Football Governance Bill [ Lords ] (Sixth sitting)

Clive Betts Excerpts

Committee stage
Tuesday 10th June 2025 Public Bill Committees

[Stephanie Peacock]

The schedule outlines the mandatory licence conditions that the regulator will attach to all licences as standard, regardless of the club’s circumstances. Those conditions are related to core areas of financial management, corporate governance, fan engagement, and reporting. They will form the foundations for the overall improved standards and sustainability of a club. Long-term financial sustainability is at the heart of the Bill, and is vital to making clubs more resilient to financial difficulties.

The financial plan condition requires clubs to present a plan that allows the regulator to understand the risk profile of the club and its plans for mitigating risks if necessary. That will include contingency planning and plans to wind a club back to a sustainable state if it faces unexpected financial difficulty. Those are not overly onerous requirements, but basic business planning that most well-run clubs will already be doing. It is anticipated that the regulator will help clubs update their plans if they exhibit unmanaged risk. If the updated plan still exhibits excessive risk, the regulator can place discretionary licence conditions on a club to help them meet the financial resources threshold requirement. That ensures that clubs can be ambitious but, equally, that failing to achieve those ambitions does not put the long-term financial sustainability of the club at risk.

A key tenet of a well-run business is good corporate governance, and the regulator will look to instil that into all licensed football clubs through the mandatory condition. Corporate governance standards in the industry need improving, with many clubs lacking even the most basic of good governance arrangements, such as a proper, functioning board. In consultation with the Football Association and other relevant stakeholders, the regulator will prepare and publish a code of practice about the corporate governance of regulated football clubs. Through that condition, licensed clubs will be required to submit a statement detailing how they are applying the code of practice. That will include what action they are taking to improve equality, diversity and inclusion.

Given the rich variety of clubs and fanbases, good supporter consultation will look different from one club to another. The fan engagement licence condition has been designed to reflect that, empowering the regulator to impose specific requirements on the form and frequency of supporter consultation where necessary. That mandatory licence condition works in tandem with the fan engagement threshold requirement, which is in schedule 4. The mandatory licence condition will be the minimum requirement for all clubs.

[Mr Clive Betts (Sheffield South East) (Lab)]

Will the Minister give way?

[Stephanie Peacock]

I will address some of my hon. Friend’s points, if he bears with me for a moment. If I do not, I will be very happy to give way.

All clubs must regularly consult a representative group of fans or a group elected by the club’s fans to represent them on the relevant matters listed in the Bill. The regulator can specify that the group is formed via fan elections—an additional measure the Government added to ensure the fan group can be independent from the club. The threshold requirement in schedule 4 then empowers the regulator to go further on fan engagement, if needed. It allows the regulator to impose discretionary licence conditions on clubs relating to fan consultation. There are several types of fan engagement that could be used to meet that requirement. No one way has been specified on the face of the Bill in order to allow for a bespoke approach to be taken at each club. We expect, however, that we would likely look to utilise existing structures where appropriate. Those would likely be organisations such as supporters’ trusts or fan advisory boards, which are often key independent fan bodies.

To address the points made by my hon. Friend the Member for Sheffield South East, for the most part, individual clubs will be in the best position to understand the demographics of their fans. The regulator will be able to provide guidance for clubs on how best to consult fans, which will include how to approach consulting across a widespread fan base. It is, however, vital that they engage with a representative group of fans, and therefore, if a section of the fan base has not been engaged with, the regulator has the ability to specify the club should meet with them. That will ensure that clubs have an appropriate framework in place that allows them to meet regularly and consult the group on key strategic matters and supporter interest.

Clubs in the lower leagues will tend to have more a more local fan base, whereas larger clubs will tend to have fans from across the world. That diversity is part of the reason why the English football pyramid is so special. It is also why we want to implement proportional and flexible proposals that work for clubs across the pyramid. The regulator will implement a minimum requirement for fan engagement, which the regular fan consultations will be a significant part of, alongside protections for club heritage. I hope that answers my hon. Friend the Member for Sheffield South East. I am happy to give way if not, or he can contribute to the debate.

[Mr Betts]

I will contribute to the debate.

[Stephanie Peacock]

Perfect. The annual declaration condition requires a club to submit an annual declaration to the regulator, which sets out all the notifications that the club has made, or should have made, to the regulator in the preceding 12 months. Broadly speaking, these notifications relate to changes in the circumstances affecting the club that the regulator needs to know about to regulate effectively. That includes any non-compliance related to the club. A club will also have to issue a statement even if there are not any matters to notify the regulator about. That will create a formal touchpoint each year in lieu of any licence renewal; the emphasis will be on clubs to declare all relevant changes in circumstances and compliance against which they can then be held accountable.

[Mr Betts]

It is a pleasure to have you back in the Chair, Mr Turner. The Minister is doing all she can to deal with situations that will apply to most clubs. The problem is those owners that do not want to engage. They will try to avoid this responsibility because they see it as an infringement of their right to run their club in the way they want.

I have to come back to Sheffield Wednesday because Mr Chansiri has a track record on this. He set up an engagement panel with fans, but he invited the fan groups he wanted to invite. Worse than that, once someone goes into a meeting with him, they have to sign a statement to say that they will not divulge any of the things that happen in that meeting. It is a closed shop.

I sat down with a myriad of different groups including the supporters’ trust, which is the biggest fan group by a long way, and several other groups, including the women’s group and the 1867 group. We formed an umbrella group to try to bring all the fan groups together. The club spoke to the groups and said, “If you get involved in the umbrella group, you will not be allowed on the engagement panel.” It is either/or because that is seen as an attack on the club and the chairman. You could not make it up—well, you can make it up, because we can see how the club is run. That is the problem.

How do we get around that situation? I was told the other day, “The chairman engages with fans. He has actually had two meetings of five hours each with fans.” But he does not answer any questions. When I asked one of the officers at the club why he will not answer questions, they said, “Well, they wanted to know what his business plan was.” It is not a bad question to ask, and that is exactly what the regulator is going to have the powers to do.

I am still not absolutely certain on what happens when the club tries to control the situation. Does the regulator then arbitrate? Does the regulator come in and say what they think good fan engagement looks like? It would be very helpful if the Football Supporters’ Association were to be given some role in that, because it understands fan engagement and fan involvement better than anyone. It knows what happens on the ground, it knows the tricks that the clubs pull and it knows how genuine fan engagement can be developed and implemented. I am not sure a new regulator will necessarily have all that intrinsic knowledge about what happens at clubs. Some role for the FSA in this would be helpful. In particular, it would help when problems arise of the sort that I have just explained.

I am sure Sheffield Wednesday are not the only club where owners do not really want fans around—they just want them to turn up, pay their money and go away. The Chair probably cannot get involved in the debate, but I can see you nodding, Mr Turner, because I am aware that there have been a few problems at Hull in that regard in the past. I ask that the Minister provide a bit more of an explanation and flesh this out further. In particular, sub-paragraph 8(2) reads:

“So far as the condition requires consultation with persons within sub-paragraph (1)(a), the condition may require the club to constitute a group of such persons”.

I know immediately how some clubs will constitute that group, and it will not be proper fan consultation.

[Stephanie Peacock]

I am grateful to my hon. Friend for his contribution. We would obviously expect the regulator to build on relevant expertise internally and via consultation. I have worked with and met representatives of the FSA a number of times. I pay tribute to the work they do, and I am sure that is the sort of group that the regulator will very much draw on.

My hon. Friend will completely understand why I am slightly reluctant to comment on live examples. That does not mean that I am not sympathetic to the points he makes on behalf of his constituents. I draw his attention to my remarks about how, if a section of the fanbase is not being engaged with, the regulator has the ability to require a meeting with the club. Where an owner or a club are not engaging, or not engaging effectively, the regulator will be able to intervene.

[Mr Betts]

It is helpful of the Minister to have elaborated on that. Would she go a bit further and say whether she anticipates that the regulator will engage with the Football Supporters’ Association when difficulties arise and there needs to be an independent look at fan engagement with a club?

--- Later in debate ---

[Stephanie Peacock]

It is important for sustainability that incumbent owners and officers continue to be suitable custodians of their clubs. That is why the Bill gives the regulator the power to test incumbents if it has grounds for concern about their suitability. That will help mitigate the risk of harm from individuals already in the system.

Clause 33 places a duty on incumbent owners and officers, as well as regulated clubs, to notify the regulator where they consider there to have been a relevant material change in circumstance. Notably, this is a change of circumstances that could have an impact on whether the regulator would find the individual suitable to be an owner or officer of the particular club—for example, if an officer became subject to criminal or relevant civil proceedings that the regulator was not previously aware of, or if an owner’s source of wealth had changed in some way that is relevant to whether it is connected to serious criminality.

The notification must explain the material change in circumstances and its relevance to an individual’s suitability. If this information gives the regulator grounds for concern about the incumbent’s suitability, it has the power to test them under clauses 34 or 35. Ensuring that the regulator is aware of relevant material changes will better enable it to ensure that incumbent owners and officers continue to be suitable.

Clause 34 provides the regulator with the necessary powers to test incumbent owners already in place in clubs where there is concern about their suitability. This allows the regulator to tackle any risks to clubs from unsuitable owners already within the industry.

[Mr Betts]

I just want to be clear about the grounds on which the regulator can investigate or intervene. We talked about the source of wealth being criminal, which has been clearly laid out. However, if the source of wealth is one that has diminished substantially, so the owner cannot now show that they can continue to run the club, is that a reason for the regulator to consider intervening?

[Stephanie Peacock]

There are different thresholds for new owners and incumbent owners; with new owners, it is grounds for suspecting, but with incumbent owners, it is the balance of probabilities. Of course, the latter is a higher bar, given the existing owner’s property rights. I do not know whether that fully answers my hon. Friend’s question, but I can write to him with some further detail.

[Mr Betts]

It would be helpful if the Minister could write to me because this is a big question in football. There are owners who promise the world and then find that they cannot deliver it; indeed, they can deliver very little. I come back to Sheffield Wednesday, but there have been other owners, such as Ken Bates at Oldham, who set up a structure that could not then be financially maintained. It is important to understand whether the regulator has power in that circumstance to intervene.

[Stephanie Peacock]

Absolutely, and I refer back to some of our earlier conversations. If we take the regulatory regime as a whole, at the very basic level, owners need to have a business plan, consult their fans and be fit and proper—those three things work together. As we spoke about earlier, if the business plan does not match the source or amount of funds, the regulator can go back and direct them. Perhaps that provides a little more clarity, but I am very happy to add more detail.

[Mr Betts]

I think the Minister and I are getting there. Obviously, the business plan and the source of funds come with a new owner and then continue. However, with an owner already in place, does that still apply? Can the regulator say, “Wait a minute. I need to see a business plan and a source of funds to ensure that you are a fit and proper person”?

[Stephanie Peacock]

In certain circumstances. I am hesitant to use the word “new” information, because the information may not be new. However, if relevant information comes to light for the regulator, which may be new or pre-existing but relevant, the regulator can look at it. I draw my hon. Friend’s attention to the difference in the threshold between new owners and existing owners.

[Mr Betts]

I will make just one more point—I think it is important that we understand precisely what this means. Clause 33 talks about an owner or club having a responsibility to notify the regulator. Surely that does not mean that nobody else could notify the regulator, if relevant information came to them. Could they then pass it on for the regulator to look at?

[Stephanie Peacock]

Yes, absolutely. That goes back to the discussion that we had earlier on new clause 15. The regulator will take credible information seriously.

Clause 34 provides the regulator with the necessary powers to test incumbent owners—those already in place—of clubs, where there is a concern about their suitability. It will allow the regulator to tackle any risk to clubs from unsuitable owners within the industry, while recognising that there are suitable owners already in the system who do not need to be tested. We want to ensure that the approach is not overly burdensome for the regulator, and we do not want to deter investment in the game. Incumbent owners can be assessed to ensure that they have the requisite honesty and integrity, and are financially sound enough, to own a club. If the regulator has information that gives it grounds for suspicion, incumbent owners can also be tested on their source of wealth. The regulator will need to establish if wealth is connected to serious criminal conduct, including crimes such as drug trafficking or fraud. The regulator will not remove incumbent owners because of a mere suspicion about their source of wealth. Rather, an incumbent owner must be treated as unsuitable if the regulator is more sure than not that their source of wealth is connected to serious criminal conduct. The clause will ensure that the regulator has the appropriate powers to test incumbent owners where a risk of harm arises.

Clause 35 provides the regulator with the necessary powers to test incumbent officers—those already in place—of clubs, where a risk of harm arises. As with the provisions for owners in clause 34, testing of officers is limited to cases where there is concern about suitability. It allows the regulator to tackle any risks to clubs from unsuitable officers already in the industry. Incumbent officers can be tested to ensure that they have the requisite honesty, integrity, competence, and are financially sound enough, to continue in their role.

The Government are aware that finding an incumbent owner or officer unsuitable would bring about significant consequences for that person, and may cause concern for clubs or fans. That is why, when the regulator is minded to fail an incumbent owner or officer, clause 36 gives the individual and the club concerned an opportunity to make representations before the regulator makes its final decision. That allows an officer or owner an appropriate opportunity to argue their case before the regulator finds them unsuitable. The regulator has the ability to test or re-test incumbent owners and officers, which will prevent unsuitable custodians from harming clubs over the long term, not just at the point of entry. That will help to ensure the sustainability of clubs over the long term, benefiting football now and into the future. I therefore commend the clause to the Committee.