Football Clubs in Administration
Debate between John Penrose and Alison Seabeck
John Penrose
If the football authorities find it unacceptable and regrettable, the Government probably do as well. This is something for football governance to take on first. The Government will seek not to intervene if football puts its own house in order. Mr Clarke has made his position very clear, and that should be a very powerful voice.
The football authorities deserve credit for the rules they have introduced in recent years in the areas of financial regulation and club ownership. There are now an early warning system with HMRC in relation to tax returns, transfer embargoes that help curb club spending, new salary control measures in the lowest two leagues, a new means and abilities test that requires proof of funds from prospective owners, and a strengthened owners and directors test. It is welcome that in May, all 72 Football League clubs voted in principle to adopt UEFA’s new financial fair play rules from 2013, which will require clubs to spend only what they bring in. The Government obviously support those moves. Of course, situations such as that in Plymouth demonstrate how much more may need to be done. They also demonstrate that prevention is better than cure. It is far better to avoid going into a company voluntary agreement or insolvency if possible.
We believe it is for the football authorities to continue to challenge themselves to see whether they should tighten their rules further to ensure that clubs do not fall into administration in the first place, in precisely the way I have just mentioned. Equally, the clubs have to take greater responsibility. Supporters should not have to bail out the club because of bad financial management by owners and directors, as both local MPs said.
The stark reality is that for any company or organisation, not least a football club, emerging successfully from administration is likely to be painful and difficult. The focus must be on doing everything possible to avoid clubs getting into such problems in the first place. The Government’s hope and expectation is that as part of the wider process of the Select Committee inquiry’s recommendations, the football authorities will take steps to deal with such challenges themselves. If they do not, all avenues of course remain open to the Government, and we are prepared to look closely at how best to make those changes.
Alison Seabeck
Can the Minister give a reassurance that the Government will not just sit on this matter? I have heard him say that the Government will look at it. This is very important and we do not want another club to go down this route. I urge the Minister for Sport and the Olympics to have further meetings with those involved.
John Penrose
I can reassure the hon. Lady that my colleague the Minister for Sport and the Olympics is particularly exercised about the matter. He is on record as saying, in the Chamber and elsewhere, that he feels that football governance in general is in need of a serious overhaul. I know that he is prepared to be quite activist if he needs to be. Clearly it would be far better for all concerned if football could get its act together and put its own house in order first. That would be better for fans, and for everybody involved in both playing for and running football clubs, than to have a politician intervene. He remains willing to intervene, and will do so if necessary, but it would be a last resort.
I repeat my congratulations to both local MPs on the interest and clear care and passion that they bring to their job on this issue. Everybody will echo their concerns and their hope that the announcement today marks the beginning of a successful new chapter in Plymouth Argyle’s history.
Question put and agreed to.