Coventry City Football Club

Lord Watts Excerpts

Tuesday 22nd October 2013 Westminster Hall

[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.