments on my new clause 1, but I am sure the Committee will allow me to outline the arguments on why I tabled it.

We should pay close attention to ensuring the healthy growth of the women’s game and whether it should be brought into the regulator’s remit. Despite its recent soaring success, as shown by the historic achievements of the Lionesses and sustained by the growth in support for the Women’s Super League and Championship, the women’s game faces a wide range of issues. The Carney review, commissioned as a result of the need for parity identified by the fan-led review, brought many of those issues to light.

The review raised concerns, for example, about the growing gap between those at the top of the elite game and the rest of the women’s football pyramid. Indeed, the annual turnover in the Women’s Super League, featuring teams such as Chelsea and Manchester City, peaked at around £7 million. Meanwhile, in the Women’s Championship, where teams such as London City and Sunderland play, sides are recording turnover as low as £150,000.

Further to that, the review noticed that there has not been enough progress on ensuring minimum professional standards. Players have been reported as being treated as second-class citizens rather than elite athletes, with everything revolving around the schedules of the men’s teams. Also, women players are three times more likely to suffer an anterior cruciate ligament injury—a serious rupture that strikes top players out for around a year—than their male counterparts, and there is no guaranteed access to even a basic level of mental health support even for those who might be seriously struggling.

Finally and perhaps most relevant to the Bill, the review also identified that the costs of sustaining participation in the women’s game are much higher than the revenues being organically generated by women’s teams. That is true even with the growth of broadcasting audiences and sponsorship revenue. Rather than bringing women into scope of the independent regulator at this stage, however, Karen Carney’s review concluded that women’s football would benefit from the opportunity to incentivise investment and self-regulate first.

Given that the IFR has been designed with the failures of the men’s game in mind, I agree that the women’s game and NewCo should be given the chance to take learnings and to proactively address issues so that it can run on its own two feet. However, I also believe that the option of an independent regulator must remain on the table, not least so that if it is needed, the regulator can act at an earlier point than it has been able to in the men’s game. That is why I tabled new clause 1.

Players, fans and the whole country want to see healthy growth of the women’s game and NewCo, and they now have the opportunity to see just that with the right investment, support and approach. However, if issues prevail, as they have done in the men’s game, it is right that we be proactive rather than reactive this time.

The Government agreed to all the Carney review’s strategic recommendations, but I believe there has been only one meeting of the implementation group. Parity of importance must be given to change in the men’s and women’s game, and I hope the Minister can provide an update on the Department’s progress either in this debate or in writing.

Clauses 3 and 4 and schedule 1 set out some of the other key definitions in the Bill, particularly of owners and officers, and I welcome their clarity. Due to the complex ownership structures of some clubs, it has not always been clear who or what might count as an owner, ultimate owner or indeed who can be held accountable as officers.

The fan-led review identified the example of Birmingham City, who at the time were alleged to be in £100 million of debt. They were in breach of profit and sustainability rules and in a situation where the club and ground were owned by two different people under a complicated offshore ownership structure. Trying to untangle and resolve such difficulties without being able to understand where accountability lies in an opaque structure is no easy task. The detail in clauses 3 and 4 and schedule 1 on how calculations will be made in relation to shares and the like is therefore welcome. In combination with the duty in clause 16 on clubs to provide a personnel statement, the Bill will improve transparency and ensure that the regulator is able to operate from a much clearer standpoint.

I have one question on behalf of the Football Supporters’ Association, which is concerned that the definition of “senior manager” might include football-related posts that were not intended to be within scope of the Bill, such as team managers. Can the Minister confirm that that is not the case and that football-specific posts will not be covered?

[Stuart Andrew]

I completely agree with the hon. Lady on ensuring that clubs, specifically those further down the pyramid, are not over-burdened. That is why we have been careful throughout the drafting of the Bill to ensure that it is proportionate and that our approach is dependent on the size of the club and where they are in the pyramid. I do not think there should be anything for many of those clubs to fear. We heard from witnesses in the evidence sessions that many of those clubs rely on volunteers to do a lot of the paperwork, and we have taken that into account.

I absolutely welcome the hon. Lady’s comments about the women’s game. We all want to see healthy growth in the women’s game, and it has been incredible to see how popular it has become. That is precisely why we brought about Karen Carney’s review, and I put on the record my thanks to her for the work that she has done in this area. What has been useful about that—rather than just doing it through the IFR—is that it has enabled there to be a much broader approach to the women’s game; and she rightly highlighted health and wellbeing as a really important aspect. Although the implementation group has only met once, it was an important meeting for us to set out the questions that need answering, and work is going on behind the scenes in preparation for the next meeting to ensure that we see progress. As she acknowledged, we support all the recommendations of Karen Carney’s review. We want to now ensure that progress is made in implementing them.

The hon. Lady is right that we need to learn from the men’s game at a much earlier stage, which is why we are looking at all aspects, but should we get to the point where it needs to be looked at by the independent football regulator, provisions are in the Bill for that purpose. On the issue of owners, as we have described in the Bill, it is those with a controlling decision-making process within the club that will come into scope.

Question put and agreed to.

Clause 2 accordingly ordered to stand part of the Bill.

Clause 3 ordered to stand part of the Bill.

Schedule 1 agreed to.

Clause 4 ordered to stand part of the Bill.

Clause 5

Establishment of the IFR

Question proposed, That the clause stand part of the Bill.

--- Later in debate ---

[Stuart Andrew]

The provisions in schedule 2 ensure that the regulator has the necessary structures in place to function effectively and efficiently with appropriate accountability as a public body. It ensures that an agreed and transparent process is adhered to when establishing a governance framework, including its board, committees and expert panel. It provides the necessary flexibility to future-proof the regulator and the agility to act quickly where required.

We have made provision for the regulator to appoint an observer from the Football Association. As the national governing body for English football, it will be able to provide insights on behalf of the football industry to support the board if needed in the execution of its functions. Ultimately, the regulator will be accountable to Parliament, but it will be operationally independent and free from undue political or industry influence. The provisions in the schedule are central to creating this framework and strike the right balance between those competing demands.

[Stephanie Peacock]

I am extremely pleased to welcome these provisions, which establish the long-awaited Independent Football Regulator as a body corporate. This is a good opportunity to discuss why it is important that the independent regulator has been established in the form it has—a body that is operationally independent of current football governance structures. This independence will be key in ensuring that decision making is impartial, free from conflict and credible. As the fan-led review clearly reveals, public confidence in existing football authorities is unfortunately very low. Part of the reason for this, according to the review, is that the constitutional set-ups of existing authorities are inherently conflicted and

“the rules of regulation being set by the parties that are to be regulated.”

There are two big problems with that. First, it results in clubs being naturally incentivised to prioritise their own interests rather than the long-term view of what is best for the game. Secondly, it means that there is a natural disincentive for disciplinary action to be taken where it might be commercially damaging for the club involved. Though this new phenomenon was identified by the fan-led review, it is not a new concept. It has been over a decade since the 2011 Culture, Media and Sport Committee’s report that made recommendations to improve the accountability of the regulation of football, and it is almost 20 years since the Burns review, which found football governance unfit for purpose.

Opportunities have been presented over and over, but the same problems have prevailed. This is why it is important that we are finally here today. Independence does not mean that the regulator will have no relationship with existing structures. As we will discuss, working constructively with football governance will be vital to the regulator’s success. This does, however, bring up questions of regulatory clarity.

As it stands, I am not entirely convinced that everyone is clear about whose rules will take primacy and when. The Government’s response to the White Paper consultation seemed to be firm on this, identifying that although there needs to be collaboration, the regulator will be the ultimate authority on matters within its remit. However, the Bill is not always clear, so I hope this is something we can come back to and clarify as we progress.

It is also important to note that the regulator will be independent from politicisation and undue influence from the Government, which is important not only for the sport as a whole, but to ensure that the regulator in no way impacts compliance with UEFA and FIFA rules. Overall, however, I am pleased with the institutional location of the regulator and the fact it is finally being established through the clause.

--- Later in debate ---

[Stuart Andrew]

I agree with the hon. Member for Luton South about the independence of the football regulator; we were really careful to ensure that as we drafted the Bill. She is right that we have to take into account the UEFA and FIFA rules. That is why we have made sure throughout that the regulator will be independent, including from political interference. We would not in any way want to see any sanctions on English football because of any pressure that might be given. As with others, we have engaged with both of those bodies. So far, we feel that they recognise that we have gone to great lengths to ensure that that independence is recognised.

On the board being reflective of society, I am a big advocate of making sure that that happens. There are the usual processes of Government appointments; as hon. Members will know, that issue is very much a consideration. Work is constantly being done to encourage a wide range of candidates to apply. I suppose this gives me an opportunity to shout out to the wider society: get involved! We need a very diverse range of candidates to apply for these positions.

We absolutely need to ensure that the measures on conflicts of interest are in there, just as we would with any other public body, and, yes, there will be a requirement for pre-confirmation of the chair through the Select Committee.

Question put and agreed to.

Clause 5 accordingly ordered to stand part of the Bill.

Schedule 2

The Independent Football Regulator

[Stephanie Peacock]

I beg to move amendment 14, in schedule 2, page 82, line 20, leave out “is satisfied” and insert “has ensured”

This amendment would strengthen the responsibility of the appointer.

[The Chair]

With this it will be convenient to discuss amendment 15, in schedule 2, page 82, line 20, at end insert—

“(1A) A person appointed to the board must declare any interests they consider might give rise to a conflict of interests or the perception or a conflict of interests.”

This amendment would strengthen the duty of an appointee to declare a conflict of interest.

[Stephanie Peacock]

I am grateful for the opportunity to discuss the appointments process for the regulator. I was pleased to hear the Minister’s comments just now and those by the hon. Member for Gosport (Dame Caroline Dinenage) on Second Reading; she confirmed that the Culture, Media and Sport Committee will be holding a pre-appointment hearing with the chair of the regulator once there is a preferred candidate.

The first chair will have a formative role in shaping the regulator at a time when implementation will be key to success. However, on the whole, the Bill has provided limited information about how candidates for roles will be vetted. This is an incredibly important process to consider, not only due to the sheer importance of many of the decisions that these experts will be making but because we must be very careful not to import the same industry groupthink that has caused us to need an independent regulator in the first place.

There is no point in setting up an independent regulator if it is run by those who can offer no real independence from existing football governance structures. To ensure the strength and independence of the regulator, therefore, we require more detail in the Bill about appointments, as well as due diligence on behalf of those making the appointments in practice. The schedule does offer small bits of guidance in this area. It states that a person can be appointed only if their appointer is satisfied they do not have a conflict of interest, and that is an important start.

However, as Fair Game points out, the schedule is not comprehensive enough to provide the necessary assurances that the board will be free from such conflicts. Indeed, as the Bill stands, it does not say that a person cannot be on the board if they have a conflict of interest; instead it is more subjective, giving the power to the appointer to make the determination that they are satisfied there is no such conflict. I am simply not sure that that is strong enough.

[Ian Byrne (Liverpool, West Derby) (Lab)]

What the shadow Minister is saying is so important at the moment, because there is a complete lack of trust and faith in the game. That is why we are sitting here today. We heard from the evidence sessions that that lack of trust is hardwired in the National League, the EFL and the Premier League, so ensuring that everybody who loves the game sees the independent regulator as something to be trusted and as completely independent is so important. That is one of the key reasons why we are here today.

--- Later in debate ---

[Stephanie Peacock]

I welcome my hon. Friend’s comments. He is absolutely right, and he sums up why the process for appointments must be robust and underpinned by transparency and accountability on all sides.

[Dame Tracey Crouch (Chatham and Aylesford) (Con)]

The shadow Minister is making a very important point, but has she looked at the public appointments process on the Government website? The appointment to the independent regulator will be subject to the processes from the Office of the Commissioner for Public Appointments, which has stringent rules around appointments, particularly regarding transparency and conflicts.

[Stephanie Peacock]

I welcome that input, and that is absolutely right. I am trying with these probing amendments to seek some clarity from the Government, so that all hon. Members and everyone who has an interest in the Bill are satisfied. I tabled them to make important clarifications and to ensure that appointments to the regulator are free from vested interests. I believe that that is the intention behind the Bill.

It is peculiar that the process of declaring a conflict of interest does not involve potential appointees making any declarations themselves. Given that potential appointees are the experts on their own history, they must take a level of responsibility for ensuring that time is not wasted as part of their appointment. Amendment 15 would ensure that candidates are obliged to make a declaration if they hold any relevant interests that might give rise to a conflict. That would create a pathway for unsuitable candidates to be easily and quickly dismissed, and ensure that the appointer is not the only person responsible for identifying conflicts. That shared accountability would strengthen the process.

The involvement of the appointer in any investigation of any potential conflicts will also be crucial. I tabled amendment 14 to require appointers to categorically and objectively ensure that the candidate is free from vested interests. It is not enough for an appointer to simply say they are satisfied that there is no conflict; the Bill must require a level of intentional due diligence on behalf of the appointer, so that if any conflicts are identified later down the line, there is a level of objective accountability. Replacing “is satisfied” with “has ensured” will strengthen not only the wording but the entire system of appointments.

I hope that the Minister can accept the changes as a necessary part of achieving the Bill’s aims, or at the very least can provide clarification on why the Bill as drafted allows for subjectivity in decision making when it comes to conflicts. It is only by getting the appointment system right that we will get the regulatory system right. We hope that the process will be watertight.

[Stuart Andrew]

The Government recognise the intent behind the amendments, which is to make certain that the board is free from conflicts of interest—not least given the fact that so many of the witnesses talked about trust, as the hon. Member for Liverpool, West Derby just mentioned. It is essential that the regulator can deliver its regime free from influence from Government or the industry that it will regulate, which is why independence has driven the design of the regulator from the start. That is reflected throughout the Bill and will continue to shape how the regulator is established, including the appointment of its board.

I strongly support the objective that conflicts of interests should be managed appropriately, but the amendments are unnecessary. The current drafting, supported by public law principles, as my hon. Friend the Member for Chatham and Aylesford hon. Friend mentioned, and non-legislative measures already in place achieve that objective. The appointer must already satisfy themselves that a candidate board member is free from conflicts before appointing them, and the board members will have responsibilities to openly and honestly declare any interests that could give rise to actual or perceived conflicts.

In addition to the checks for conflicts at the point of making the appointment, there is an explicit requirement in schedule 2(22) for members of the board to declare their interest in any matters that fall for consideration by the board. That paragraph sets out a process for managing any interests in line with the approach taken for other regulators, and provides assurance regarding the suitable management of board members’ interests. Members of the regulator’s board and their terms of appointment will be subject to the Cabinet Office’s “Code of Conduct for Board Members of Public Bodies”, which sets out clear requirements on the appropriate disclosure and management of conflicts of interests. For the reasons that I have set out, I am not able to accept the amendment tabled by the hon. Member for Barnsley East, and I hope that she will withdraw it.

[Stephanie Peacock]

I am grateful to the Minister, and on the basis of what he has said, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 2 agreed to.

Clause 6

The IFR’s objectives

--- Later in debate ---

[Stuart Andrew]

The hon. Gentleman tempts me to get drawn into an area of further expansion. I understand his point. I have never in my entire life been stopped by so many people to talk to me about football as on the weekend that announcement was made. I of course recognise the importance of the FA cup, but for the regulator to get into areas of match timings, replays and so on may be a bit too far. We will probably look more into that later.

The third objective looks to safeguard the elements I mentioned in the interests of the community and future fans, but not to stand in the way of the natural growth and renewal of a club. I commend the clause to the Committee.

[Stephanie Peacock]

Given the purpose of the Bill, as set out in clause 1, it is important that the regulator’s objectives are shaped carefully and clearly, as they will underpin many of the other measures. Although the fan-led review initially recommended a dual focus on sustainability and competitiveness, when it came to the regulator’s objectives the White Paper streamlined things so that the primary duties were regarding sustainability, with competitiveness becoming a secondary focus. I understand the Government’s reasons for that and have welcomed the subsequent primary duties being in three areas: the financial sustainability of individual clubs, the systematic stability of the football pyramid, and protecting cultural heritage.

I am pleased that the proposal from the White Paper is largely reflected in the Bill. However, I am curious about a few small changes, to which my hon. Friend the Member for Sheffield South East alluded in his intervention. For example, the exact wording in the Bill has “financial soundness” rather than “sustainability”, as was in the White Paper. Will the Minister explain why? It seems strange that the word “sustainability” is not included at all in the objectives. Further to that, the White Paper framed the systemic financial resilience objective in terms of the football pyramid, but the Bill goes only so far as to say “English football”. Will the Minister tell us whether the word “pyramid” has been purposedly omitted? Or does he believe that the definition of “English football” adequately covers things? I have no further issues with the intent of the objectives, but the wording is important if the Bill is to achieve its stated aims.

[Mr Betts]

The Minister’s answer with regard to the FA cup will disappoint many football fans. Football fans look to us to address things that matter to them, and the Minister is right that many fans were outraged at the decision taken with no consultation—not even proper consultation with the EFL and other leagues—to simply abandon FA cup replays.

We could all wax lyrical about the FA cup replay matches we have been to. Those are the ones I remember, and I refer again back to the 1970s, when Sheffield Wednesday, a third-tier club, had four FA cup replays with Arsenal, which was then in the top tier. I remember every one of those games—I went to four of them at least—because they were a unique experience, and that is what many fans feel. They want us to recognise that and to give some assurance that such decisions will not be taken with their interests cast to one side, as though they simply do not matter.

--- Later in debate ---

[Stuart Andrew]

My hon. Friend has got it exactly right and articulated it extremely well. We recognise that that is the challenge football has with the obligations it must match with the likes of UEFA and so on. I thank my hon. Friend for his intervention, and with that I commend the clause to the Committee.

Question put and agreed to.

Clause 6 accordingly ordered to stand part of the Bill.

Clause 7 ordered to stand part of the Bill.

Clause 8

The IFR’s regulatory principles

[Stephanie Peacock]

I beg to move amendment 2, in clause 8, page 5, line 33, at end insert—

“(iv) supporters and supporters’ organisations”.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 9, in clause 8, page 5, line 33, at end insert—

“(iv) football fans,

(v) football supporter organisations,

(vi) any local community groups that the IFR considers relevant,

(vii) employee groups and unions with members employed by football clubs, and

(viii) professional football players and their representatives.”

This amendment expands the list of those whom the IFR must engage constructively.

Amendment 20, in clause 8, page 5, line 33, at end insert—

“(iv) representatives of major club employee groups such as player or staff unions.”

[Stephanie Peacock]

It is good to be able to discuss the issue of who the regulator is to work constructively with in the context of my amendment 9 and amendments 2 and 20, which were tabled by my colleagues.

I of course welcome the principle that on the whole the regulator should co-operate and proactively and constructively engage with existing structures in the footballing industry. That is incredibly important if we are to ensure that the landscape of football governance runs as smoothly as possible. However, currently the list of people or groups that that obligation applies to is limited to clubs’ owners, officers and competition organisers. Those are all vital groups that the regulator will have to work well with, and I am pleased they are included, not least if the regulator is really to employ an advocacy-first approach. However, there is no explicit mention of fans, supporters’ trusts or local community groups who might be engaged with constructively. That seems a strange omission given the rhetoric surrounding the Bill—namely, that it will ensure that football is for the fans—and the fact that its purpose is to serve the interests of fans.

--- Later in debate ---

[Robin Millar]

I am really sympathetic to the notion of a redistributed ownership of the game; I have always struggled with the idea that the ownership sits, for example, with the Premier League. The Bill makes provision for consultation or constructive engagement with clubs. Is it the hon. Member’s contention that that is not satisfactory, because many clubs do engage with fans and, obviously, will talk to their players?

[Stephanie Peacock]

No. The point I am making is that, as we heard in the evidence sessions, lots of clubs have lots of good structures and some best practice that we can learn from, but this particular part of the Bill lists the groups that the regulator should have a relationship with, and I am simply suggesting that we could strengthen that. I am interested to hear what the Minister has to say.

[Matt Rodda (Reading East) (Lab)]

My hon. Friend is making an excellent point about the importance of fans and players, and indeed, by implication, football club staff. As we heard this morning, fans, players and others have suffered from enormous challenges when there have been problems with ownership. It is difficult to describe the full level of stress and pressure that many fans of clubs have suffered over long periods, sometimes for more than one season. I believe that my hon. Friend is making a very worthy and important point, which I hope the Minister will consider.

[Stephanie Peacock]

I appreciate my hon. Friend’s intervention. I know the amount of work that he has done with his local football club and with fan groups.

[Rachel Hopkins]

I, too, mentioned this point on Second Reading. Does my hon. Friend agree that not including groups such as fans, players or staff of clubs would be like the health regulator regulating hospitals but not talking to patients or doctors?

[Stephanie Peacock]

My hon. Friend makes an important point. Again, we are attempting to be as helpful as we can. We are not giving a veto; we are simply saying that the regulator should have a good, constructive working relationship with these groups.

I will make a little progress. My final point, as I said, is that the Bill does not currently recognise that there are cross-governance structures that work well within the game and with which it could be beneficial for the regulator to work constructively. The PFA provides an example of that in the Professional Football Negotiating and Consultative Committee. This mechanism is used by the league’s union and governing body of football to provide a backstop on players’ rights, ensuring that substantive changes to player contracts and conditions cannot be made unilaterally. Where collaboration works well in the football ecosystem, it is important that the regulator can work constructively with the bodies as well as clubs, governance structures and competition organisers. Has the Minister considered that? I would welcome his thoughts on that today.

It is great that the independent regulator will be tasked with working constructively, but we must make sure that there is a comprehensive list of those that should apply to so that co-operation exists in the new landscape wherever possible. I tabled amendment 9 to broaden the scope of constructive working. I hope Members across the Committee will lend their support.

Amendments 20 and 2, tabled by my hon. Friends the Members for Liverpool, West Derby and for Sheffield South East, mirror my amendment, demonstrating that there is a wider recognition of the need to expand the list. I hope that the Minister will take that into account.

[Dame Tracey Crouch]

I am not unsympathetic to the hon. Lady’s point about supporters and the fan community, but given that the Bill establishes an independent regulator to look at the long-term financial sustainability of the game, what does she think the other people listed in her amendment would practically contribute to, for example, the owners and directors tests or some of the licence conditions?

[Stephanie Peacock]

We are not suggesting that they will all be able to contribute to every element. I gave an example where, for example, football clubs are in the early stages of suffering financial problems and issues. Often, the groups that I refer to are the first to recognise and realise that. We are simply attempting to make sure that the legislation is as strong as it can be and that the regulator has the most thorough and useful list of people to work with constructively.

[Sir Christopher Chope in the Chair]

[Ian Byrne]

My amendment 2 builds on what my hon. Friend has just spoken about. The principles are all fine, but there is a glaring omission. We are here today because of supporters. It was the supporters that defeated the European Super League. If the reports are true, the then Prime Minister met the chief executive of Manchester United and there was not much of a furore around the European Super League politically. That suddenly changed when the fans rose up from every single club that was involved, much to the consternation of the owners —I know this personally. They thought that the fans of the said clubs would be delighted at the riches that were going to be pouring into their clubs and at ensuring their success, but that was not the case. It was the supporters of the six clubs and also the pyramid that rose up and defeated the European Super League.

--- Later in debate ---

[Stephanie Peacock]

I appreciate the Minister’s response. He said that it could be quite burdensome to engage with every stakeholder, but that is not what this amendment seeks to do; it aims to lay out what we see as the most important ones. That includes players and fans, without which we could not be here. I think the Minister said that that is implicit. Why not make it explicit? Going back to that argument around burdens, the Bill mentions engagement so far as is “reasonably practicable”, so there is already that safeguard for the regulator. For that reason, I would like to press amendment 9 to a vote.

[Ian Byrne]

The Minister spoke about a stakeholder list, but actually the amendment was just about supporters. They asked for that single word, “supporters”, just to be on the face of the Bill. I think it would make a huge difference to supporters across the land if it was enshrined in the regulator’s principles. I think it would genuinely make a massive difference, so I do hope the Minister considers that at the next stage.

[Stephanie Peacock]

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment proposed: 9, in clause 8, page 5, line 33, at end insert—

“(iv) football fans,

(v) football supporter organisations,

(vi) any local community groups that the IFR considers relevant,

(vii) employee groups and unions with members employed by football clubs, and

(viii) professional football players and their representatives.” —(Stephanie Peacock.)

This amendment expands the list of those whom the IFR must engage constructively.

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[Stuart Andrew]

The regulatory principles outlined in this clause are designed to guide the regulator to exercise its functions appropriately and in the manner intended by Parliament. They are hugely unobjectionable but fundamental principles that should help to establish the regulator’s mode of operating and culture. The regulator must have regard to these principles when acting. The first principle encourages time and cost-efficiency in everything that the regulator undertakes, encouraging swift action and value for money. The second principle encourages a participative approach to regulation, where the regulator should look to co-ordinate and co-operate with clubs, individuals at clubs and competition organisers. This reflects that the ideal regulatory environment is one where all stakeholders are working towards the same goals. The third principle encourages proportionality. The regulator should always look to choose the least restrictive option that delivers the intended outcome, and be able to justify why any restriction or burden is worth it for the benefits expected.

The fourth principle encourages the regulator to acknowledge the unique sporting context it is regulating within. For example, it should consider the existing rules and burdens clubs are subject to, and that market features—such as transfer windows—impose unique constraints on clubs.

The fifth principle encourages the regulator to apply regulation consistently, while still ensuring requirements are appropriately tailored to a club’s specific circumstances. A Premier League club and a National League club operate in very different ways and face different risks. The regulator must take this into account when regulating. When clubs are equally risky, they should face equivalent requirements.

The sixth principle encourages the regulator, where appropriate, to hold the individuals responsible for making decisions at a club accountable for the actions of the club and its regulatory compliance. For too long, clubs and fans have suffered the consequences of bad actors and mismanagement by the individuals calling the shots.

The seventh and final principle encourages the regulator to be as transparent as possible in its actions. While the regulator will handle some sensitive information that should not be shared, it should look to provide and publish appropriate information on decisions wherever possible. It is important that the regulator, and its regime, are open and accessible to the industry, fans, and the general public.

[Stephanie Peacock]

I am pleased to welcome this clause, which sets out the principles with which the regulator will regulate. Along with clear objectives and duties, as well as the guidance which we will go on to discuss, the principles will provide the regulator with clear direction and transparency in its dealings, which have long been missing from football governance. In particular, I would like to welcome the principle of proportionality. This principle should be very reassuring to well-run clubs who may otherwise have feared an over-burdensome regime. The proportionality requirement will ensure that where clubs are running sustainably, with low risk of harm, the regulator will have less of a role. In return, any restriction that the regulator does impose will be linked to a beneficial outcome.

It is also good to see the importance of consistency recognised, so that the regime is applied fairly, while acknowledging the relative circumstances of clubs. It is important that regulation is applied in the same way, where circumstances and risks are also the same. However, there may very well be differing conditions at the very top of the Premier League, in comparison to the National League, where I know there are fears about the burden of compliance, as we heard in our evidence earlier this week. The principles should help to alleviate any fears that the regulator will act without nuance on these differences. It will be an appropriately tailored regime, while maintaining a fair application of the rules overall. This is something that I am sure we will revisit multiple times in Committee.

I have a few questions I would like to clarify on these principles, including how the principles have changed since the White Paper. The initial document set out 10 proposed regulatory principles that were described as “basic and fundamental rules” for the regulator to follow. In the Bill, however, we are left with just seven. Some of this is due to condensing the principles into a smaller number. I understand the desire to not be over-wordy, but I do question whether that was necessary. For example, although the concepts of coherence and being context-specific overlap, each deserves an individual consideration.

Perhaps more concerning is that, looking closely at what has changed, some of the principles have been left out altogether. One clear omission is the principle of bold enforcement. The White Paper described how this principle would work as follows,

“When advocacy is ineffective, or in critical situations, intervention and enforcement should be bold. Sanctions should be strong and aim to deter future non-compliance.”

I am interested to hear from the Minister why this has been left out of the Bill. It is, of course, incredibly important that the regulator is not unduly heavy handed but, given the requirements for proportionality and constructive working, it is interesting that this is not complemented by the principle of bold enforcement, when this is actually necessary in critical situations.

Another omission is the principle that all decisions taken by the regulator should be evidence led. In the White Paper this was framed as being important so that all the regulator’s decisions can be defensible under scrutiny, being backed up by data, investigation, and information. Could the Minister give a reason as to why we would not want to see a regulator that puts data and evidence at the core of decision making? That is surely the intention of the Bill, and we cannot have regulation based on whims alone.

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[Stuart Andrew]

We are committed to establishing the regulator as fast as possible post the passing of the Bill. To that end, we are building the regulator in shadow form within the Department for Culture, Media and Sport in parallel to the passage of the Bill, to enable the regulator to hit the ground running once it is legally established.

On the creation of the regulator, it will be necessary for property, rights, liabilities and staff held by the shadow regulator within DCMS to be transferred to the regulator. The most appropriate vehicle for affecting those transfers will be a statutory transfer scheme, as has been used in similar situations involving transfers of assets following the transfers of functions between public bodies. The details of such transfers will be determined at the point of transfer.

Question put and agreed to.

Clause 9 accordingly ordered to stand part of the Bill.

Schedule 3 agreed to.

Clause 10

State of the game report

[Stephanie Peacock]

I beg to move amendment 11, in clause 10, page 6, line 21, at end insert—

“(ba) an evaluation of the potential impact of ticket pricing and kick off times on fans and make recommendations in accordance with that evaluation.”

[The Chair]

With this it will be convenient to discuss the following:

Amendment 6, in schedule 4, page 93, line 10, after “issues” insert “including ticket pricing”

Amendment 18, in schedule 4, page 93, line 12, at end insert—

“(f) match ticket prices and kick-off times”.

[Stephanie Peacock]

I welcome clause 10, which we will debate later on. It is an important provision that will require the regulator to conduct a first of its kind evidence-gathering exercise on the football industry, helping to build an objective evidence base to underpin the regulation of the sector.

I will now focus my comments on amendments 11 and 18 in my name, and amendment 6, which is in the name of my hon. Friend the Member for Liverpool, West Derby. The amendments focus on the issue of kick-off times and ticket prices. My amendments advocate for fans to be consulted on those two topics, and for the state of the game review to look at the impact of those topics on fans. I will start with why the inclusion of ticket prices is important in both cases, before speaking briefly on kick-off times.

Ultimately, if someone cannot afford to go to a game, then almost any other matchday issue will no longer be important to them. That is why ticket pricing is so crucial. If someone cannot attend the games of the club they love, many of the other issues around fan engagement will become almost irrelevant. Unfortunately, in recent years the cost of attending a football game has continued to accelerate in a way that has priced many longstanding supporters out. That has not necessarily been due to poor intent on behalf of clubs; as clubs face further financial hardship and fans face the brunt of the cost of living crisis, ticket prices have often been forced to swell at a time when fans have increasingly less to spare.

Not to single out any particular club out, but instead to take an example, Nottingham Forest season tickets for next year have increased on average by 28% for adults and 11% for children. In some price brackets the rise is even bigger. A child’s ticket for next season can be bought for a blanket price of £190, up from the cheapest option of £90 this year—that is an increase of 111%. I do not know the details of Nottingham Forest’s finances, and it is not for politicians to decide whether it is making the right commercial decisions. Indeed, the club said on social media that renewals on season tickets are up 50%, compared with last year, which shows there is still plenty of demand for seats. However, the public response of fan groups has confirmed that there remains a group who feel matches are no longer affordable. Those fans have been attending games week in, week out; they are members of the community that the club is based in. The loss of those people matters, and the regulator and clubs should care about it.

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[Ian Byrne]

On the point about supporters not dictating ticket prices, in 2013 the supporters came together and fought for a price cap on away ticket prices, because clubs, left to their own devices, were pricing them out of the game. I think the Arsenal-Liverpool game in 2013 was the tipping point—I think that was £68. It was felt that that was unsustainable, and that was happening right across the football pyramid. Supporters came together, campaigned and got the Premier League to sit down with them in a room and acknowledge that it was getting too expensive, and a £30 price cap was then designated. The atmosphere of games was a unique selling point for the Premier League. It was willing to price supporters out, and it was supporters who brought it to its senses.

[Stephanie Peacock]

That is a good example that highlights that well-run clubs will want to hear from fans on the issues that matter most to them. Of course, the ability of fans to attend games is incredibly relevant to the financial sustainability of every club. Match-day revenue is a crucial pillar of club finances, and of course getting pricing right will require much more than fan input alone, but I believe that at the very least fans deserve to have their voices heard on the matter, and they have something to offer clubs in return.

[Robin Millar]

It is true that there is a sense that clubs are starting to treat fans as extras who pay for the privilege in a televised spectacle, but surely the hon. Lady would not want the regulator to interfere with market dynamics and a club’s commercial approach. I am struggling to hear that in her speech. I get that these are important issues, but I am not quite sure why the regulator should get involved.

[Stephanie Peacock]

I completely understand the hon. Gentleman’s point, and we respect the fact that it is a commercial decision. Obviously, like me, he will have heard the evidence sessions. Fan groups said time and again that this is a really important issue and that they are not being consulted meaningfully. My hon. Friend the Member for Liverpool, West Derby gave a good example of the benefit to fans; we are simply trying to highlight that point, because we want that meaningful relationship with fans to be as constructive as possible.

I will briefly move on to kick-off times. The FSA says that one of the biggest sources of complaints to its inbox is match-going fans complaining about the scheduling of games. That is not just grumbling about inconvenience; late changes to scheduling can impact on fans’ lives and finances. With good notice for games, fans can book time off work, access advance rail tickets and accommodation, and budget accordingly. Late changes to kick-off times, which are becoming increasingly common, mean that fans are forced to make expensive cancellations or spend large sums on last-minute public transport and hotel bookings.

If the purpose of the Bill is to ensure that the game continues to serve the interests of fans and contribute to the wellbeing of local communities, the regulator must at least be taking note of the areas that matter most to fans. To reiterate, I do not believe it would be right for the regulator to take any kind of proactive role in dictating to clubs and competition organisers when matches should be played, but as I have said many times before, Ministers have repeated themselves over and over about how important fans are to football, so if that is the case, both the state of the game report and the clubs, when consulting fans, should be looking at the areas that matter most to those people.

[Stuart Andrew]

I absolutely recognise that issues such as ticket pricing are really important to fans. Indeed, match days, as others have said, would not be what they are without the fans. The Government believe it is important that clubs consult fans on key off-pitch issues that impact supporters, including operational and match-day issues. These provisions, and the wider provisions for fan engagement, will ensure that fans have a voice on the issues that are most important to them, but it would not be appropriate—the hon. Member for Barnsley East was alluding to this—for the regulator to be a fix for all of football’s woes. Rather, it will be set up with a tightly focused and defined scope and purpose, to tackle the specific market failures that carry a risk of significant harm to fans and communities.

--- Later in debate ---

[Stuart Andrew]

Again, the clubs will have that engagement and raise those points with their own individual club—the away clubs can raise the issues within their club. This is actually putting it into legislation. It gives them that opportunity, which does not currently exist.

The Government do not believe that amendments 6 and 18 are necessary, as we expect that

“operational and match-day issues”

will already capture ticket pricing, and kick-off times are ultimately a sporting decision. It is not for the regulator to intervene on the sporting calendar, but I do recognise the issues that it causes for fans. It has been raised in Culture, Media and Sport questions with me on a number of occasions, and I have raised it with the authorities. They have promised to come back to me although, in fairness to them, these decisions are sometimes out of their control too. It is quite a challenging area.

The Government would welcome any club that chose to go beyond the relevant matters and consulted fans on kick-off times and everything else. However, as I have just mentioned, it is not always an issue that clubs have enough control over to adequately consult fans and respond to opinions. Therefore, to mandate them to do so could be problematic.

For those reasons, I am not able to accept the amendments and I hope the hon. Member for Barnsley East’s will therefore withdraw them.

[Stephanie Peacock]

I appreciate the Minister’s comments. I am happy not to move amendment 18 but I would like to proceed to a vote on amendment 11.

Question put, That the amendment be made.

--- Later in debate ---

[Stephanie Peacock]

I beg to move amendment 10, in clause 10, page 6, line 24, at end insert—

“(2A) A state of the game report must, notwithstanding whether any women’s football competitions have been specified, consider the state of women’s football in England.”

This amendment would include the women’s game in the scope of the State of the Game report.

Amendment 10 will ensure the women’s game is another area that is explicitly required to fall in the scope of the state of the game report. The Secretary of State will have ultimate discretion over which competitions are covered by the regulator but, as my new clause 1 implies, I believe when it comes to the women’s game they should have the ability to review this after the appropriate time has passed.

To make that decision, it is important that Ministers have just as clear a picture of the women’s professional game as they do the men’s. The state of the game of the report seems like the natural place for this picture to be built. Not only will the regulator be able to build a comprehensive and objective evidence base regarding the women’s game, without the influence of vested interests, but, given it is to be repeated at regular intervals, the reviews will also be able to show how the women’s game is changing over time and cross-reference this with the comparative picture in the men’s game.

Without the women’s game being included in the state of the game report, it is unclear how Ministers will be able to make informed decisions on its inclusion within the scope of the regulator in years to come. Likewise, as financial sustainability rightly becomes a focus in the men’s game, we must ensure this has no negative consequences for the growth of the women’s game. Indeed, it would not be the first time that women’s teams have been asked to make sacrifices in order to ensure a men’s side has enough funding. When both men’s and women’s teams at Reading were relegated last year, it was the women’s team who were forced to go part-time as part of a decision that the CEO said was a “difficult but necessary financial” solution. We must avoid this happening on a systemic level as a result of what otherwise would have been a positive change to the men’s game.

Including women’s professional football in the state of the game report will enable a level of transparency over issues like this which, in turn, will breed accountability. As I have spoken to previously, the women’s game is at a formative and delicate part of its growth cycle. It has huge potential. Stadium attendance and broadcast audience records continue to be broken. Two consecutive Lionesses have won Sports Personality of the Year and UEFA estimates that European women’s football could see a sixfold increase in commercial value over the next decade. For this growth to be sustainable and beneficial, we must ensure standards are set in the right place at the right time. A comprehensive overview of the state of the game should help to achieve this. Of course, the regulator may choose to cover this issue anyway, but I believe that this is an important enough aspect of football that there is significant risk if it is not included in the general scope. I hope Members will support me and I am very interested to hear what the Minister has to say.

[Stuart Andrew]

The purpose of the state of the game report is to allow the regulator to better understand the finances and economics of English football, and is currently intended to include the top five tiers of men’s professional football. That, in turn, informs the regulator’s approach to the exercise of its functions and decision making across the regulatory framework.

The amendment would require the regulator to, in addition, consider the state of women’s football in England in the state of the game report, but we have been clear that that is not the intended scope of the regulator’s functions. As we set out in the White Paper, consultation response, and the Bill’s accompanying explanatory notes, we intend this to be for the top five tiers of the men’s professional game. That reflects the fact that the regulator’s scope has been carefully targeted at addressing harm where industry has failed to reform.

That said, where appropriate, the regulator has the ability to share relevant information, guidance and best practice with relevant industry bodies to deliver an effective framework of regulation. Indeed, the Government expects that that could include sharing information with NewCo, the independent entity responsible for managing the women’s professional game. The women’s game is at an exciting and pivotal stage, and should be afforded the opportunity to self-regulate in the first instance. That is why it is not part of the regulator’s intended scope, nor would it therefore be appropriate for it to be within the scope of the state of the game report.

But, even without an explicit statutory requirement, there is nothing to stop the Government or industry looking into women’s football and the unique challenges that it faces. Indeed, this Government have remained committed to supporting women’s football at every opportunity, including with the review that I mentioned a moment ago. In our Government response to that review, we demonstrated our support for all 10 strategic recommendations, and we believe that those need to be acted on to lift minimum standards and deliver bold and sustainable growth for women’s football at both elite and grassroots levels.

If, in future, the women’s game was brought into the scope of the regulator, it would then fall within the matters to be covered as part of the state of the game report. I would like to reassure Members that the future of women’s football, and addressing the challenges that it faces, is hugely important. However, we think that considering that as part of the state of the game report would not be appropriate, given that the report is focused on matters within the scope of the regulator. For those reasons, I am not able to accept the amendment from the hon. Member for Barnsley East, and I therefore hope that she will withdraw it.

[Stephanie Peacock]

I thank the Minister for his explanation. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 10 accordingly ordered to stand part of the Bill.

Clause 11

Football governance statement

Question proposed, That the clause stand part of the Bill.

[The Chair]

With this it will be convenient to discuss clause 12 stand part.

Clause 13 stand part.

[Stuart Andrew]

Clause 11 provides a power for the Secretary of State to issue a statement on the Government’s policies relating to football governance. A football governance statement can be used only to flag issues within the scope of the regulator’s regulatory regime and should not be used to direct its day-to-day operations.

The regulator’s general duties, set out in clause 7, require it to “have regard” to any football governance statement when exercising its functions under the Bill. It is common practice for the Government to issue a similar statement with other regulators. The clause is an appropriate and proportionate power, which will help to give assurance to the Government and Parliament that the regulator is acting within its regulatory scope and has regard to arising issues. It will not interfere with any daily operations or affect the independence of the regulator.

On clause 12, the football industry should not be left to piece together what is expected of it based on the legislation alone. That is why the clause empowers the regulator to prepare and publish guidance on the exercise of its functions. That guidance will be crucial to translating the legal framework in the legislation into a detailed and practical explanation of the regulator’s regime. It will ensure that the industry understands the regulatory system, what to expect from the regulator and what is expected of it. Not only will that reduce burdens but it should, hopefully, improve compliance. The clause sets out that the regulator must publish guidance about the exercise of its functions under specific sections of the Bill and also permits the regulator to publish guidance about the exercise of any of its other functions. The regulator must consult any persons it considers appropriate before publishing guidance for the first time and before revising guidance in future, unless those revisions are minor. That will ensure the regulator takes into account the views of all relevant stakeholders and experts when preparing its guidance.

Clause 13 permits the Secretary of State to prepare and publish guidance on the regulator’s functions. That guidance is an opportunity to provide some additional detail as to how the Government intend the regime to be implemented, which was not suitable for inclusion in legislation. The industry and fans alike have been clear that they do not want to see ongoing Government involvement in football. That is why the regulator must have regard to the Secretary of State’s guidance but is not obliged to follow it.

[Stephanie Peacock]

Clause 11 allows the Secretary of State to prepare, publish and lay before Parliament a football governance statement setting out the policies of the Government that relate to the governance of football, to which the regulator should have regard. First, I want to acknowledge that it is right that the regulator’s processes are independent of political influence. The core purpose of the new body is to be given independent jurisdiction over a remit focused on the sustainability of English football and it should have autonomy over its decision-making processes. I know that the likes of the Premier League are concerned that the statement might jeopardise that independence. Can the Minister confirm otherwise? I am sure he spoke about that in his remarks, but he can add more when he gets to his feet again.

Regardless of that, the independence of the regulator does not mean that there will be no interaction between its work and the will of the Government on football governance more broadly. It will therefore be helpful for the regulator to have a clear statement from the Government on relevant policies that might have an impact on its work. It is right that the statement is non-binding, to hopefully give the regulator the contextual information it needs without compromising its independence. It is also right that the statement cannot contain policies that are inconsistent with the purpose of the Bill or the regulator’s objective. That means that Government policy and the regulator will be united on the cause of ensuring the sustainability of English football. I am hopeful that the clause will therefore act as another confirmation that the independent regulator will work collaboratively within the many existing structures that have an impact on the game.

As the hon. Member for Chatham and Aylesford said on Second Reading, clauses 12 and 13 will be key to how the regulator evolves. Indeed, many of the questions I will ask the Minister in Committee are on topics that I believe will likely be answered more fully as part of the guidance that will accompany the Bill’s provisions. In short, the Bill is intended to provide a robust framework, and the guidance will flesh out how that framework can be translated into a real-life explanation of how the regulator will work in practice.

The guidance will improve transparency while also providing clarity for the competitions and clubs that will have to comply with the new regime. On clause 12 in particular, which relates to guidance that will be published by the regulator itself, that set-up will also enable the regulator to have some autonomy in the detail of its approach, subject to proper consultation and clear parameters set by the Bill. The IFR guidance on how it will exercise its functions relating to the discretionary licence conditions will be mandatory, with further guidance in other areas being optional. That will be incredibly important for clubs, allowing them to understand what the regulator seeks to achieve through the use of club-specific licence conditions and to become familiar with the detail of how the regime will be enforced.

There are many further areas in which I believe the IFR guidance will be beneficial so that the minimum standards are set. One area that springs to mind, and that I am sure we will go on to discuss, is how clubs can ensure their fan consultation meets the regulator’s expectations, as well as the requirements in the Bill. I would be interested to hear from the Minister on any other areas in which he believes guidance would be helpful. As with the state of the game report, the timely publication of the guidance will be crucial. Clubs and competitions will want clarity at the right time as they prepare for and adjust to the new regulatory regime. Can the Minister provide some insight on the timelines to which the IFR will or should be working to with regard to the guidance on passage of the Bill?

Clause 13, “Guidance published by the Secretary of State”, will primarily benefit the IFR. It is important that the regulator is able to understand the full intention behind the framework that the Bill provides so that it can exercise its functions accordingly. It is right that the guidance involves consultation with the IFR and relevant parties so that the resulting guidance is genuinely useful for facilitating the IFR’s work on football governance. In combination with clause 12, this will provide the colour to the clear boundaries that we are working to set through this Bill.

[Stuart Andrew]

I absolutely want to assure the hon. Lady about independence. It is essential that the regulator can deliver its regime free from any undue influence from industry or Government. However, as is the case with other regulators, it is appropriate that the regulator is accountable to both Parliament and Government. Holding it to account is also important to industry, which is why the Bill provides for that in a way that is proportionate while also protecting the regulator’s operational independence.

It will be for the regulator to determine when and where it publishes its guidance. We do not specify where it should be published, but we strongly expect that it will be published on its website in an easily accessible format in the way that most other regulators do, such as the Financial Conduct Authority with its handbook.

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[Stuart Andrew]

The clause requires the regulator to report annually to Parliament on its activities for that year. As with all public bodies, the regulator must arrange for the report to be laid before Parliament by the Secretary of State for purposes of transparency and scrutiny. The Secretary of State will have some flexibility to direct additional material to be included in the annual report to reflect further specific activity undertaken by the regulator or wider industry that year. That will help to ensure that the regulator produces its annual report consistently each year, and it will also ensure that it captures all relevant information, thereby allowing Parliament to have adequate oversight.

[Stephanie Peacock]

It is right that the independent regulator be required to submit an annual report on the exercise of its functions. In the interest of transparency and accountability, I believe it is standard practice for regulators to produce such annual reports and accounts, and the Independent Football Regulator should be no exception, so I have no particular worries or further questions.

Question put and agreed to.

Clause 14 accordingly ordered to stand part of the Bill.

Ordered, That further consideration be now adjourned. —(Mike Wood.)