(WFI) A British parliamentary report says major changes are needed in the governance of football in England to address financial instability and levels of debt in the game.
The report published today urged the English Football Association to spearhead changes and also make its own reforms to more effectively carry out its responsibilities and meet the future challenges of the game.
John Whittingdale MP, chair of the culture, media and sport committee, said: “No one doubts the success of the Premier League in revitalising English football. But it has been accompanied by serious financial problems throughout the football league pyramid.
“Significant changes need to be made to the way the game is run to secure the future of England’s unique football heritage, and the economic and community benefits it provides.”
The committee said it welcomed FA chairman David Bernstein’s commitment to reforming the FA Board in pursuit of stronger governance, and the support he was receiving from the Premier League and Football League. MPs want the board to be restructured “so that vested interests do not predominate”.
Whittingdale said the FA should lead the shake-up of English football “but it has some way to go getting its own house in order before it can tackle the problems in the English game, and address the future.
“We need a reformed FA to oversee and underpin a rigorous and consistent club licensing system and robust rules on club ownership, which should be transparent to supporters,” he said.
With the introduction of UEFA’s Financial Fair Play (FFP) rules, the committee’s report acknowledges the debt problem facing Premier League and Football League clubs caused by reckless spending to gain promotion or entry into the lucrative Champions League. UEFA’s new regulations, which are being phased in over the coming few years, mean clubs must break even or face exclusion from Europa and Champions League competitions.
“We are concerned by the extent to which English clubs are making losses and operating on the edge of viability,” the report says. “Of course, it is the ability to service debt that is the key factor in any business, but because of demands on clubs, not least from escalating wages, there is no doubt that debt remains a serious problem throughout the football pyramid.”
The committee said UEFA’s FFP initiative had a good chance of making a positive difference to spending patterns in the Premier League and Football League, holding out the promise of more prudent spending.
Among the committee’s recommendations are:
– Imposing a rigorous and consistent formal licensing model throughout professional English football to promote sustainable forward-looking business plans and underpin self-regulation measures introduced by the Premier League and the Football League, and financial fair play regulations being introduced by UEFA;
– A strong fit and proper persons test consistently applied, with a presumption against selling the ground unless it is in the club’s interest. The committee says “there is no more blatant an example of lack of transparency than the recent ownership history of Leeds United” and urges the FA to investigate if necessary with the assistance of Her Majesty’s Revenue and Customs;
– Abolishing the Football Creditors Rule: the committee says it “epitomises the extent to which financial priorities are being distorted” and recommends that if the HMRC fails in its legal challenge to the rule, and football authorities do not address it, Government should consider scrapping it through legislation;
– Amending the Financial Services and Markets Act 2000 to recognise the special nature of supporters trusts and help them overcome the significant legal and bureaucratic hurdles they face when raising funding – the Government should also consider legislation to protect minority supporter stakes where they are facing a compulsory purchase order.
Urgent reforms of the FA suggested include:
– The FA board should number ten, consisting of the chairman; the general secretary; two further FA executive staff; two non-executives; two professional game representatives; and two national game representatives;
– The reconstructed FA Board should reconsider whether the 50:50 divide of surplus revenues should be scrapped to allow it to take strategic decisions regarding the distribution of FA funds, and whether the National game Board and Professional Game Board promote strategic decision-making;
– The FA should review the composition of the FA Council to improve inclusivity and reduce average length of tenure, with the reformed Council absorbing the shareholder role.
Whittingdale added: “Almost all our recommendations could be achieved without legislation, through co-operation and agreement between the football authorities, and we urge them to respond positively with an agreed strategy and timetable for change.
“Legislation should considered only as a last resort in the absence of substantive progress.”
By INSIDER editor Mark Bisson
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