Football Governance

Clive Efford Excerpts

Thursday 9th February 2012 Westminster Hall

[Clive Efford (Eltham) (Lab)]

I congratulate the Select Committee on the report. I join the Chair of the Committee in the tribute that he paid to our friend and former colleague, Alan Keen. I believe that our former colleague David Cairns was also involved in the inquiry when it started, although sadly he passed away before the report was written.

This is an extensive and detailed report on the future governance of football. It would have been better if we could have had this debate in the full knowledge of the response of the Football Association, but given what has gone on over the last couple of weeks in football, it has given us an opportunity at least to pass some comment on what has been going on. For my part, I pay tribute to the Football Association for showing strong leadership on these issues and particularly on the issue of racism in football. Its leadership has been exemplary. The international football bodies could learn from the way the FA has dealt with that issue. It has acted in the best interests of football, and I sincerely wish it all the best in selecting the best replacement as England manager. If that means that the FA has to take time in doing it and allow people to finish current contracts, it should be given that time to do what is in the best interests of the England football team.

This report and debate give us an opportunity at least to set out the will of Parliament to the Football Association ahead of its response to the report. They allow us to say what we feel about football governance and what we think the FA should respond to. We all have a responsibility to face up to the many challenges that the report highlights. That applies to us all, from the FA at the top, through its executive and the council, to the county FAs. I say to the people in those particular bodies that they have to look to themselves to review the vested interests highlighted in the report, because unless all of us together, as one community of people who love football, are prepared to take on the issue of change in the governance of football, the changes that we need will not come about. It will also require the other governing bodies, the Premier League, the Football League, club chairmen, managers, players, the dreaded agents and, of course, the fans. All of us together have an opportunity to set out a course that will resolve the problems that face our national game. We can begin to work together to take on the tough choices over the future of governance and finance to democratise our game and bring it closer to the fans.

Football is our national game because it is played in every community the length and breadth of the country. Football teams are part of the communities in which they are based, whether it is Manchester United, at the very top of the game—it is one of the biggest and most highly recognised clubs in the world—or Darlington, in the conference league, which is struggling to survive on what is, frankly, a pittance compared with what is paid to a premier league agent, player or manager or the receipts that those clubs get from TV rights. Darlington was saved from complete closure only by a couple of fans, who at the last minute were able to raise £50,000 to buy more time to save the club. Without them, there would be no club to save.

I spoke to my hon. Friend the Member for Darlington (Mrs Chapman) yesterday about the fight to save Darlington football club. The reason why she is not here speaking on behalf of her local community is that she has had to return to Darlington to try to bring together all the different parts of her community that are fighting to save Darlington football club. I urge everyone here to get behind her and the local community—those people who bought that extra time to try to save Darlington football club. Everyone needs to work together in the best interests of the club. Something that we can do here today with the debate and the response to the Select Committee’s excellent report is to put the case for change that will prevent a situation like the one that has affected Darlington football club from arising again.

One of the best examples that I can point to of a local community-based football club is AFC Wimbledon. If we consider its history, notwithstanding the speech from the hon. Member for Milton Keynes North (Mark Lancaster)—I make no comment on Milton Keynes Dons or any criticism whatever; I wish them all the best, except for when they are playing Millwall—we have a club that started from scratch in the local community. When Wimbledon moved to Milton Keynes, it virtually just moved the management structure and a bank account—what was left in it, that is—but the heart and soul of the club clearly stayed with the local community, which exemplifies my point about football clubs being part of their community. We have a remarkable story from what was left of the club: five promotions in nine years and back in the Football League. That just shows what fans can achieve when they work together to support their club and to help in its management and running.

Even some of the mighty clubs are vulnerable in this current climate. We have heard about Leeds United—I will not dwell on it—and Portsmouth. Their experiences testify to some of the pitfalls in football today. Even Manchester United is not beyond controversy over its finances. The green and gold campaign is not just about a dispute with the club’s current owners, but came about because many fans were shocked to discover that, despite a very successful season in 2009, their club would have been in deficit had it not been for the sale of Cristiano Ronaldo for £81 million. Manchester United Supporters Trust is the biggest in the world. Who is to say that even the mighty, internationally recognised Manchester United might not end up a fans’ co-operative some day in the future? If it can happen to Manchester United, why not to other clubs?

The Spirit of Shankly is another group of supporters who were in dispute with the then owners of their club. Its ultimate aspiration, which is still on its website, is to own Liverpool football club. Recently, we have seen the dispute between Chelsea fans, who hold the ownership of Chelsea football club, and the owners, who want to get that ownership back and possibly move the club.

I pay tribute to the hon. Member for Portsmouth North (Penny Mordaunt) for her contribution to the debate. I was alarmed to hear that the administrator would not speak to the local community. I would like to know what the Football League is doing to ensure that the administrator talks to the local community and the fans about trying to save the club.

The problems at Portsmouth are an example of where things are going horribly wrong in our game. Mr Antonov’s bank, Bankas Snoras—I have not made up that name—applied in 2006 to operate banks in the UK, but was turned down by the Financial Services Authority. It was suggested that the bank had repeatedly given incomplete and inaccurate answers to the FSA. The FSA’s website states:

“Bankas Snoras was likely to fail to deal with the FSA in an open and co-operative way.”

Yet in 2011, Mr Antonov was allowed to take over Portsmouth football club. If the FSA had that degree of concern about the financial matters of this individual, it must have been written large for others to ask questions about his suitability to own one of our large football clubs.

Such a case highlights our concerns that due diligence is not taking place and that there are not sufficient fit and proper person tests. Something should have alerted the Football League or the FA to that person’s history, and they should have considered whether the purchase was in the best interests of the club or the game. I do not make that point to ask for an inquiry or to blame somebody for that decision, but we have the right to demand that the governing bodies go back and look at those cases. They should put their heads together and learn from such experiences. They should establish a set of criteria that will try to prevent such sales from happening again.

My hon. Friend the Member for Hyndburn (Graham Jones) made a powerful contribution about Blackburn and vividly described the gaping holes in the administration of our national game. He set out how one of the biggest clubs in the premier league fell foul of the financial regulations and the investigations that are carried out by our governing bodies prior to people taking over clubs.

As the hon. Member for Folkestone and Hythe (Damian Collins) said, under the current regime it is too easy for people to hide the real owners of our football clubs. It is coming out loud and clear from this debate today that that is simply not acceptable.

The report is unequivocal in its condemnation of the issues relating to club ownership. It referred to “startlingly poor business practices” and “unacceptably low” levels of transparency. It is clear that football has begun to move in the right direction to protect the future integrity of the game, but more needs to be done. The UEFA financial fair play regime is a step in the right direction, but we need to remind ourselves, as the hon. Member for Cities of London and Westminster (Mark Field) pointed out, that 56% of debt that is held by football clubs in Europe is held by our Premier League.

The pursuit of survival in the top flight is forcing clubs to over-extend themselves. The slightest hiccup in their cash flow, and they are in serious difficulties. Meanwhile, those clubs with owners with seemingly bottomless pits of wealth can be run with eye-wateringly high losses, which is simply not sustainable. Although we cannot resolve this matter overnight, our debate today, the Select Committee report and the responses from football’s governing body can make a start on addressing the problems that we face. Too many clubs hit a financial brick wall when they run out of money or simply when their financial backers run out. We must move to a system in which clubs have to balance their books, otherwise the current form of our game will not survive.

Every club has links with its local community. Every Member present can provide examples of their clubs doing excellent work within the local community. They may be dealing with young people or trying to tackle antisocial behaviour. I am not just talking about Football League clubs, but clubs at much lower levels. Indeed, clubs at the lowest level have armies of volunteers who go out every Sunday morning or Saturday afternoon to run the line, organise football matches and engage hundreds of thousands of young people up and down the country. Football is right at the heart of our community and something that we all hold in high regard.

It is also members of the local communities who gather outside football clubs when those clubs are in trouble. Who commits their hard-earned cash to save their club? It is always the dedicated fans from the local communities. They are the ones who desperately fight for the survival of their clubs when the chairman or executives have long gone. They do that not just because they feel passionate about their teams, but because of the place that football occupies in the heart of communities up and down the country—from the local pub team to the professional clubs. Fans respect the work that their local clubs carry out in the community, and it is at the heart of what they want from their clubs in the future. From supporters’ trusts to fans’ representative bodies, such as Supporters Direct, the common desire to enhance links between clubs and local communities is right at the heart of what they want to achieve. Fans are the community and they are the future of the clubs; they are fans at the professional grounds and they are the coaches and managers at the lower levels of the game. It is essential that everyone at every level of football respects that fact. Fans are looking to the sports governing bodies to give them more influence over their clubs, with a licensing system that is regulated from above, from the FA down, but is monitored by fans who can be the eyes and ears of the system, and police it at local level. For that, they need access to information, and resources.

[Steve Rotheram]

On access to information, people are probably aware that Everton football club and its supporters are going through a troubled time. Everton football group—Trust Everton—is trying to raise money to purchase Everton’s training ground at Finch Farm. If the FA adapted appropriately, and gave power to supporters, they could access the very information that they need to help their own football club.

[Clive Efford]

That is absolutely right. I could not agree more with my hon. Friend. What we want from governing bodies, who support Supporters Direct, is not just to hold meetings when fans can investigate decision-making processes at their club, and the decisions made, but the opportunity to interrogate the board members. If they identify something that is going wrong, they should have the means to raise that at the most appropriate level. We are not asking just for a fan on the board, or for a meeting every year when fans can come along and ask questions. We want to know what the governing bodies will do and how they will respond when fans ask questions and receive answers that cause them concern. If we do not empower fans, and allow them to investigate the sort of things that my hon. Friend the Member for Hyndburn described about Blackburn, how will we ever have an early-warning system? The fans are the early-warning system to tell us what is going wrong at a club.

[Tom Blenkinsop]

Guisborough Town football club in my constituency—I am its president—has an excellent supporters group network. I am also a fan of Middlesbrough football club, which has a disabled supporters association, an official supporters club, and Middlesbrough Supporters South, which organised an event last night with parmos provided to make sure that exiled Teessiders had some food and fare after the Sunderland game. For all those good intentions and good endeavours, paragraph 37 of the Government’s response states that consideration will be given to the establishment of

“an informal expert group to report on the degree to which there are other issues that create genuine barriers and to provide recommendations for practical action”,

which would allow groups to make informative and informed decisions, and to be able to see what is happening at their club.

--- Later in debate ---

[Clive Efford]

That is absolutely right, and we need a mechanism so that the FA, the Premier League and the Football League can set up a system whereby they can hear the voice of those people at that level, and take action when necessary and when that comes under their jurisdiction.

Finally, I want to consider the role of agents and their influence on the game. That was highlighted in recent court cases, and by my hon. Friend the Member for Hyndburn. In the premier league last year, more than £70 million was paid in agents’ fees, but only £10 million goes to grass-roots football from the Football Association. That cannot continue. In the Football League, the figure was £16.7 million. I know that action is being taken following the Stevens report, which was published in 2007, and some work has been done to tighten up the activities of agents, but those figures are not justifiable. They cannot continue, and more must be done to restrict agents’ activities, and the malign influence that they still have on the game. We must address that factor in our game.

Paragraph 254 of section 8 of the report states;

“There is a need for a strong FA”.

There is a need for a strong and robust response from the Football Association to the issues that have been highlighted in today’s debate, and in the Select Committee’s report. I hope that its shows the same strength that it has shown in the response to the issues that have occurred in the last couple of weeks. I sincerely look forward to reading its response.

--- Later in debate ---

[Hugh Robertson]

I hope that the football authorities will step up to the plate and produce the right response at the end of the month, but if they do not do so, I suspect that the next stage will be for us to hand the formal consultation back to the Select Committee and to get it to look over it and then to seek a recommendation, if necessary, to go to legislation from there. I am keen to do that not only to recognise the Committee’s contribution to the matter, but because it is important that a clear message goes out to the football authorities that there is cross-party support for that, and that it is not a party political issue.

I will quickly run through some of the contributions from individual Members before concluding. The Chairman of the Select Committee spoke, as always, wisely, and is absolutely right that the core issue of the debate is reasserting the FA’s role as football’s governing body. There is a thought that it is some sort of representative organisation with power flowing up from the bottom. That is not my wish; it is not how other sports work, and I do not think that that is the way effective governing bodies work. The FA needs to have control of the national game.

I share the Committee Chairman’s desire to see a board of 10. We normally say that for good governance principles throughout sport we like boards to be between eight and 12, so 10 is perfect. It should have a much better mix of independent expertise, and represent the constituent interests in the game. In that way, the expertise of people who have had a lifetime of involvement in the game can be brought together with people outside who have independent expertise.

The reform of the council is important, as the Committee’s Chairman has said. It is there to be a parliament; it is not an executive body. He is right that the principle of financial fair play should underpin the licence. The full implications of the European ruling are as yet unclear. Lawyers are working on that issue and he is right to say that it will have an impact. What he and other hon. Members have said about supporters’ ownership is what we want to achieve. It is a spectrum with a dedicated fan or supporter liaison officer at one end, and supporters who sit on the board at the other. Different solutions will work in different ways for different clubs, but the current situation is clearly some way from where it ought to be.

The hon. Member for Liverpool, Walton (Steve Rotheram)—perhaps I should say the hon. Member for Everton and Liverpool football clubs—spoke passionately as always. He is right to concentrate on the make-up of football boards. Until we get right the corporate governance at the top of the game, little else will be achieved.

The right hon. Member for Bath (Mr Foster) was right to speak powerfully about the importance of financial fair play, governance and licensing, and he will have an important role in moving forward the debate on supporters. The work that the Deputy Prime Minister is doing on shareholder involvement will be key to unlocking that issue. As well as encouraging football clubs to do something, we must encourage owners to make available more of their shares for supporters’ groups to buy. How we do that will be a key part of unlocking the debate.

The hon. Member for Rutherglen and Hamilton West (Tom Greatrex), quite properly, paid tribute to the work of Supporters Direct, and I pay tribute to the work that he did during his time at Fulham. He is right to emphasise the crucial link between a club and its ground. Selling grounds is not always bad, but often it is, and the hon. Gentleman was right to draw attention to that issue. My hon. Friend the Member for Portsmouth North (Penny Mordaunt), who was speaking in the main Chamber a moment ago, was right to congratulate her newly formed supporters trust. I wish her well in her discussions with HMRC. I agree that a community buy-out would be an exciting new chapter for her club.

I am not sure whether I should intervene in the private dispute between Wimbledon and Milton Keynes, except to pay tribute to the excellent community work done by both clubs involved. The hon. Member for Mitcham and Morden (Siobhain McDonagh) and I discussed the matter at some length in a recent Adjournment debate. I do not know enough about Blackburn football club or its owners, or indeed about chicken burgers, to comment at any length, but the situation described by the hon. Member for Hyndburn (Graham Jones) is cause for concern. My hon. Friend the Member for Folkestone and Hythe (Damian Collins) made a powerful case for reform. No one would doubt the veracity of his remark that if we are to have a fit and proper person test, we need to know the person involved, and we should pick up on that in the new licensing proposals.

My hon. Friend the Member for Cities of London and Westminster (Mark Field) was right to draw attention to the importance of wages. I had not heard the figure of 60% of turnover, but it seems prudent. When one considers that that figure is 88% in the Football League—I think that was the figure given—one understands why, when asked what he thought was its biggest problem, its chairman simply replied: “Debt.” My hon. Friend also asked about an independent regulator for football. I think that the Committee considered that, although it is not something on which we are consulting at this stage—I hope that the Chairman of the Committee will correct me if I am wrong.

I pay tribute to the work done by my hon. Friend the Member for Suffolk Coastal (Dr Coffey) as a parliamentary fellow for the FA. She is right to draw attention to the excellent work done by David Sheepshanks at St George’s Park. There are always as many reasons to be cheerful about English football as there are to be miserable, and one of the great developments of the next few years will be the introduction of St George’s Park, and the way that it will turbo-charge the production of coaches and officials in the game at grass-roots level. It is an extraordinarily exciting development.

My hon. Friend the Member for High Peak (Andrew Bingham) spoke powerfully in favour of supporters’ representation. He must be the only person from my 10 years in the House who has described a Select Committee report as a thumping good read—a great tribute to the Committee’s Chairman. I thank the hon. Member for Eltham (Clive Efford) for his contribution. As I said earlier, cross-party support is vital, and like him, I send my best wishes to those hoping to save Darlington football club.

We await a response from the football authorities by 29 February. So far, their approach has been encouraging and they have worked together constructively. I hope that they will produce something that will allow us to move on by the end of the month. It is fair to warn people that this is a complicated subject involving many different views and passions that are running high. If we are to achieve a solution by consensus—I hope we do—we will need a bit of compromise and give and take from all sides.

I feel that good progress has been made on a licensing system. The principle is that an overall licensing system will be held by the FA, with a degree of subsidiarity to individual leagues. Progress has been made on tidying up the work of the council and shareholders, but reform of the board is proving more difficult.

[Clive Efford]

I wanted to say that there is no quick fix. This is a huge problem that has grown up over many years, mainly since the creation of the Premier League. It is something that will take time to fix, and we must work together consistently on that.

[Hugh Robertson]

I thank the shadow Minister for those remarks. If anyone has any doubt about whether something as arcane as a board is important to the process, they should consider that if this inquiry is about anything, it is about governance and the way that the game is run. The FA board is crucial. I am delighted by the introduction of the two independent non-executive directors. In the short time that they have held their posts they have already made a considerable impact, including on events in recent days. For the outside world, however, reform of the board is emblematic of the process. Crucially, if one looks at the Committee’s report, unless the board is reformed and the FA has a proper system of corporate governance, it becomes difficult to achieve a great number of the other things that lie further down the stream.

I will hand the debate back to the Chairman of the Committee for the final few minutes. Once again I thank him for his leadership and the Committee for its report. We are committed to this process, and I hope that by the end of the month we will have the right response from the football authorities. They should be in no doubt that if such a response does not arrive, the House will legislate, although I hope that things will not come to that. I hope that through the process under way we will see long-term and systemic change in our national game.