Football Governance Bill (Third sitting)

Debate between Brendan Clarke-Smith and Matt Rodda

Committee stage
Thursday 16th May 2024 Public Bill Committees

[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.

[Matt Rodda]

Q Thank you for your evidence this morning. Could you give us some examples of good practice by particular clubs?

Sanjay Bhandari: We see clubs like Brentford, which I worked with when it was recruiting independent non-executive directors. I helped to support that process. Having non-executive directors on the board is something that other people may talk about.

The Premier League is doing some good work trying to develop black coaches. An organisation called BAMREF has been working very effectively with the FA and Professional Game Match Officials Limited on developing the pipeline and pathway for Black and Asian referees and female referees. In many ways, that is one of the best examples of interventions that are connected across football, with a pathway to try to change the way the workforce looks. It is a relatively rare example. Football is a team sport, but not off the pitch. We are really not very good at teaming across, but that was a rare example of good teaming.

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[Matt Rodda]

Q As you said, there have been some serious problems with owners, not least at Reading. Do you feel that the Bill does enough to tackle that, potentially, through the regulator? Also, do you feel that there is enough of a fan’s voice in the process of raising concerns about owners?

Sarah Turner: It is a good start, but there is probably more we can do. I do not know if the owners and directors test is a duplication of the ones that the EFL will do or whether it will hand that over to the independent regulator. We think there needs to be some real-time tracking of what is going on at clubs because they are continuously overspending and risk-taking. We think the regulator should be taking an overview all the time of what is going on, rather than just at the beginning when they purchase.

Alistair Jones: I concur on real-time accountability around accountancy. From looking back at 2016 when we were purchased, it would be—quite simply; I am a simple man—a great case study to look at. If we could look at West Bromwich Albion, when they were purchased in 2016, and use that as a case study, what if the same company came and purchased West Brom now? Would it still be allowed? If that were the case, quite frankly there would be no point in doing it because it has proven that it was a poor opportunity to buy the club.

Tim Payton: In our evidence, we put forward the importance that the independent non-executive director can have. Following up from what you heard from Sanjay, we think that it would be powerful having in the Bill the need to have two INEDS on the board of each club, and the regulator obviously could then set the guidance and framework. Of course, we already have that in the corporate governance code, which is set out in—I think you mentioned—the Companies Act. Where I see it linking across to other areas of the Bill is the INED under the corporate governance code already has a lead responsibility to consider stakeholders, and of course the stakeholders in football are the supporters.

When we look for improved fan engagement, we do not just look at the fan engagement standard, but to the INEDs on the board being there to ensure that effective fan engagement is taking place. Good INEDs are an early warning system to many other things going wrong. The Minister will be aware of the improvements that have come to national governing body governance through the corporate code. He inherited all that from the pioneering work that Tracey pushed through. I really hope we can have the same framework for the football clubs under the IFR.

[Brendan Clarke-Smith]

Q Supporters’ trusts vary quite widely; I used to be involved in one at Notts County many years ago. Many of them come to the fore when a club is in crisis or needs to be saved. We have been out with the buckets before. In some cases, supporters’ trusts get involved with the actual ownership of the club, and sometimes they are shareholders. Do you feel that a regulator could have helped with that process in the past? Is there a role in the future for helping supporters’ trusts if they want to get more involved? Might there also be the potential that they have some quite onerous requirements? Obviously, I am looking at some of the financial things that are talked about, and a lot of supporters’ trusts are volunteers, so they do not always come from those sectors. Do you feel that a regulator can help supporters’ trusts when they have that level of involvement with the club?

Sarah Turner: I think they probably can, but the FSA do a fantastic role in that. Your first port of call would always be to go to them, but the independent regulator may go over it on the financial side.

Football Governance Bill (First sitting)

Debate between Brendan Clarke-Smith and Matt Rodda

Committee stage
Tuesday 14th May 2024 Public Bill Committees

[Matt Rodda]

Q This question is for Rick Parry. Where a potential owner has a track record of being associated with clubs overseas that have got into difficulties, do you believe the Bill has enough powers to prevent that in future?

Rick Parry: I think so. I do not think there is any reason to be doubtful at this moment, and within football we have been refining the tests that we apply over time. A decade ago, I think the tests were probably inadequate and overly simplistic. We have definitely refined them. We take a closer look at people’s track records, and I am not fearful that the regulator will be unable to do the same.

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

Q Gentlemen, one thing that has been raised is international investment and creating a level playing field with other leagues. Do you still have any particular concerns there? One of the previous witnesses we interviewed suggested that, at the moment, what we are doing is very light touch. Do you think that is still the case? Richard, perhaps I could ask you that first.

Richard Masters: As you know, professional football exists in a global marketplace, and the Premier League is, by most available metrics, currently the most popular in the world. We want that to continue, but it is a competitive marketplace. You could not say that 20 years ago, but it is true today, and we would like it to be true in 20 years’ time. We have been able to do that by collective effort, and the clubs continue to invest in creating a really exciting football competition.

I think the key difference between the Premier League and its other European competitors is the competitive nature of it. We can talk about full stadiums, home and away fans, fantastic brands, and the history and tradition of the English game—all those things are incredibly important, but the key difference between us and the Germans, the French, the Spanish and the Italians is that you have jeopardy from top to bottom. That goes to the funding of football and the financial mechanics behind it, and the key ingredients that go towards that competitive nature and the jeopardy in English football. We do not want to damage that jeopardy at all.

In order to be able to better fund the pyramid, we have to be successful, and to be successful, we have to be able to continue to find football-led solutions to the problems we have. The regulator has a specific role, which is to step in when individual clubs have problems and to oversee certain aspects of the game, but I still believe that football needs to be football-led. The three bodies—or four, if you include the FA—can do a good job of that in the future, in the same way that they have done a good job of it so far.

Football Governance Bill (Second sitting)

Debate between Brendan Clarke-Smith and Matt Rodda

Committee stage
Tuesday 14th May 2024 Public Bill Committees

[Brendan Clarke-Smith]

Q I want to ask quickly about grassroots football. My constituency has benefited from the Football Foundation, as I think most people’s around the table have. What positive role do you see this as having in encouraging more partners to work with organisations such as yourself? Is the Independent Football Regulator in a good place to help drive that, or is this again something where we are looking at the overarching security of other organisations that are going to be the ones pushing it? Is there a role for the football regulator to do more with your organisation?

Robert Sullivan: To be honest, I am not sure yet. I would be cautious about passing a judgment on that. If you pull back a level, what does the Football Foundation need? It needs two things really: it needs a very healthy and thriving elite end of the game that generates lots of excessive revenues that can be distributed back into the grassroots; and it needs the grassroots of the game to be excited, growing and wanting to have lots of kids getting out there and playing. To answer in a very broad sense, if the regulator is allowing that ecosystem of English football to continue to thrive—not only at the top end with more sustainability, and all the things that people talked about today, but with the game still generating crazy passion and demand from kids getting out there— that is brilliant for English football and the Football Foundation. There are going to be lots of people needing great pitches, and we are going to get out there and give everyone a great place to play.

[Matt Rodda]

Q Do you think the Bill does enough at the moment to ensure that fans have a meaningful say on what matters most to them? Also, are there areas where you would like to see the Bill go further, with further say for fans?

Niall Couper: I think there are gaps. We heard of one earlier, about the club heritage and the name. To my mind, these are simple amendments. Making sure that there is a proper fan consultation about a proposed name change is, to me, important. You strike on a cause that is close to my heart—I am an AFC Wimbledon fan. Today, 14 May, is a significant day for me: in 2002, the three-man FA commission began its deliberations about moving the club to Milton Keynes. I have had loads of messages about that—they all knew I was coming here—and for me, making sure that a club cannot move from its area is fundamental.

At the moment, that is not clear enough in the Bill, and I think it needs to be made fundamentally clear. It talks about financial considerations still being part of the conversation. As a Wimbledon fan, it was the financial considerations of a three-man commission that allowed us to lose the club. We would describe it as our place in the Football League being given to a town in Buckinghamshire. Effectively, that is what happened. For any other club, that needs to be addressed, and fans need to have their voice heard first in that particular conversation. At the moment—I will use this phrase, although I was trying desperately not to say it—the unintended consequence of the Bill is that it legitimises franchising. That is the bit that needs a red line put through it.