Football Governance Bill (Fifth sitting)

Rachel Hopkins Excerpts

Committee stage
Tuesday 21st May 2024 Public Bill Committees

[Stephanie Peacock]

Clause 20 and schedule 5 provide us with the building blocks of a licensing regime. The Minister set out the mandatory licence conditions that all clubs must comply with in order to obtain a provisional or full licence. That will ensure that base-level requirements are fulfilled on key areas such as finances, corporate governance and fan engagement. I will speak briefly to each area in turn, and then address the amendments.

The first condition relates to financial plans. I will not spend too much time on it as we have already discussed financial resources. However, I believe that the requirement to submit a financial plan would be fundamental for clubs wanting to exercise best practice.

The second requirement is on corporate governance. As we just discussed, good corporate governance can help to deliver better business outcomes, improve the efficiency of decision making and demonstrate to stakeholders that a club is well managed, to the benefit of both fans and investors. Furthermore, as the Government’s White Paper says, poor governance can exacerbate financial issues, allowing reckless decisions to be made without challenge or scrutiny. Many clubs already engage in good corporate governance, and for those that are not, the introduction of requirements should genuinely help to move them towards best practice.

However, I have some questions about the content of the corporate governance code of practice, which will be published by the regulator and reported against by clubs. In particular, Fair Game and Kick It Out have questioned whether issues such as equality, diversity and inclusion will be included in the code. Indeed, the Government chose not to pick up the recommendation of the fan-led review to mandate EDI action plans through the licence regime, pointing instead towards enhanced industry assessments in that area.

I understand the need to ensure that existing structures that are working well are not disrupted, and to give the regulator a well-defined scope. Given the explicit focus that the regulator will have on good governance, however, it seems slightly odd to divorce the concept from the issue of EDI. The fan-led review said:

“Aside from a clear moral case, improving diversity is also a key aspect of driving better business decisions by football clubs. Diverse companies perform better”.

A football that welcomes everyone, then, is a football in which clubs have the best possible chance of success. But change is needed at almost every level for that to happen.

Kick It Out’s reporting statistics from last season show that it received a record 1,007 reports of discriminatory behaviour across the professional game, including a 400% increase in reports of sexism and misogyny. Meanwhile, in 2019, the law firm Farrer & Co found that across all professional football clubs only 7% of board directors were female. Just one club met the 30% target set for other industries, and only 7% have a woman in a leadership position on the board. Work must be done to address the problem across the board. I am keen to hear from the Minister about how whether issues such as EDI will form part of the governance code will ultimately be decided, and whether he has a view on whether they should.

I have spoken about fan consultation in detail during our discussions on schedule 4, so I will save repeating how important it is. However, I would like to raise some further concerns. Namely, I am disappointed that the Bill makes no provisions regarding supporters’ trusts, as noted by my amendment 19 and amendment 7 tabled by my hon. Friend the Member for Liverpool, West Derby.

At the time of the fan-led review, 73 clubs had a community benefit society in the form of a supporters’ trust. Community benefit societies are incorporated co-operatives that conduct business for the benefit of their community. They must follow certain rules, including operating on a democratic basis and ensuring that any profits gained by a trust can only be reinvested into the club or returned to the community. Those minimum standards mean that CBSs in the form of supporters’ trusts operate with a broad level of consistency and reliability. Many of them have a long legacy of connecting with the local area, liaising with their club and organising on behalf of fans. Many trusts should therefore be viewed as an asset to the community that clubs can learn from and engage with positively. We saw that at first hand in our evidence sessions, with the insight that Action for Albion, Supporters’ Trust At Reading and Arsenal Supporters’ Trust brought us in respect of their clubs and the view of their communities.

I understand why the Bill has sought to ensure that fan engagement measures are not a one-size-fits-all. However, where trusts are established, I believe that clubs should consider them when forming their consultation processes. Amendment 19 would ensure that where a club’s fans have established a legally registered supporters’ trust, that body is considered for representation in the club’s fan consultation process. Clubs would not be bound by any hard-and-fast rules, but would be encouraged to consider the benefits of engaging relevant existing trusts.

That brings me to the broader issue of how fans will be selected for consultation. Amendment 7 suggests that fans are given a democratic mandate if they are to be consulted by the club regularly. That way they would have the backing of fellow fans, helping to avoid scenarios in which the fans are seen as a mouthpiece for the club directed at fans, rather than the other way round. I am keen to hear how the Minister thinks we can ensure that fans are both selected and treated fairly. Will there be standards or guidance on that specific issue?

Finally, I am pleased to touch on the annual declaration condition. Given that there is no requirement for licences to be renewed, it is right that there is a touchpoint for clubs with the regulator to ensure that everything is in order, but I have one brief question. The schedule outlines that the annual declaration must contain a summary of any “material change” at the club over the year. That phrase is used 11 times throughout the Bill, but its definition is not clearly set out. Will the Minister provide a working definition today, or write to me with one?

Overall, I am broadly happy with the contents of the clause and schedule, albeit with a few questions that I would like answering on governance code and on supporter involvement.

[Rachel Hopkins (Luton South) (Lab)]

It is a pleasure to speak in this debate on an important Bill. I would like clarification on a few points with regard to schedule 5, particularly—following the excellent remarks made by the shadow Minister, with which I wholeheartedly agree—paragraph 7(4), which states:

“Before publishing a code of practice or any alterations to the code, the IFR must consult…the Football Association, and…other such persons as appear to the IFR to be representative of persons likely to be affected by the code.”

Can I seek assurances from the Minister that fans and fans’ representative groups will be included as people who are likely to be affected by the code? They will take a deep interest in the corporate governance of their clubs, which is why we are here with this piece of legislation. Similarly, I would like to press for clarifications on reporting on equality and diversity and inclusion matters, which are a really important aspect of good corporate governance. Once again, I add my support to the remarks made by the shadow Minister.

[Ian Byrne]

I wish to support the excellent remarks by the shadow Minister, who gave a very comprehensive overview of why we need amendments to the Bill. There is a real worry, as I have outlined, that the clubs will seek to dilute the power of the supporter’s voice by filling the boards full of stooges, shall we say. We need some sort of system to ensure that boards are appointed through a democratic and independent process. Supporters trusts are a ready-made option. There are over 130 of them in the football world. They are democratic, independent organisations that have the trust of the wider supporter base, mainly. It would be foolish not to utilise that expertise and the system that is already in place.

If a club has not got a supporters trust we need to have some sort of oversight to ensure there are independent fan voices holding clubs to account, which will be a crucial part of the independent football regulator. We have got to ensure that those boards are fit for purpose and, as I said, not diluted by clubs that want to disempower supporters and supporter voices.