I wish to inform the House that the Government have today published their response to the recommendations made by the Independent Fan Led Review of Football Governance.
The Government’s response focuses on responding to the review’s 10 strategic recommendations. We accept or support all of the 10 strategic recommendations in our response, which sets out the Government’s planned reform of football. The sum total of our plans amount to significant reform with an independent regulator focused on financial sustainability, and a strengthened approach to ownership of football clubs and their governance.
The Government build on the case for reform set out in the review. We believe that there are two key problems in English football. First, there is significant risk of financial failure among clubs, and secondly, the cultural heritage of English football is at risk of harm. We have identified that these two problems have three root causes: the structure and dynamics of the market create incentives for financial overreach, inadequate corporate governance often affords unchecked decision-making power, and the existing regulation is ineffective. Without reform these financial failures will persist, and the economic and social costs would be substantial. Therefore, the Government believe that there is a need to intervene in football to secure the future of the game.
The issues highlighted in the review are complex and our reforms need detailed and considered analysis to ensure the sustainability of the sector long term. As a result, we have committed to publishing a White Paper in the summer which will set out further details on the implementation of reform.
In response to the strategic recommendations, the Government response sets out a vision for the reform of English football:
An independent regulator for football will be established. The response sets out the proposed objective, scope and powers of the regulator, and that it would oversee a licensing regime of the top five leagues.
The regulator will have a focus on financial regulation. The financial regulation regime will take a holistic approach, bringing together the Owners’ and Directors’ test, corporate governance and equality, and diversity and inclusion as part of one regime.
The current Owners’ and Directors’ tests do not go far enough in assessing suitability for ownership of clubs. The response sets out that the tests should be strengthened by enhancing due diligence to check source of funds and the strength of business and financial plans, and that an integrity-style test will be introduced. The forthcoming White Paper will provide further details on how the enhanced tests will work, and what will be in scope of the integrity test.
We believe that football needs a new approach to corporate governance, proposing a new model to be designed and overseen by the regulator. Football also needs to take further action on diversity and inclusion through their own plans for action. Further consideration will be given to ensure the model is proportionate and appropriate for football.