Olympics and Paralympics (Funding)

Debate between John Whittingdale and Mark Field

Monday 27th February 2012 Commons Chamber

[Mr John Whittingdale (Maldon) (Con)]

Thank you, Mr Speaker, for this opportunity to debate the funding of the Olympics and Paralympics, although I hope that you will be generous in allowing us to examine the wider benefits that will flow from the funding of the Olympics.

It is now nearly seven years since the day on which it was declared that London would be the host city for the 2012 Olympic and Paralympic games, and I suspect that almost everyone will remember where they were and their reaction when the news was announced. It was undoubtedly fantastic news for Britain, and it was rightly celebrated, but I think that quite a lot of us also thought, “Oh dear, what do we do next?” One of the things that the Culture, Media and Sport Select Committee, which I chair, decided to do was to hold regular sessions to monitor and scrutinise the work being done to prepare for the greatest sporting event that this country has held. Over the past seven years we have held annual sessions with the chairmen and chief executives of the Olympic Delivery Authority and the London Organising Committee of the Olympic Games and Paralympic Games and with the Secretary of State for Culture, Media and Sport—first the right hon. Member for Dulwich and West Norwood (Tessa Jowell) and now my right hon. Friend the Member for South West Surrey (Mr Hunt).

It is worth observing at this point that one of the striking things about the policy towards and preparation for the Olympics is that not only did London’s bid enjoy cross-party support from the start, but in all the time since it was announced as the host city, despite occasional, small differences across the Chamber, which were inevitable, in the main both parties have worked well together. Certainly, I believe that my party did what it could to support the right hon. Member for Dulwich and West Norwood when she was Secretary of State, and since then she has worked with us to ensure that the preparations go ahead smoothly and are not marred by partisanship or political point scoring. We have now—[Interruption.] I am reminded by a cough that that applies not just to the two main parties. I pay tribute to the support and work throughout the entire seven-year period of the right hon. Member for Bath (Mr Foster), who has been a stalwart on behalf of the Liberal Democrats.

We are now only 151 days away from the start of the games, so it seems an opportune moment to debate the progress that has been made and how close we now are and to focus, in particular, on what we hope to achieve by hosting them. Inevitably, attention initially focused very much on questions of funding and how we would afford to pay for the games. Indeed, there was some anxiety about whether we could finish the work in time for the games—something that has caused concern for previous host cities.

[Mark Field (Cities of London and Westminster) (Con)]

One of the concerns, if not of many Members of the House, then of many people outside it, is that very little attention seems to have been paid at the beginning to how much this would all cost. Various figures were bandied around at that juncture, and £2.5 billion was suggested as the cost of the overall package. I accept that it is good that we have the games and that there is unity across the House about that, but it is equally important that there is an open debate on funding and other related issues, particularly the question of whether there will be the legacy we all hope for in that part of east London, which we will not have a definite answer to for at least another decade. One of the concerns at the outset—of course, that was a very different economic time—was that there was very little scrutiny of the whole funding issue.

[Mr Speaker]

Order. Notwithstanding the fact that the hon. Gentleman speaks for two cities, as opposed to a smaller area, a degree of economy when intervening from now on would be appreciated.

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[Mr Whittingdale]

I agree that transport is going to be one of the great challenges, and it is one to which I shall refer and about which, I suspect, other Members will want to talk. I agree also that the reserved lanes have the potential to cause a great deal of irritation to people sitting stationary in traffic jams next door to them. I am sure that it is something my hon. Friend the Minister for Sport and the Olympics, too, is keenly aware of, and he may wish to speak about it when he responds later.

[Mark Field]

On that related point, sensibly most people recognise that there are huge security issues around the Olympic games that mean that Heads of State and Ministers will need to be looked after. The bigger concern that I have, unlike the hon. Member for Rhondda (Chris Bryant), is that a whole lot of flunkeys, hangers-on, junior people with the International Olympic Committee and sponsors are going to get that VIP treatment, when there is no necessity for the security to which I refer.

[Mr Whittingdale]

My hon. Friend brings up the other issue that is causing some anxiety, security, which I am sure we will discuss as well. To a certain extent, the IOC rules, which have proven to be quite challenging in several different aspects throughout our preparation for the games, dictate some of the issues, but again I am sure that my hon. Friend the Minister will want to discuss that.

[Mr Whittingdale]

The third issue, besides transport and security, that I was going to and, indeed, still intend to come on to, is ticketing, which I understand has caused some irritation as well. In that particular regard, however, LOCOG was in an appallingly difficult situation, which I shall come to in greater detail in due course. It was going to be criticised almost whichever way it played the situation.

[Mark Field]

Without wishing to pre-empt a fourth issue, which may come up as well, I just want to say briefly on security that we all recognise that events within 24 hours of our winning the bid in July 2005 meant that the security situation was going to be very different. Although I have, and have long had, concerns about the burgeoning funds for the Olympic games, I recognise equally that we are in a different security position, which therefore inevitably has a cost implication well beyond that which we anticipated back in July 2005.

[Mr Whittingdale]

One of the extraordinary things about how much has been achieved in preparation is that the world is different in quite a number of ways from that of 2005. My hon. Friend is entirely right that the security picture has changed enormously and, I am afraid, for the worse, so it has required much more attention, but the other big change is the economic climate, and many funding issues have been influenced by the fact that the Olympic facilities have had to be built in the teeth of a severe global recession. That has also proved very difficult. One thing that we discovered in talking to previous organisers of Olympic games was that several could not have done so had their work coincided with a recession as deep as the one that we have experienced.

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[Mr Whittingdale]

I do not know whether Beijing has ever published a final figure of the amount that it spent, but I think it is safe to say that it was rather greater than the amount that we will spend. That makes the hon. Gentleman’s point even stronger. I agree with him that some of the facilities that we saw when we went to the park are just as good as, if not better than, anything in Beijing. I heard the figure of £20 billion rumoured as the cost of the Beijing games, but I do not know whether that is entirely accurate.

[Mark Field]

While we are still talking about funding, I should like to endorse what the hon. Member for West Ham (Lyn Brown) said. It would be a missed opportunity if, in an effort to reimburse the national lottery fund, we were to lose moneys that would otherwise go to regeneration. That is their raison d’être in that part of London for the next 10 years.

May I say to the hon. Member for Redcar (Ian Swales) that the independence of the lottery has long since been lost? The Big Lottery Fund, which was introduced under the previous Government, means that lottery funding goes, to a large extent, outside those main causes. It is also true that we put a significant amount of money into the millennium fund in advance of 2000. In many ways, that head was transferred into Olympic funding.

[Mr Whittingdale]

Indeed, although I would hope that one achievement of my hon. Friend the Minister will be restoring the lottery to its original purpose and putting the proceeds to the original good causes rather than to some of the causes that my hon. Friend rightly identifies.

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[Mr Whittingdale]

I am sure that the Minister has heard the hon. Lady’s point and will attempt to shed some light on it, if possible.

[Mark Field]

Will my hon. Friend give way?

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[Mr Whittingdale]

This really will be the last time.

[Mark Field]

My hon. Friend is very generous. Obviously there are concerns about what will happen with transport in July, August and September. However, it is also worth putting on record that it is greatly to the credit of the right hon. Member for Dulwich and West Norwood (Tessa Jowell) and my hon. Friend the Minister that we have placed a lot of focus on getting the broader transport links in the area right. I hope that will augur extremely well for the legacy that we all wish for. There will be new docklands light railway stations and better transport in the area. I accept that there will be massive congestion during the Olympics, but those developments will stand us in good stead for the future.

[Mr Whittingdale]

I think what my hon. Friend says applies more generally. We hope not only that the London Olympic games and Paralympics will be a fantastic event that will be celebrated and enjoyed across this country and around the world, but that we will secure a lasting legacy that will certainly benefit east London and, I hope, people right across the country.

The Select Committee has inevitably concentrated on the areas of concern. We have identified where we think there could be problems and I hope we have done so in a way that has allowed them to be tackled. However, I congratulate the right hon. Member for Dulwich and West Norwood and her party, the right hon. Member for Bath—whom I could not leave out—and my colleagues on the Front Bench on the work that they have all done. In particular, I also congratulate both the Olympic Delivery Authority, which has done a fantastic job in building such world-class facilities on time and, we hope, within budget, and LOCOG, whose main job is still ahead, but which has nevertheless done a huge amount of impressive work. I look forward to the rest of the debate, but I look forward even more to a fantastic games in July and August.

Football Governance

Debate between John Whittingdale and Mark Field

Thursday 9th February 2012 Westminster Hall

[Mr Whittingdale]

The hon. Gentleman—he is really a friend on the Committee—encapsulates the report in a couple of sentences very well. I am almost tempted to say that he has done my job for me and finished my speech. Yes, there is no question but that we felt that at the heart of the reforms that were necessary was the game’s governance structure: ultimately, the FA. I will go on to talk about that in more detail. I did not intend to talk at great length about the management of the England football team, although that is obviously a matter of great interest and debate today. I heard the Minister’s remarks during Culture, Media and Sport questions a few hours ago, and I entirely agreed with him. I am sure that the matter will crop up again during the debate.

Before I move to the report’s main recommendations, I want to pay tribute to three people. The first two were our expert advisers: Christine Oughton and Rick Parry, who provided enormously helpful experience and wise advice to the Committee. We relied a lot on their input throughout our inquiry.

The third person to whom I should pay tribute, particularly in a debate on football governance, is our late colleague on the Committee, Alan Keen. [Hon. Members: “Hear, hear.”] Alan was the senior member of the Committee. He was a member of it before I became Chairman. Football was his passion. He chaired the all-party group on football. He was very—I am tempted to say keen—eager that we should embark on this inquiry. It was a great sadness to us that, because of his illness, he was not able to play as great a part in the inquiry as he would have liked. He is certainly greatly missed. It is only right in a debate on football that we pay tribute to him.

Some people asked why the Committee was looking at football at all, because it is a huge success in many respects. The Premier League is probably the most successful in the world. It has an average attendance of 350,000 people each weekend and about 92% occupancy. The second league—the Football League—gets average attendances of 375,000. Some £2 billion of revenue comes into the Premier League. There is no question but that the top English clubs are watched not just throughout this country, but in almost every country in the world. It is hard to go into a bar in any country and not see a screen in the corner showing the premier league. To that extent, it is hugely successful. There were those who said, “In that case, why are you bothering to spend this time looking at it? Why don’t you go off and look at other things?” But we found that there was widespread concern about the underlying state of the game. That was felt right across football and among followers of football.

Despite the huge revenues that come in, very few clubs trade profitably. The main reason for that is the extraordinary amount of money paid out on players’ salaries. The consequence is that debt has become an enormous problem throughout the game. Debt kept coming up as one of the principal issues causing concern. More than half of Football League clubs have gone into administration at some stage since 1992, and all operate on very narrow margins. The net debt of the Premier League clubs is £2.6 billion. Some people would say that that in itself may not be a problem. Indeed, there will be clubs that operate with quite significant debt, but as long as they can service that debt and trade, it is not necessarily something that need be addressed immediately. However, there is no question but that the debt is a major issue. We were told by the chairman of the Football League, for instance, that it was the issue that kept him awake at night.

There is also concern about ownership, which is not wholly dissociated from the question of debt. That, too, was something that we considered. As the hon. Member for Newcastle-under-Lyme (Paul Farrelly) suggested, we decided that if we were to address the problem, the most important thing that needed to be tackled was governance. Therefore, we wanted to establish, right from the start—this may seem self-evident, but it was not necessarily self-evident—that the FA is the ruling body of football. The FA therefore needs to be reformed if we are to get this right.

Some years ago, Lord Burns produced an extremely good report, which made a number of recommendations for reform. When we heard from him, some of his recommendations had been accepted. They included the incorporation of the FA chairman and chief executive on to the FA board, but they were still waiting to bring on the two independent non-executive directors. Progress, I believe, has been made since then.

Terry Burns told us that, if anything, he felt that he had been too timid and that he would have liked to have gone further in involving non-executive directors. Indeed, we heard from one former chief executive of the FA that he wanted an entirely independent, non-executive FA board. We felt that that was not wholly realistic. We were also clear that, as in most corporate structures, the board needed to be relatively streamlined to be effective.

After some debate, we decided to recommend that the right size for the FA board was 10, and that it should include the chairman and chief executive of the FA, the two non-executives and two more of the FA executive directors—in particular, the director of football development. Alongside them, we decided that there should be two representatives of the professional game—presumably one from the Premier League and one from the Football League—and two representatives of the national game. Although we understood the reasons why others, such as supporters, players and managers, wanted representations, we felt that that could make the board unwieldy. Therefore, we felt that we had come up with the right composition.

At the same time, we also felt that there needed to be reform of the FA council, which is an extraordinary and enormous body. It dates back many years to include representatives from Oxford and Cambridge, the three separate services and the public schools, but very few representatives of players and people who actually watch football. We therefore felt that that was something that needed to be addressed. We were also slightly concerned that the meetings started at 11 o’clock and finished at lunchtime and that some of the members of the FA council seemed to have been there for 50 years or more. We felt that there was a need to address the composition of the council, the tenure of its membership and the form of its meetings. We felt very strongly that the council should be a parliament and not an executive decision-making body.

Once those governance reforms are in place, we will be able to move forward to tackle some of the underlying difficulties affecting the game. I have talked about debt, so the next is financial management. We welcomed the introduction of UEFA’s new financial fair play rules, which will affect those clubs that have ambitions to play in European matches. We felt that the principles underlying the financial fair play rules were absolutely right; they commanded a lot of support and should be applied throughout football.

One aspect of the financial management of clubs that caused considerable concern to the Committee was the football creditors’ rule. I have absolutely no doubt that my hon. Friend the Member for Folkestone and Hythe (Damian Collins) may talk about that a little more, because he particularly pursued that issue during our discussions. Although we could see the reasons why that rule was in place, we felt that it was unfair on creditors, as they were often small firms in local communities that had supported the local team. If that team gets into difficulty and goes into administration, they have to go to the back of the queue after all the football creditors before having their debts paid. We felt that that was unfair, and I am sure that my hon. Friend will say more about that.

One aspect that I have taken a long-standing interest in and that still creates significant potential difficulties is the ruling of the European Court on broadcasting rights and territorial sales, the full implications of which we are still waiting to see. It could have a very damaging effect and it is of concern not just to certain broadcasters, but to a large number of people involved in football.

As for how we enforce the financial fair play rules and the other necessary changes, we were impressed by what we saw in Germany. Germany has a licensing model and we saw how it was used to ensure that the clubs do not trade beyond their means for long periods. We saw how they were required to follow certain rules specified by the Bundesliga. We decided that if we were to achieve our changes, we needed a national licensing scheme. The best body to administer that is clearly the FA. Therefore, the other main thrust of our recommendations was that we should move to a licensing scheme under the FA, which should address issues such as the financial management of the game, the sale of stadiums, investment in youth development and all the other areas where, understandably, concerns have been raised. It could also address ownership.

Foreign ownership in the game is not necessarily a bad thing. After we saw what Sheikh Mansour had done in Manchester City, we could understand why the fans had great banners up saying, “Long live Sheikh Mansour”. However, there are others who are less committed to the development of clubs. We also felt that the fit and proper person test, which is necessary, had not always been as effective as it might have been. Indeed, we debated long and hard about what someone had to do to fail the fit and proper person test in English football.

[Mark Field (Cities of London and Westminster) (Con)]

My hon. Friend is talking sense on the fit and proper person test, which seems to be honoured more in its breach. Going back to overseas ownership, does he feel that there should be a different regime for football clubs compared with the rest of the UK economy? If so, how does he see that operating?

[Mr Whittingdale]

The truth is there will be different regimes governing the ownership of football clubs. For this particular aspect, a slightly different regime should apply. I am not against the principle of foreign ownership. Just as I do not have a kneejerk response to foreign ownership in football, the same is true of the wider economy. To some extent, there are special factors, but I am not opposed to overseas ownership per se.

Let me pay one word of tribute. When the Committee visited Burnley FC, we were well entertained by the chairman of the club, Barry Kilby. In many ways, he represents all that is best about local ownership. He was a business man who had been successful in his community and had put back a huge amount into Burnley FC. His passion for the club was undoubted. Therefore, a strong local owner can bring great benefits.