Coventry City Football Club

Helen Grant Excerpts

Tuesday 22nd October 2013 Westminster Hall

[The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mrs Helen Grant)]

It is a great pleasure to serve under your chairmanship today, Mr Caton. I congratulate the right hon. Member for Coventry North East (Mr Ainsworth) on securing this important debate. The contributions that he and others made have been valuable, powerful and emotional.

There is no doubt at all that the preservation of football clubs up and down the country remains a matter of great importance. I assure all hon. Members present and the right hon. Gentleman that football governance and the collective determination to improve the way that our beautiful game is run continue to be extremely important to the Department for Culture, Media and Sport.

[Mr Scott]

Will the Minister ask the Football League, because it has been complicit in the problem, whether it can mediate in the dispute around getting Coventry City back to where it belongs, which is in the city of Coventry? I say that as a Leyton Orient fan, against which Coventry City will be playing in three hours’ time.

[Mrs Grant]

I will deal with my hon. Friend’s latter point first. At the end of my speech, I was going to wish luck to Coventry City against Leyton Orient, but that sentiment still holds and I am aware that the teams are playing tonight.

The Football League is involved. I know that the right hon. Member for Coventry North East has been in touch, that it wrote to him today and that it is keen to chat with him. I also know that the organisation had a fruitful and positive discussion with supporters on Friday 18 October. I hope that important dialogue continues.

It is sad that the famous name of Coventry City football club—the Sky Blues—can be added to the list of football clubs, including Leeds United, Portsmouth and Crystal Palace to name but a few, that have suffered serious financial difficulties. It is worrying that more than half the Football League’s 72 clubs have been insolvent at one time or another over the past 10 years. At the same time, however, match attendances and TV revenues are higher than ever. If football today is that popular with supporters, advertisers and broadcasters, we must ask why so many of our clubs are faced with the prospect of not owning their grounds, why they are carrying such high levels of debt and why there are so many sporadic changes in ownership. Coventry City, unfortunately, is the case in point.

When the Football League chairman, Greg Clarke, gave evidence to the Select Committee on Culture, Media and Sport, he stated that debt is

“the single biggest problem for football”.

He believes that if football clubs can ensure that any debt is genuinely sustainable, transparency of ownership, supporter buy-in and co-operative ownership will also fall more easily into place.

I have probably had only 10 to 12 working days in this new job, which is not an awful lot, but I have already had considerable dialogue with football authorities. I am looking forward to getting stuck in, to dealing with the issue and to helping and working with them to drive through much more quickly the much-needed reforms to the game.

[Mr Dave Watts (St Helens North) (Lab)]

Will the Minister give way?

[Mrs Grant]

I need to make several points and I am running out of time, so I will not.

The three key areas where we need real progress are the licensing system for clubs, the introduction of empowered—that word is important—and balanced boards and improved supporter engagement at club level. My Department continues to urge the football authorities to introduce full transparency around club ownership. The licensing system should set out stricter criteria both around owners being fit and proper and around the requirement to have clearly defined business plans for how they will safeguard clubs’ futures. Taken together, those would provide greater clarity for clubs’ supporters.

Having said all that, the football authorities deserve some credit for the rules introduced in recent years, including an early-warning system with Her Majesty’s Revenue and Customs around tax returns, transfer embargoes that help to curb club spending, a new means-and-abilities test and a strengthened owners and directors test. I also welcome the fact that the football authorities and all 92 professional clubs have now adopted the financial fair play principles, the implementation of which should lead to reduced spending by clubs and, I hope, fewer incidents of club insolvency. We hope the licensing model being developed will strengthen the relationship with fans, who should be better informed about a club’s activities, such as its financial standing and owners’ identities. Supporters should be consulted as part of a club’s decision-making process.

I am also pleased to hear that the Football Association is setting up a new separate implementation body, the football regulatory authority or FRA, to oversee the implementation of on and off-field regulatory policy. The new club licensing system and the financial rules that underpin it will be key to ensuring the long-term sustainability of clubs, but further detail is required from the football authorities on the content of the licence and the new FRA’s role in monitoring and enforcing FA rules and regulations.

I want to attempt to respond to several of the issues raised by the right hon. Member for Coventry North East. Regarding the activities of the administrator and the liquidator, I genuinely suggest that he discuss such matters with the Football League, hopefully in the not-too-distant future. If he is not satisfied with what he hears, he may have to take independent advice.

The right hon. Gentleman also asked, as he had done outside this Chamber, whether my predecessor, my right hon. Friend the Member for Faversham and Mid Kent (Hugh Robertson), received a response to a communication that he apparently sent to the Football League in July this year. I have spoken with officials and I understand that no letter was sent, but a conversation may have taken place. I will certainly look into whether that conversation happened and what the outcome was and get back to the right hon. Gentleman.

Regarding supporter ownership, owning football clubs is a challenging and risky business, but fan ownership has seen several successes abroad. It is for the football authorities to agree what works best for this country, but there is a place for all types of ownership. Supporters will always have the best interests of the club at heart and I am delighted that AFC Wimbledon, Brentford and Exeter City are now owned or part-owned by their fans.

Finally, the right hon. Gentleman mentioned the club returning to Coventry, a topic which is important to him and others. The Football League wants Coventry to return to its home city and will do what it can to assist in that process, but the matter is also one for the owners and administrators.

I genuinely hope that Coventry City’s issues are resolved very quickly. I want to see the club return to the city as soon as possible and be given the chance to regain its position in the league. Notwithstanding the points penalty imposed at the start of the season, the team is playing like a top-six side and doing well. Coventry City is a great club—no disrespect to Leyton Orient—that does not deserve to be in its current position and I wish it well.

The stark reality is that many clubs and companies will experience periods of financial difficulty, with some enduring the pain of administration. The focus for the football authorities, however, must be on doing all that is possible to avoid clubs ending up in this dreadful position. The Government’s hope and expectation is that, following the Culture, Media and Sport Committee’s inquiry, recommendations are pursued and the football authorities will be able to make such changes themselves.

My Department will continue its dialogue with the football authorities in the coming months to ensure that the necessary action is taken to deliver these important governance reforms, but if they do not, the Government have made it very clear that we will look to introduce legislation.