Football Governance Bill (Fourth sitting)

Debate between Stephanie Peacock and Stuart Andrew

Committee stage
Thursday 16th May 2024 Public Bill Committees

[The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stuart Andrew)]

It is a pleasure to serve under your chairmanship this afternoon, Sir Christopher. I thank members of the Committee for their time and commitment, and I thank all the officials who have done an enormous amount of work in preparing the Bill. It would be remiss of me not to thank my hon. Friend the Member for Chatham and Aylesford for all her work on preparing it.

Clause 1 sets out the purpose of the Bill and summarises what each part of it provides for. Its purpose is crucial: it underpins the regulator’s entire regime, as the regulator will be obliged to act in accordance with it at all times, so far as is reasonably practicable. Since the fan-led review was published, the Government have been clear that the pre-eminent failure in this market is the growing risk of football clubs being unable to continue providing their service. The potential harm that that can cause to fans and the local communities reliant on the clubs is unacceptable, and the industry has not been and is not doing enough to tackle the risk. That is why we are intervening here, and that is the Bill’s purpose.

The clause explains that the purpose of the Bill is

“to protect and promote the sustainability of English football.”

It goes on to define that, for the purposes of the Bill, sustainability refers to a continuation of service in the interests of fans and for the wellbeing of local communities. In essence, clubs should not be lost to their fans and communities now or in the future, be that through financial collapse, relocation 60 miles away or turning their back on their fans to join a new breakaway competition. I commend the clause to the Committee.

[Stephanie Peacock (Barnsley East) (Lab)]

It is great to be here today to welcome the Bill as it enters its next stage of scrutiny. As I outlined on Second Reading, Labour has supported reforming football through an independent regulator for football for a long time. We echo the Minister’s thanks to all the officials for all their hard work, to all Members on both sides of the Committee, and in particular to the hon. Member for Chatham and Aylesford for all her work on the fan-led review.

We want to scrutinise this Bill appropriately, and I look forward to doing just that in the coming days. However, given how long it has taken for this legislation to be introduced and the number of fans who have had to watch their club pushed to the brink in the meantime, we want to see the regulator implemented as swiftly as possible. I am therefore pleased to see a degree of consensus around the implementation of an independent regulator across the House. With that in mind, I have been focused on tabling amendments and will shape my remarks to be constructive where possible, while of course giving the Bill the scrutiny it deserves. I hope to be able to work with fellow members of the Committee to make sure that the Bill truly achieves its aim of ensuring the future of English football for generations to come.

Getting clause 1 right is crucial to the rest of the Bill. The purpose of the Bill, and therefore the regulator, will underpin all the other measures that we go on to discuss. It will act as a reference point to return to when interpreting the overall sense of intention and direction of the whole regulatory system.

It was the fan-led review that first noted that the regulator would need a clear statutory objective, which it said would be useful for dictating to the board and employees of the regulator what the body is there to achieve, how it should assess any problems and the outcomes it should deliver. If well designed, it should seek to tackle many of the problems identified within English football: the poor management of clubs, substandard corporate governance, the lack of fan involvement and the unsustainable finances that have threatened the long-term health of football. As a result, the fan-led review suggested that the objective should include acting in the interests of both local fans and communities. It said:

“There is no one else more important”,

a sentiment with which I absolutely agree. It must be central to both the Bill and the future regulator that football works in the long-term interests of fans and communities. I am therefore pleased that the clause defines English football as sustainable if it

“continues to service the interests of fans of regulated clubs”

and

“continues to contribute to the economic or social well-being of the local communities”

with which the clubs are associated.

Given the centrality of those concepts, it is curious that the likes of fans’ communities and social wellbeing are not defined in the Bill. The explanatory notes indicate what those terms might mean in practice: “fans” might mean season ticket holders and regular match-goers, and “local communities” might mean the people

“who live, work or trade in the geographic area associated with a football club”.

However, those indications will not become law when the Bill is passed, which leaves ambiguity as to how they might be interpreted. I ask the Minister why fans, communities and social wellbeing are not given clear definitions and whether he believes that there is potential for such terms to be misunderstood or misused as a result.

Further to that point, some clarity is needed that when we talk about the “interests of fans”, we mean their long-term interests. I can imagine quite a few scenarios in which it might be in the fans’ interest for their club to adopt reckless short-term strategies to achieve immediate on-field success. Yet those short-term strategies might lead to the club’s long-term financial demise, which is contrary to the aim of the Bill and against the long-term interests of fans and communities. Can the Minister therefore confirm that the phrase “interests of fans” must be taken to indicate a long-term continuation of the club and its heritage, rather than anything to do with on-pitch results at any given time? I agree with the principle of centring fans and local communities in the Bill and the regulator, but we must make sure that we are clear on what that means right from the very beginning, to ensure that the intended outcomes are achieved.

[Stuart Andrew]

I thank the hon. Lady for her opening comments. She will know from our engagement that we centre fans in the whole of the Bill’s process. She is right that as we go through line-by-line scrutiny, I will be able to give more indications that fans need to be consulted when it comes to important decision making by clubs up and down the country. Some clubs are doing that brilliantly, but we need to raise the bar. I hope that the provisions in the Bill will ensure that that happens and that fans will rightly be at the centre of the clubs they support.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.

Clause 2

Key definitions

Question proposed, That the clause stand part of the Bill.

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[Stephanie Peacock]

I will begin by addressing clause 2 and my new clause 1 before looking briefly at clauses 4 and 3 with schedule 1. Clause 2 provides important definitions that will help make sense of the Bill. Most of the definitions are relatively straightforward, so I will focus on the Secretary of State’s ability to designate which specified competitions will fall under the remit of the regulator.

It is widely understood that the Government’s intention is to identify step 5 and above of the men’s football pyramid as being within scope. That choice is the right one as long as the regulator’s enforcement is proportionate to ensure that clubs in the National League and lower tiers of the EFL are not burdened by compliance. Indeed, at this early stage it is important to set out that regulation does not necessarily need to result in burdensome compliance requirements. As long as the Bill is done right, that will not be the case.

It is important that we leave room for the competitions in scope to be amended in future should circumstances change. I appreciate the Minister’s comments on my new clause 1, but I am sure the Committee will allow me to outline the arguments on why I tabled it.

We should pay close attention to ensuring the healthy growth of the women’s game and whether it should be brought into the regulator’s remit. Despite its recent soaring success, as shown by the historic achievements of the Lionesses and sustained by the growth in support for the Women’s Super League and Championship, the women’s game faces a wide range of issues. The Carney review, commissioned as a result of the need for parity identified by the fan-led review, brought many of those issues to light.

The review raised concerns, for example, about the growing gap between those at the top of the elite game and the rest of the women’s football pyramid. Indeed, the annual turnover in the Women’s Super League, featuring teams such as Chelsea and Manchester City, peaked at around £7 million. Meanwhile, in the Women’s Championship, where teams such as London City and Sunderland play, sides are recording turnover as low as £150,000.

Further to that, the review noticed that there has not been enough progress on ensuring minimum professional standards. Players have been reported as being treated as second-class citizens rather than elite athletes, with everything revolving around the schedules of the men’s teams. Also, women players are three times more likely to suffer an anterior cruciate ligament injury—a serious rupture that strikes top players out for around a year—than their male counterparts, and there is no guaranteed access to even a basic level of mental health support even for those who might be seriously struggling.

Finally and perhaps most relevant to the Bill, the review also identified that the costs of sustaining participation in the women’s game are much higher than the revenues being organically generated by women’s teams. That is true even with the growth of broadcasting audiences and sponsorship revenue. Rather than bringing women into scope of the independent regulator at this stage, however, Karen Carney’s review concluded that women’s football would benefit from the opportunity to incentivise investment and self-regulate first.

Given that the IFR has been designed with the failures of the men’s game in mind, I agree that the women’s game and NewCo should be given the chance to take learnings and to proactively address issues so that it can run on its own two feet. However, I also believe that the option of an independent regulator must remain on the table, not least so that if it is needed, the regulator can act at an earlier point than it has been able to in the men’s game. That is why I tabled new clause 1.

Players, fans and the whole country want to see healthy growth of the women’s game and NewCo, and they now have the opportunity to see just that with the right investment, support and approach. However, if issues prevail, as they have done in the men’s game, it is right that we be proactive rather than reactive this time.

The Government agreed to all the Carney review’s strategic recommendations, but I believe there has been only one meeting of the implementation group. Parity of importance must be given to change in the men’s and women’s game, and I hope the Minister can provide an update on the Department’s progress either in this debate or in writing.

Clauses 3 and 4 and schedule 1 set out some of the other key definitions in the Bill, particularly of owners and officers, and I welcome their clarity. Due to the complex ownership structures of some clubs, it has not always been clear who or what might count as an owner, ultimate owner or indeed who can be held accountable as officers.

The fan-led review identified the example of Birmingham City, who at the time were alleged to be in £100 million of debt. They were in breach of profit and sustainability rules and in a situation where the club and ground were owned by two different people under a complicated offshore ownership structure. Trying to untangle and resolve such difficulties without being able to understand where accountability lies in an opaque structure is no easy task. The detail in clauses 3 and 4 and schedule 1 on how calculations will be made in relation to shares and the like is therefore welcome. In combination with the duty in clause 16 on clubs to provide a personnel statement, the Bill will improve transparency and ensure that the regulator is able to operate from a much clearer standpoint.

I have one question on behalf of the Football Supporters’ Association, which is concerned that the definition of “senior manager” might include football-related posts that were not intended to be within scope of the Bill, such as team managers. Can the Minister confirm that that is not the case and that football-specific posts will not be covered?

[Stuart Andrew]

I completely agree with the hon. Lady on ensuring that clubs, specifically those further down the pyramid, are not over-burdened. That is why we have been careful throughout the drafting of the Bill to ensure that it is proportionate and that our approach is dependent on the size of the club and where they are in the pyramid. I do not think there should be anything for many of those clubs to fear. We heard from witnesses in the evidence sessions that many of those clubs rely on volunteers to do a lot of the paperwork, and we have taken that into account.

I absolutely welcome the hon. Lady’s comments about the women’s game. We all want to see healthy growth in the women’s game, and it has been incredible to see how popular it has become. That is precisely why we brought about Karen Carney’s review, and I put on the record my thanks to her for the work that she has done in this area. What has been useful about that—rather than just doing it through the IFR—is that it has enabled there to be a much broader approach to the women’s game; and she rightly highlighted health and wellbeing as a really important aspect. Although the implementation group has only met once, it was an important meeting for us to set out the questions that need answering, and work is going on behind the scenes in preparation for the next meeting to ensure that we see progress. As she acknowledged, we support all the recommendations of Karen Carney’s review. We want to now ensure that progress is made in implementing them.

The hon. Lady is right that we need to learn from the men’s game at a much earlier stage, which is why we are looking at all aspects, but should we get to the point where it needs to be looked at by the independent football regulator, provisions are in the Bill for that purpose. On the issue of owners, as we have described in the Bill, it is those with a controlling decision-making process within the club that will come into scope.

Question put and agreed to.

Clause 2 accordingly ordered to stand part of the Bill.

Clause 3 ordered to stand part of the Bill.

Schedule 1 agreed to.

Clause 4 ordered to stand part of the Bill.

Clause 5

Establishment of the IFR

Question proposed, That the clause stand part of the Bill.

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[Stuart Andrew]

The provisions in schedule 2 ensure that the regulator has the necessary structures in place to function effectively and efficiently with appropriate accountability as a public body. It ensures that an agreed and transparent process is adhered to when establishing a governance framework, including its board, committees and expert panel. It provides the necessary flexibility to future-proof the regulator and the agility to act quickly where required.

We have made provision for the regulator to appoint an observer from the Football Association. As the national governing body for English football, it will be able to provide insights on behalf of the football industry to support the board if needed in the execution of its functions. Ultimately, the regulator will be accountable to Parliament, but it will be operationally independent and free from undue political or industry influence. The provisions in the schedule are central to creating this framework and strike the right balance between those competing demands.

[Stephanie Peacock]

I am extremely pleased to welcome these provisions, which establish the long-awaited Independent Football Regulator as a body corporate. This is a good opportunity to discuss why it is important that the independent regulator has been established in the form it has—a body that is operationally independent of current football governance structures. This independence will be key in ensuring that decision making is impartial, free from conflict and credible. As the fan-led review clearly reveals, public confidence in existing football authorities is unfortunately very low. Part of the reason for this, according to the review, is that the constitutional set-ups of existing authorities are inherently conflicted and

“the rules of regulation being set by the parties that are to be regulated.”

There are two big problems with that. First, it results in clubs being naturally incentivised to prioritise their own interests rather than the long-term view of what is best for the game. Secondly, it means that there is a natural disincentive for disciplinary action to be taken where it might be commercially damaging for the club involved. Though this new phenomenon was identified by the fan-led review, it is not a new concept. It has been over a decade since the 2011 Culture, Media and Sport Committee’s report that made recommendations to improve the accountability of the regulation of football, and it is almost 20 years since the Burns review, which found football governance unfit for purpose.

Opportunities have been presented over and over, but the same problems have prevailed. This is why it is important that we are finally here today. Independence does not mean that the regulator will have no relationship with existing structures. As we will discuss, working constructively with football governance will be vital to the regulator’s success. This does, however, bring up questions of regulatory clarity.

As it stands, I am not entirely convinced that everyone is clear about whose rules will take primacy and when. The Government’s response to the White Paper consultation seemed to be firm on this, identifying that although there needs to be collaboration, the regulator will be the ultimate authority on matters within its remit. However, the Bill is not always clear, so I hope this is something we can come back to and clarify as we progress.

It is also important to note that the regulator will be independent from politicisation and undue influence from the Government, which is important not only for the sport as a whole, but to ensure that the regulator in no way impacts compliance with UEFA and FIFA rules. Overall, however, I am pleased with the institutional location of the regulator and the fact it is finally being established through the clause.

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[Stuart Andrew]

I agree with the hon. Member for Luton South about the independence of the football regulator; we were really careful to ensure that as we drafted the Bill. She is right that we have to take into account the UEFA and FIFA rules. That is why we have made sure throughout that the regulator will be independent, including from political interference. We would not in any way want to see any sanctions on English football because of any pressure that might be given. As with others, we have engaged with both of those bodies. So far, we feel that they recognise that we have gone to great lengths to ensure that that independence is recognised.

On the board being reflective of society, I am a big advocate of making sure that that happens. There are the usual processes of Government appointments; as hon. Members will know, that issue is very much a consideration. Work is constantly being done to encourage a wide range of candidates to apply. I suppose this gives me an opportunity to shout out to the wider society: get involved! We need a very diverse range of candidates to apply for these positions.

We absolutely need to ensure that the measures on conflicts of interest are in there, just as we would with any other public body, and, yes, there will be a requirement for pre-confirmation of the chair through the Select Committee.

Question put and agreed to.

Clause 5 accordingly ordered to stand part of the Bill.

Schedule 2

The Independent Football Regulator

[Stephanie Peacock]

I beg to move amendment 14, in schedule 2, page 82, line 20, leave out “is satisfied” and insert “has ensured”

This amendment would strengthen the responsibility of the appointer.

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[Stephanie Peacock]

I welcome that input, and that is absolutely right. I am trying with these probing amendments to seek some clarity from the Government, so that all hon. Members and everyone who has an interest in the Bill are satisfied. I tabled them to make important clarifications and to ensure that appointments to the regulator are free from vested interests. I believe that that is the intention behind the Bill.

It is peculiar that the process of declaring a conflict of interest does not involve potential appointees making any declarations themselves. Given that potential appointees are the experts on their own history, they must take a level of responsibility for ensuring that time is not wasted as part of their appointment. Amendment 15 would ensure that candidates are obliged to make a declaration if they hold any relevant interests that might give rise to a conflict. That would create a pathway for unsuitable candidates to be easily and quickly dismissed, and ensure that the appointer is not the only person responsible for identifying conflicts. That shared accountability would strengthen the process.

The involvement of the appointer in any investigation of any potential conflicts will also be crucial. I tabled amendment 14 to require appointers to categorically and objectively ensure that the candidate is free from vested interests. It is not enough for an appointer to simply say they are satisfied that there is no conflict; the Bill must require a level of intentional due diligence on behalf of the appointer, so that if any conflicts are identified later down the line, there is a level of objective accountability. Replacing “is satisfied” with “has ensured” will strengthen not only the wording but the entire system of appointments.

I hope that the Minister can accept the changes as a necessary part of achieving the Bill’s aims, or at the very least can provide clarification on why the Bill as drafted allows for subjectivity in decision making when it comes to conflicts. It is only by getting the appointment system right that we will get the regulatory system right. We hope that the process will be watertight.

[Stuart Andrew]

The Government recognise the intent behind the amendments, which is to make certain that the board is free from conflicts of interest—not least given the fact that so many of the witnesses talked about trust, as the hon. Member for Liverpool, West Derby just mentioned. It is essential that the regulator can deliver its regime free from influence from Government or the industry that it will regulate, which is why independence has driven the design of the regulator from the start. That is reflected throughout the Bill and will continue to shape how the regulator is established, including the appointment of its board.

I strongly support the objective that conflicts of interests should be managed appropriately, but the amendments are unnecessary. The current drafting, supported by public law principles, as my hon. Friend the Member for Chatham and Aylesford hon. Friend mentioned, and non-legislative measures already in place achieve that objective. The appointer must already satisfy themselves that a candidate board member is free from conflicts before appointing them, and the board members will have responsibilities to openly and honestly declare any interests that could give rise to actual or perceived conflicts.

In addition to the checks for conflicts at the point of making the appointment, there is an explicit requirement in schedule 2(22) for members of the board to declare their interest in any matters that fall for consideration by the board. That paragraph sets out a process for managing any interests in line with the approach taken for other regulators, and provides assurance regarding the suitable management of board members’ interests. Members of the regulator’s board and their terms of appointment will be subject to the Cabinet Office’s “Code of Conduct for Board Members of Public Bodies”, which sets out clear requirements on the appropriate disclosure and management of conflicts of interests. For the reasons that I have set out, I am not able to accept the amendment tabled by the hon. Member for Barnsley East, and I hope that she will withdraw it.

[Stephanie Peacock]

I am grateful to the Minister, and on the basis of what he has said, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 2 agreed to.

Clause 6

The IFR’s objectives

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[Stuart Andrew]

The hon. Gentleman tempts me to get drawn into an area of further expansion. I understand his point. I have never in my entire life been stopped by so many people to talk to me about football as on the weekend that announcement was made. I of course recognise the importance of the FA cup, but for the regulator to get into areas of match timings, replays and so on may be a bit too far. We will probably look more into that later.

The third objective looks to safeguard the elements I mentioned in the interests of the community and future fans, but not to stand in the way of the natural growth and renewal of a club. I commend the clause to the Committee.

[Stephanie Peacock]

Given the purpose of the Bill, as set out in clause 1, it is important that the regulator’s objectives are shaped carefully and clearly, as they will underpin many of the other measures. Although the fan-led review initially recommended a dual focus on sustainability and competitiveness, when it came to the regulator’s objectives the White Paper streamlined things so that the primary duties were regarding sustainability, with competitiveness becoming a secondary focus. I understand the Government’s reasons for that and have welcomed the subsequent primary duties being in three areas: the financial sustainability of individual clubs, the systematic stability of the football pyramid, and protecting cultural heritage.

I am pleased that the proposal from the White Paper is largely reflected in the Bill. However, I am curious about a few small changes, to which my hon. Friend the Member for Sheffield South East alluded in his intervention. For example, the exact wording in the Bill has “financial soundness” rather than “sustainability”, as was in the White Paper. Will the Minister explain why? It seems strange that the word “sustainability” is not included at all in the objectives. Further to that, the White Paper framed the systemic financial resilience objective in terms of the football pyramid, but the Bill goes only so far as to say “English football”. Will the Minister tell us whether the word “pyramid” has been purposedly omitted? Or does he believe that the definition of “English football” adequately covers things? I have no further issues with the intent of the objectives, but the wording is important if the Bill is to achieve its stated aims.

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[Stuart Andrew]

My hon. Friend has got it exactly right and articulated it extremely well. We recognise that that is the challenge football has with the obligations it must match with the likes of UEFA and so on. I thank my hon. Friend for his intervention, and with that I commend the clause to the Committee.

Question put and agreed to.

Clause 6 accordingly ordered to stand part of the Bill.

Clause 7 ordered to stand part of the Bill.

Clause 8

The IFR’s regulatory principles

[Stephanie Peacock]

I beg to move amendment 2, in clause 8, page 5, line 33, at end insert—

“(iv) supporters and supporters’ organisations”.

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[Stuart Andrew]

The regulatory principles outlined in this clause are designed to guide the regulator to exercise its functions appropriately and in the manner intended by Parliament. They are hugely unobjectionable but fundamental principles that should help to establish the regulator’s mode of operating and culture. The regulator must have regard to these principles when acting. The first principle encourages time and cost-efficiency in everything that the regulator undertakes, encouraging swift action and value for money. The second principle encourages a participative approach to regulation, where the regulator should look to co-ordinate and co-operate with clubs, individuals at clubs and competition organisers. This reflects that the ideal regulatory environment is one where all stakeholders are working towards the same goals. The third principle encourages proportionality. The regulator should always look to choose the least restrictive option that delivers the intended outcome, and be able to justify why any restriction or burden is worth it for the benefits expected.

The fourth principle encourages the regulator to acknowledge the unique sporting context it is regulating within. For example, it should consider the existing rules and burdens clubs are subject to, and that market features—such as transfer windows—impose unique constraints on clubs.

The fifth principle encourages the regulator to apply regulation consistently, while still ensuring requirements are appropriately tailored to a club’s specific circumstances. A Premier League club and a National League club operate in very different ways and face different risks. The regulator must take this into account when regulating. When clubs are equally risky, they should face equivalent requirements.

The sixth principle encourages the regulator, where appropriate, to hold the individuals responsible for making decisions at a club accountable for the actions of the club and its regulatory compliance. For too long, clubs and fans have suffered the consequences of bad actors and mismanagement by the individuals calling the shots.

The seventh and final principle encourages the regulator to be as transparent as possible in its actions. While the regulator will handle some sensitive information that should not be shared, it should look to provide and publish appropriate information on decisions wherever possible. It is important that the regulator, and its regime, are open and accessible to the industry, fans, and the general public.

[Stephanie Peacock]

I am pleased to welcome this clause, which sets out the principles with which the regulator will regulate. Along with clear objectives and duties, as well as the guidance which we will go on to discuss, the principles will provide the regulator with clear direction and transparency in its dealings, which have long been missing from football governance. In particular, I would like to welcome the principle of proportionality. This principle should be very reassuring to well-run clubs who may otherwise have feared an over-burdensome regime. The proportionality requirement will ensure that where clubs are running sustainably, with low risk of harm, the regulator will have less of a role. In return, any restriction that the regulator does impose will be linked to a beneficial outcome.

It is also good to see the importance of consistency recognised, so that the regime is applied fairly, while acknowledging the relative circumstances of clubs. It is important that regulation is applied in the same way, where circumstances and risks are also the same. However, there may very well be differing conditions at the very top of the Premier League, in comparison to the National League, where I know there are fears about the burden of compliance, as we heard in our evidence earlier this week. The principles should help to alleviate any fears that the regulator will act without nuance on these differences. It will be an appropriately tailored regime, while maintaining a fair application of the rules overall. This is something that I am sure we will revisit multiple times in Committee.

I have a few questions I would like to clarify on these principles, including how the principles have changed since the White Paper. The initial document set out 10 proposed regulatory principles that were described as “basic and fundamental rules” for the regulator to follow. In the Bill, however, we are left with just seven. Some of this is due to condensing the principles into a smaller number. I understand the desire to not be over-wordy, but I do question whether that was necessary. For example, although the concepts of coherence and being context-specific overlap, each deserves an individual consideration.

Perhaps more concerning is that, looking closely at what has changed, some of the principles have been left out altogether. One clear omission is the principle of bold enforcement. The White Paper described how this principle would work as follows,

“When advocacy is ineffective, or in critical situations, intervention and enforcement should be bold. Sanctions should be strong and aim to deter future non-compliance.”

I am interested to hear from the Minister why this has been left out of the Bill. It is, of course, incredibly important that the regulator is not unduly heavy handed but, given the requirements for proportionality and constructive working, it is interesting that this is not complemented by the principle of bold enforcement, when this is actually necessary in critical situations.

Another omission is the principle that all decisions taken by the regulator should be evidence led. In the White Paper this was framed as being important so that all the regulator’s decisions can be defensible under scrutiny, being backed up by data, investigation, and information. Could the Minister give a reason as to why we would not want to see a regulator that puts data and evidence at the core of decision making? That is surely the intention of the Bill, and we cannot have regulation based on whims alone.

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[Stuart Andrew]

We are committed to establishing the regulator as fast as possible post the passing of the Bill. To that end, we are building the regulator in shadow form within the Department for Culture, Media and Sport in parallel to the passage of the Bill, to enable the regulator to hit the ground running once it is legally established.

On the creation of the regulator, it will be necessary for property, rights, liabilities and staff held by the shadow regulator within DCMS to be transferred to the regulator. The most appropriate vehicle for affecting those transfers will be a statutory transfer scheme, as has been used in similar situations involving transfers of assets following the transfers of functions between public bodies. The details of such transfers will be determined at the point of transfer.

Question put and agreed to.

Clause 9 accordingly ordered to stand part of the Bill.

Schedule 3 agreed to.

Clause 10

State of the game report

[Stephanie Peacock]

I beg to move amendment 11, in clause 10, page 6, line 21, at end insert—

“(ba) an evaluation of the potential impact of ticket pricing and kick off times on fans and make recommendations in accordance with that evaluation.”

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[Stephanie Peacock]

I completely understand the hon. Gentleman’s point, and we respect the fact that it is a commercial decision. Obviously, like me, he will have heard the evidence sessions. Fan groups said time and again that this is a really important issue and that they are not being consulted meaningfully. My hon. Friend the Member for Liverpool, West Derby gave a good example of the benefit to fans; we are simply trying to highlight that point, because we want that meaningful relationship with fans to be as constructive as possible.

I will briefly move on to kick-off times. The FSA says that one of the biggest sources of complaints to its inbox is match-going fans complaining about the scheduling of games. That is not just grumbling about inconvenience; late changes to scheduling can impact on fans’ lives and finances. With good notice for games, fans can book time off work, access advance rail tickets and accommodation, and budget accordingly. Late changes to kick-off times, which are becoming increasingly common, mean that fans are forced to make expensive cancellations or spend large sums on last-minute public transport and hotel bookings.

If the purpose of the Bill is to ensure that the game continues to serve the interests of fans and contribute to the wellbeing of local communities, the regulator must at least be taking note of the areas that matter most to fans. To reiterate, I do not believe it would be right for the regulator to take any kind of proactive role in dictating to clubs and competition organisers when matches should be played, but as I have said many times before, Ministers have repeated themselves over and over about how important fans are to football, so if that is the case, both the state of the game report and the clubs, when consulting fans, should be looking at the areas that matter most to those people.

[Stuart Andrew]

I absolutely recognise that issues such as ticket pricing are really important to fans. Indeed, match days, as others have said, would not be what they are without the fans. The Government believe it is important that clubs consult fans on key off-pitch issues that impact supporters, including operational and match-day issues. These provisions, and the wider provisions for fan engagement, will ensure that fans have a voice on the issues that are most important to them, but it would not be appropriate—the hon. Member for Barnsley East was alluding to this—for the regulator to be a fix for all of football’s woes. Rather, it will be set up with a tightly focused and defined scope and purpose, to tackle the specific market failures that carry a risk of significant harm to fans and communities.

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[Stuart Andrew]

Again, the clubs will have that engagement and raise those points with their own individual club—the away clubs can raise the issues within their club. This is actually putting it into legislation. It gives them that opportunity, which does not currently exist.

The Government do not believe that amendments 6 and 18 are necessary, as we expect that

“operational and match-day issues”

will already capture ticket pricing, and kick-off times are ultimately a sporting decision. It is not for the regulator to intervene on the sporting calendar, but I do recognise the issues that it causes for fans. It has been raised in Culture, Media and Sport questions with me on a number of occasions, and I have raised it with the authorities. They have promised to come back to me although, in fairness to them, these decisions are sometimes out of their control too. It is quite a challenging area.

The Government would welcome any club that chose to go beyond the relevant matters and consulted fans on kick-off times and everything else. However, as I have just mentioned, it is not always an issue that clubs have enough control over to adequately consult fans and respond to opinions. Therefore, to mandate them to do so could be problematic.

For those reasons, I am not able to accept the amendments and I hope the hon. Member for Barnsley East’s will therefore withdraw them.

[Stephanie Peacock]

I appreciate the Minister’s comments. I am happy not to move amendment 18 but I would like to proceed to a vote on amendment 11.

Question put, That the amendment be made.

--- Later in debate ---

[Stuart Andrew]

The purpose of the state of the game report is to allow the regulator to better understand the finances and economics of English football, and is currently intended to include the top five tiers of men’s professional football. That, in turn, informs the regulator’s approach to the exercise of its functions and decision making across the regulatory framework.

The amendment would require the regulator to, in addition, consider the state of women’s football in England in the state of the game report, but we have been clear that that is not the intended scope of the regulator’s functions. As we set out in the White Paper, consultation response, and the Bill’s accompanying explanatory notes, we intend this to be for the top five tiers of the men’s professional game. That reflects the fact that the regulator’s scope has been carefully targeted at addressing harm where industry has failed to reform.

That said, where appropriate, the regulator has the ability to share relevant information, guidance and best practice with relevant industry bodies to deliver an effective framework of regulation. Indeed, the Government expects that that could include sharing information with NewCo, the independent entity responsible for managing the women’s professional game. The women’s game is at an exciting and pivotal stage, and should be afforded the opportunity to self-regulate in the first instance. That is why it is not part of the regulator’s intended scope, nor would it therefore be appropriate for it to be within the scope of the state of the game report.

But, even without an explicit statutory requirement, there is nothing to stop the Government or industry looking into women’s football and the unique challenges that it faces. Indeed, this Government have remained committed to supporting women’s football at every opportunity, including with the review that I mentioned a moment ago. In our Government response to that review, we demonstrated our support for all 10 strategic recommendations, and we believe that those need to be acted on to lift minimum standards and deliver bold and sustainable growth for women’s football at both elite and grassroots levels.

If, in future, the women’s game was brought into the scope of the regulator, it would then fall within the matters to be covered as part of the state of the game report. I would like to reassure Members that the future of women’s football, and addressing the challenges that it faces, is hugely important. However, we think that considering that as part of the state of the game report would not be appropriate, given that the report is focused on matters within the scope of the regulator. For those reasons, I am not able to accept the amendment from the hon. Member for Barnsley East, and I therefore hope that she will withdraw it.

[Stephanie Peacock]

I thank the Minister for his explanation. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 10 accordingly ordered to stand part of the Bill.

Clause 11

Football governance statement

Question proposed, That the clause stand part of the Bill.

[The Chair]

With this it will be convenient to discuss clause 12 stand part.

Clause 13 stand part.

[Stuart Andrew]

Clause 11 provides a power for the Secretary of State to issue a statement on the Government’s policies relating to football governance. A football governance statement can be used only to flag issues within the scope of the regulator’s regulatory regime and should not be used to direct its day-to-day operations.

The regulator’s general duties, set out in clause 7, require it to “have regard” to any football governance statement when exercising its functions under the Bill. It is common practice for the Government to issue a similar statement with other regulators. The clause is an appropriate and proportionate power, which will help to give assurance to the Government and Parliament that the regulator is acting within its regulatory scope and has regard to arising issues. It will not interfere with any daily operations or affect the independence of the regulator.

On clause 12, the football industry should not be left to piece together what is expected of it based on the legislation alone. That is why the clause empowers the regulator to prepare and publish guidance on the exercise of its functions. That guidance will be crucial to translating the legal framework in the legislation into a detailed and practical explanation of the regulator’s regime. It will ensure that the industry understands the regulatory system, what to expect from the regulator and what is expected of it. Not only will that reduce burdens but it should, hopefully, improve compliance. The clause sets out that the regulator must publish guidance about the exercise of its functions under specific sections of the Bill and also permits the regulator to publish guidance about the exercise of any of its other functions. The regulator must consult any persons it considers appropriate before publishing guidance for the first time and before revising guidance in future, unless those revisions are minor. That will ensure the regulator takes into account the views of all relevant stakeholders and experts when preparing its guidance.

Clause 13 permits the Secretary of State to prepare and publish guidance on the regulator’s functions. That guidance is an opportunity to provide some additional detail as to how the Government intend the regime to be implemented, which was not suitable for inclusion in legislation. The industry and fans alike have been clear that they do not want to see ongoing Government involvement in football. That is why the regulator must have regard to the Secretary of State’s guidance but is not obliged to follow it.

[Stephanie Peacock]

Clause 11 allows the Secretary of State to prepare, publish and lay before Parliament a football governance statement setting out the policies of the Government that relate to the governance of football, to which the regulator should have regard. First, I want to acknowledge that it is right that the regulator’s processes are independent of political influence. The core purpose of the new body is to be given independent jurisdiction over a remit focused on the sustainability of English football and it should have autonomy over its decision-making processes. I know that the likes of the Premier League are concerned that the statement might jeopardise that independence. Can the Minister confirm otherwise? I am sure he spoke about that in his remarks, but he can add more when he gets to his feet again.

Regardless of that, the independence of the regulator does not mean that there will be no interaction between its work and the will of the Government on football governance more broadly. It will therefore be helpful for the regulator to have a clear statement from the Government on relevant policies that might have an impact on its work. It is right that the statement is non-binding, to hopefully give the regulator the contextual information it needs without compromising its independence. It is also right that the statement cannot contain policies that are inconsistent with the purpose of the Bill or the regulator’s objective. That means that Government policy and the regulator will be united on the cause of ensuring the sustainability of English football. I am hopeful that the clause will therefore act as another confirmation that the independent regulator will work collaboratively within the many existing structures that have an impact on the game.

As the hon. Member for Chatham and Aylesford said on Second Reading, clauses 12 and 13 will be key to how the regulator evolves. Indeed, many of the questions I will ask the Minister in Committee are on topics that I believe will likely be answered more fully as part of the guidance that will accompany the Bill’s provisions. In short, the Bill is intended to provide a robust framework, and the guidance will flesh out how that framework can be translated into a real-life explanation of how the regulator will work in practice.

The guidance will improve transparency while also providing clarity for the competitions and clubs that will have to comply with the new regime. On clause 12 in particular, which relates to guidance that will be published by the regulator itself, that set-up will also enable the regulator to have some autonomy in the detail of its approach, subject to proper consultation and clear parameters set by the Bill. The IFR guidance on how it will exercise its functions relating to the discretionary licence conditions will be mandatory, with further guidance in other areas being optional. That will be incredibly important for clubs, allowing them to understand what the regulator seeks to achieve through the use of club-specific licence conditions and to become familiar with the detail of how the regime will be enforced.

There are many further areas in which I believe the IFR guidance will be beneficial so that the minimum standards are set. One area that springs to mind, and that I am sure we will go on to discuss, is how clubs can ensure their fan consultation meets the regulator’s expectations, as well as the requirements in the Bill. I would be interested to hear from the Minister on any other areas in which he believes guidance would be helpful. As with the state of the game report, the timely publication of the guidance will be crucial. Clubs and competitions will want clarity at the right time as they prepare for and adjust to the new regulatory regime. Can the Minister provide some insight on the timelines to which the IFR will or should be working to with regard to the guidance on passage of the Bill?

Clause 13, “Guidance published by the Secretary of State”, will primarily benefit the IFR. It is important that the regulator is able to understand the full intention behind the framework that the Bill provides so that it can exercise its functions accordingly. It is right that the guidance involves consultation with the IFR and relevant parties so that the resulting guidance is genuinely useful for facilitating the IFR’s work on football governance. In combination with clause 12, this will provide the colour to the clear boundaries that we are working to set through this Bill.

[Stuart Andrew]

I absolutely want to assure the hon. Lady about independence. It is essential that the regulator can deliver its regime free from any undue influence from industry or Government. However, as is the case with other regulators, it is appropriate that the regulator is accountable to both Parliament and Government. Holding it to account is also important to industry, which is why the Bill provides for that in a way that is proportionate while also protecting the regulator’s operational independence.

It will be for the regulator to determine when and where it publishes its guidance. We do not specify where it should be published, but we strongly expect that it will be published on its website in an easily accessible format in the way that most other regulators do, such as the Financial Conduct Authority with its handbook.

--- Later in debate ---

[Stuart Andrew]

The clause requires the regulator to report annually to Parliament on its activities for that year. As with all public bodies, the regulator must arrange for the report to be laid before Parliament by the Secretary of State for purposes of transparency and scrutiny. The Secretary of State will have some flexibility to direct additional material to be included in the annual report to reflect further specific activity undertaken by the regulator or wider industry that year. That will help to ensure that the regulator produces its annual report consistently each year, and it will also ensure that it captures all relevant information, thereby allowing Parliament to have adequate oversight.

[Stephanie Peacock]

It is right that the independent regulator be required to submit an annual report on the exercise of its functions. In the interest of transparency and accountability, I believe it is standard practice for regulators to produce such annual reports and accounts, and the Independent Football Regulator should be no exception, so I have no particular worries or further questions.

Question put and agreed to.

Clause 14 accordingly ordered to stand part of the Bill.

Ordered, That further consideration be now adjourned. —(Mike Wood.)

Football Governance Bill (First sitting)

Debate between Stephanie Peacock and Stuart Andrew

Committee stage
Tuesday 14th May 2024 Public Bill Committees

[Stephanie Peacock]

Q Are there any particular topics that you would expect fans to be consulted on but that the Bill does not require?

Kevin Miles: We have had a long discussion with officials about exactly what the scope of engagement with fans should be. We think the fan engagement regime needs to be robust, it needs to be appropriate to the circumstances of all the regulated clubs and it needs to be based on democratic principles, with the composition of the fan representatives being determined independently of the clubs themselves. We have had some conversations about what the particular terms of the content of fan engagement should be and we have been talking to officials and Ministers about that. The list includes strategic direction and objectives of the club, the club’s business priorities, operational matchday issues, the club’s heritage and the club’s plans relating to additional fan engagement. That is as it currently stands.

When we have asked officials about specific examples of that, they have come back, for instance, on ticket pricing, saying “We expect those to be included in business priorities and operational and matchday issues.” However, there is currently a set-up in the Premier League of fan advisory boards that are required, under the Premier League’s rules, to engage with clubs. It seems to officials in the DCMS, as a matter of common sense, that ticket pricing would be one of the things that fans would discuss with their clubs. It seems to me a matter of common sense that ticket pricing is one of the things that fans would discuss with their clubs.

Yet, in the Premier League system, our members tell us that at Newcastle United, the fan advisory board was given three days’ notice of the ticket price increases without any consultation. At Fulham, there is no fan advisory board, but the supporters’ clubs there got four hours’ notice with an embargo before the announcement of ticket price increases. Nottingham Forest announced its prices without any discussion with its fan advisory board or the trust. Similar representations have been made to us about similar experiences at Bournemouth, Tottenham, Arsenal and Liverpool. That is happening already, and that is why we think that perhaps it would be useful to have in the Bill the additional words “including ticket prices”, just to make it explicitly clear.

The general point is that there is a lot in the Bill that depends on the view the regulator takes about what is included and the guidance that is given to the regulator. We would appreciate really strong statements from Ministers in the course of this process. That might help us to avoid the necessity of amending the Bill, but a strong direction from Ministers about what should be in scope and what is required of fan engagement to fill some of those gaps would be really useful.

[Stuart Andrew]

Q First of all, thank you, Kevin, for what you said about the officials. You are absolutely right; they have been superb throughout this whole process. Thank you, too, for your engagement.

I remember when I was first appointed, the first meeting I had was with you and with other fans. It was clear from that meeting that some clubs do engagement extremely well and, as you have just alluded to, there are others that do it differently. Given that fan engagement is part of the licensing regime, do you think that that is going to be sufficient to bring about a significant impact on the quality of fan engagement that we are currently seeing across the board? That is, are we levelling up, to coin a phrase?

Kevin Miles: I very much hope so, and I am optimistic in that regard. It is the first time that we will have had a requirement from clubs to engage with the fans and, to use the Prime Minister’s words, to put the fans’ voice “front and centre” of all those discussions. I do think, though, that there are a lot of details still to be worked out about how that actually looks.

There are some clubs, as you say, that are very good, but one of the illustrations of the limitations of self-regulation has been that when the leagues have been trying to put together their own requirements on fan engagement, because it has to be voted on by their members and agreed by their rulebook, the lowest common denominator tends to be put into the rulebook. We know that there are clubs that will resist the idea. There are owners who think they have nothing to benefit from in listening to the fanbase—their customer base, if you like. We know from experience that there are some who will do everything that they can to get around this. We will need to have an underpinning of that in the regulatory system, and some monitoring of it through the club licensing system. We recognise that this is challenging, because it cannot simply be a look at what structures are put in place. The regulator will have to do more than just monitor that there is a fan advisory board notionally in place. There will have to be some evaluation and examination of the content and spirit of the fan engagement. We are not expecting a fan veto on club decisions, but we are expecting that the fan voice is not just heard but listened to and given due consideration.

Evaluating that is a more complex process. Somebody referred earlier—I think in the first witness panel—to the possibility of Ofsted-type investigations. Maybe in some cases it will require the regulator to be able to consult the fan groups to see how they think it has been done, and to make its own evaluation about whether the spirit of what is intended here is actually being carried forward. That will need to be underpinned by requirements in the licensing condition.

Oral Answers to Questions

Debate between Stephanie Peacock and Stuart Andrew

Thursday 18th April 2024 Commons Chamber

[Stephanie Peacock (Barnsley East) (Lab)]

Everyone deserves to feel safe playing the sport that they love. In the context of, sadly, too many former professional players suffering from dementia, what steps is the Department taking to ensure that sports governing bodies have the guidance they need to ensure the safety of professional players?

[Stuart Andrew]

The hon. Lady has raised an important point, as have other Members. The Government are leading work on concussion in particular. We have worked with stakeholders and developed the first guidelines to be distributed to the grassroots, which have also aided professional sports. The evaluation of this is ongoing and will be invaluable in helping us to improve sport-related education and health. We have also convened a sports concussion research group to identify the questions that still need answering, as well as an innovation and technology panel, whose members are looking at the practical, technical solutions that will aid safety and mitigate concussion. However, as I have said, this is an incredibly important area and one on which we will focus.