Coventry City Football Club

Helen Grant Excerpts

Tuesday 2nd September 2014 Commons Chamber

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

I thank the hon. Member for Coventry South (Mr Cunningham) for securing this important debate, and I thank him and others for the valuable contributions they have made this afternoon.

As I have said before, the preservation of football clubs up and down the country remains a matter of great importance to me and to the Government. We debated this issue last October in my first few weeks—days, even—as the new Minister for sport. Since then, the Football League and I have maintained a close interest in the resolution of this unfortunate dispute involving Coventry City football club and the return of Coventry to the city. Football clubs remain a very valuable part of local communities, and every care should be taken by all owners and stakeholders to protect their long-term financial futures.

It has therefore been very sad to see Coventry City football club beset by serious financial trouble in recent years. I know the Football League appreciates that its initial decision to allow Coventry City to temporarily relocate to Northampton was not a popular one with Coventry supporters. Although understandably difficult for supporters to accept, the temporary tenancy at Northampton Town’s Sixfields stadium was deemed to be necessary by the Football League to ensure that Coventry could continue to take its rightful place in the football league in the short term.

Allowing the club to play in Northampton has at least ensured that Coventry was capable of playing its home matches in the league while all parties maintained their efforts to resolve the ongoing disputes. The recent case of Rotherham United demonstrates that the continuation of a club’s presence in the football league at another stadium can be a positive step towards a long-term solution. I am therefore delighted to hear today that the club and stadium owners have agreed terms to get Coventry back playing within the city this season—imminently, in fact—at its home ground.

I pay tribute to the hon. Member for Coventry South, the right hon. Member for Coventry North East (Mr Ainsworth), my right hon. and learned Friend the Member for Kenilworth and Southam (Jeremy Wright), my hon. Friends the Members for Nuneaton (Mr Jones) and for Folkestone and Hythe (Damian Collins) and others who have worked tirelessly with loyal supporters. I shall think of them all when Coventry plays Gillingham at the Ricoh Arena this weekend: it will be a special evening indeed.

There is a great deal of focus on the amount of money in the top tiers of football, but I recognise that many clubs competing in the lower divisions operate on a very different scale. Coventry’s problems are rooted in several years of financial issues that unfortunately are ongoing.

The evidence given to the Culture, Media and Sport Committee by the Football League’s chairman acknowledged that debt is the

“single biggest problem for football.”

I share his belief that if football clubs ensure that their debt is genuinely sustainable, transparency of ownership, supporter buy-in and co-operative ownership will be much easier to deliver.

I share the frustrations of supporters and hon. Members at the football authorities’ slow progress in implementing some of the long promised and much needed reforms to the game, a key part of which is improved supporter engagement at club level.

The football authorities must find ways to improve supporter engagement beyond the customer relationship and recognise supporters as an integral part of clubs’ success. That is why my Department is working very hard on Supporters Direct’s proposal for an expert group on the barriers to supporter ownership in football. We hope to launch the group in the near future. It will include representatives from across football, relevant professional experts and representatives from a variety of supporter-owned clubs and supporters trusts. I am pleased that the proposal retains support across football’s authorities, demonstrating a critical continuing commitment to supporter engagement within the sport.

Supporter representatives on boards and better engagement could and will in many cases lead to fans being better informed about a club’s activities, such as its financial standing and the identity of its owners, and to their being genuinely consulted, as they should be, as part of the club’s decision-making process on matters of real importance, whether financial or cultural. I look forward to the expert group’s recommendations on how more help can be offered to supporters now and in the future.

Having said all that, I must acknowledge the progress made by the football authorities in introducing new rules in recent years, such as a strengthening of the owners and directors test, which has been mentioned and about which I shall say a little more in a moment, as well as a new means and abilities test that requires proof of funds from prospective new owners, an early warning system with Her Majesty’s Revenue and Customs on tax returns, transfer embargoes, salary caps and the adoption of financial fair play principles across the 92 professional clubs.

Club insolvency has been declining, but it has remained a common problem in recent years. At the same time, TV revenues and match attendances are as high as ever. The implementation of financial fair play principles should lead to responsible spending by clubs and, as a result, I hope, fewer incidents of club insolvency at the top of the pyramid. The strong intention is that the financial fair play regulations will remove the need for football to rely so heavily on the football creditors rule in club insolvencies.

The football creditors rule has been mentioned by all hon. Members who have spoken.

Governance has also been mentioned by many hon. Members. The hon. Member for Coventry South queried whether the Government were doing a U-turn on their governance plans and I assure him that we are certainly not doing that. Governance is essential; it is the foundation of everything and of all good structures. Without decent governance a structure has no chance of surviving; there will be no chance of there being the strength to support a massive structure. It is very important to me personally. I want the football authorities to do what they need to do. A start has been made: there are smaller boards; there is a new licensing system to deal with financial matters; and various changes have been made on supporter engagement, with the introduction of supporter liaison officers. But I want much, much more to be done. I have regular meetings with the football authorities, and I will continue to raise these issues as a matter of urgency, saying that we need to see progress. If progress is not made, we of course have the option of legislation—we always have that option.

[Mr Jim Cunningham]

I do not doubt the sincerity of what the Minister has said, but this has been going on for a number of years. Has she set a deadline? A number of organisations are looking at football in general terms, but does she have a deadline when she will say, “Look, we have not seen enough progress, so we are going to do something about it”? Across the House, we all think that something has to happen. This is not a reflection on the Minister, because she has not been in her post for very long, but we are reaching the point where a deadline needs to be set, in order to get some real action from the Football League.

[Mrs Grant]

I have robust and candid conversations with the football authorities. I agree that we need to see some more progress. Some has been made, but we need more. I will be meeting them on Friday, and I will certainly relay to them what has come out of this debate and the crucial need for us to start to see further progress on a number of matters.

The issue of ownership was raised by all hon. Members in the debate and, in particular, by my hon. Friend the Member for Folkestone and Hythe. Again, I reassure him that the football authorities really do take club ownership very seriously, which is why the owners and directors test applies to all clubs in the Premier League, Football League and Football Conference, and in the three leagues below.

[Damian Collins]

Will the Minister give way?

[Mrs Grant]

I will, but if my hon. Friend will just let me finish my point, he may find that it deals with the issue he is raising. Given what he and others have said today, and what I have heard—I have been listening very carefully indeed—I am happy to discuss with the authorities on Friday, and at subsequent meetings, whether they could make any improvements to the owners and directors test, or any other test that might help to deal with this situation.

[Damian Collins]

I am glad to note what my hon. Friend has just said. My concern, and that of other Members, is that the test, as it stands, is totally inadequate. If anything, the recent case at Leeds United demonstrates that the Football League does not have the legal power to apply the test as it might wish. If it sees someone from overseas coming in, as in the case of Mr Cellino, with a fraud conviction which happens to be spent, the Football League is subject to a legal challenge to try to prevent that person from taking over the club. I wonder whether there has to be some sort of statutory underpinning of the fit and proper person test to allow the Football Association or the Football League to enforce it properly.

[Mrs Grant]

I agree that certain improvements—further improvements—may need to be made to the test. We are in a better place than we were before it was strengthened, but I still have some concerns. As I said to my hon. Friend, I am happy to raise all these issues with the football authorities to see what further improvements can be made. The football creditors rule was raised again by most hon. Members, and I have touched on that. I have to say at this stage that there is no plan to legislate on that rule. The industry is trying to make changes from within. The proper implementation of the financial fair play rules should hopefully make dependency on the football creditors rule much less likely and reduce it considerably. Those were, I think, the main issues that were raised by hon. Members.

I just want to pick up one point in relation to the Football League, which has come in for a bit of criticism today. I recall Members talking about lack of leadership and the fact that it could have done more. Having looked at this situation carefully and worked with the League closely since being appointed the Minister for Sport, I think it has had to make a difficult decision in difficult circumstances. It came up with a sustainable solution, with the fans, MPs and journalists, which has allowed this great club still to be in the League. It will be back at home very shortly, hopefully focusing on football and continuing to do very well.

In conclusion, now that the differences have hopefully been resolved for the good of the club, the loyal fans and the wider local community, I am delighted that Coventry City football club may return to the city and have the chance to concentrate on football matters and their position in the League, which is important to their fans.

The Government’s strong expectation, guided by the Select Committee’s recommendations, is that the football authorities will continue to make progress in making the necessary changes and reforms. I will raise these issues with them on every occasion that I meet them in bilateral meetings at the Department for Culture, Media and Sport. My Department will also continue its ongoing dialogue with the football authorities to ensure that the support for clubs continues and that progress on governance reforms is maintained.

In the meantime, I wish the Sky Blues the best of luck for the season ahead, and I look forward to their first fixture playing back in Coventry very soon.

Question put and agreed to.