The Government has announced "formal support" for 10 key recommendations to change English football proposed by a fan-led review that promises a major shake-up of the game in this country.
Tracey Crouch MP has worked with supporter groups to lay out a blueprint for the future of the game, including a focus on sustainability, distribution of wealth and a bid to stop rogue owners. The project followed an outcry over an attempted breakaway European Super League, demise of professional clubs Bury and Macclesfield Town and major struggles of others including Bolton Wanderers and, most recently, Derby County, who have been in administration since September.
The Government will now set out its full response on Monday afternoon following a statement to the House of Commons by Sports Minister Nigel Huddleston. It will mean substantial change in the background to the operation of all clubs including Nottingham Forest.
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Key strategies being endorsed include the introduction of a new independent regulator, ensuring that football is "sustainable and competitive for the benefit of existing and future fans and the local communities football clubs serve". Each club in National League and above will be required to hold a licence to operate and be subject to various conditions.
The regulator will also oversee finances and manage the amount that owners can inject into clubs based on "the size of a club's existing finances" or if it will "destabilise the long-term sustainability of the wider league".
Owners and potential owners will have to pass new tests "to ensure that only good custodians ... can run these vital assets". Prospective owners will have to submit a business plan for assessment to the regulator, including financial forecasts.
Supporters will be able to set up a 'shadow board' to be "properly consulted by their clubs in taking key decisions". Recommendations say clubs should "engage and consult on all material ‘non football/off pitch’ business and financial matters".
There will also be additional protection for key items of 'club heritage' such as the sale of a stadium, relocation outside a local area, joining a new competition that is not approved by Fifa, Uefa and the FA or leaving a competition in which it currently plays, the club badge, first team colours and club playing name.
The report also calls for fairer distribution of wealth, scrapping the FA's current formula for sharing revenue. This includes "a new compulsory clause to adjust players' salaries at a standard rate upwards on promotion or downwards on relegation" and 'a solidarity transfer levy" for Premier League clubs.
Crouch said: “I am exceptionally pleased it has accepted or supported all the strategic recommendations of the review, including committing to legislation for a statutory independent regulator which will regulate financial resilience as well as ownership of clubs.
“This is an enormous step forward in providing much-needed reform for football. I am also very pleased by the commitment to a review of women’s football, as well as to the long overdue review of the outdated legislation relating to football supporters and the sale of alcohol.
“While fans will be reassured by the commitment to an independent regulator and its powers, they will remain nervous that this commitment will be delayed or watered down by the vested and conflicted interests in the game which have resisted the much-needed reform for so long.
“Fans fully recognise the complexities of the recommended reforms, but the unspecified time frame for implementation due to a white paper at some point in the summer is worrying. Further delays could be catastrophic for clubs, communities, and fans seeking a more secure and certain regulatory environment.”
The fan-led review suggested the Premier League and the EFL should be given until the end of 2021 to reach an agreement on financial redistribution or seek external support, which has not happened.
The legislation will be introduced in 2023 but the Government has no clear timescale about when a regulator will be in place.
Labour’s Shadow Culture Secretary Lucy Powell MP said: “While Labour fully support football reform and a new statutory regulator, there’s no dressing up that this announcement will come as a massive disappointment to fans across the country.
“After a government review and many previous promises to legislate, today’s announcement of a further consultation later this year, and a delay to legislation until at least 2024 is a kick in the teeth to proud footballing communities across England.
“Bury has already collapsed. Derby County is on the brink and has now been relegated. Oldham is out of the football league for the first time in its history. Every club that goes under in the minimum two years delay to football regulation will rest on the Government’s shoulders.”
The fan-led review's 10 key recommendations in full
To ensure the long-term sustainability of football, the Government should create a new independent regulator for English football (IREF)
1. IREF should have a statutory objective of ensuring English football is sustainable and competitive for the benefit of existing and future fans and the local communities football clubs serve. It should have further duties to promote other aspects of the game.
2. In achieving its objectives, IREF should utilise a licensing system under which each club operating in professional men’s football, i.e Step 5 level (National League) or above would be required to hold a licence to operate, and be subject to various licence conditions. Licence fees should be based on a sliding scale of broadcast revenue.
3. IREF to operate a system of advocacy to help clubs comply with rules, but also have strong investigatory and enforcement powers.
4. IREF should have a chair and board with expertise from a range of industries, appointed by a panel of experts separate from the Government. The FA should have observer status on the IREF board.
5. IREF should publish an annual report setting out its operational and financial performance for the previous year and be accountable to Parliament, meeting with the Digital, Culture, Media and Sport Select Committee at least once a year to review its operational performance and value for money.
6. IREF should be set up in a shadow form, working with the industry to ensure it is operationally functional as soon as legislation comes into force.
To ensure financial sustainability of the professional game, IREF should oversee financial regulation in football.
7. The Government should introduce a financial regulation regime operated by IREF based on prudential regulation.
8. IREF should have a proportionality mechanism managing the level of owner subsidies based on the size of a club’s existing finances or if owner injections at one or a few clubs is destabilising the long-term sustainability of the wider league.
9. The Government should explore ways to support the regulation of football agents operating in English football by working with the relevant authorities including FIFA.
New owners’ and directors’ tests for clubs should be established by IREF replacing the three existing tests and ensuring that only good custodians and qualified directors can run these vital assets.
10. Through licence conditions, the new Owners’ and Directors’ Test should be split into two parts, one test for owners’ (i.e. those who own a minimum of 25% shares in the club alone or acting in concert with others) and one test for directors as well as shadow directors, executive management and any individuals holding those roles regardless of job title.
11. In addition to not being subject to any disqualification criteria based on existing rules, prospective new owners should also be required to:
a. submit a business plan for assessment by IREF (to include financial forecasts).
b. evidence sufficient financial resources to meet the requirements of the business plan.
c. be subject to enhanced due diligence checks on source of funds to be developed with the Home Office and National Crime Agency.
d. pass an integrity test.
12. In addition to not being subject to the disqualification criteria, a prospective director should also be required to:
a. demonstrate that they have the necessary professional qualifications, and/ or transferable skills, and/or relevant experience to run the club.
b. pass an integrity test in the same manner as prospective owners.
c. declare any conflicts of interest.
d. declare any personal, professional or business links with the owner of the club in question, or any other club owner (past or present).
13. IREF should conduct, and where possible, publish the results of the Owners’ Test and the Directors’ Test:
a. on entry – for any new owner or director.
b. annually – any appointed owner or director should be required to declare to IREF, as an annual compliance statement, any changes in circumstance within one month of said change, or at the stage of annual licence renewal, if no changes have occurred.
c. every three years – for owners only. Any existing owner should re-pass the test on a three year review.
14. IREF should have a range of sanctions to enforce breaches of Owners’ and Directors’ tests.
15. It should be a licence condition that the identity of the Ultimate Beneficial Owner (UBO) of a club be declared to IREF.
Football needs a new approach to corporate governance to support a long-term sustainable future of the game.
16. A new Code for Football Club Governance based on the Sports Governance Code should be introduced for licenced clubs, with compliance being a licensing condition.
17. As a condition of the licence, clubs should be required to publicly present evidence of compliance with the Code for Football Governance on an annual basis.
18. The Code for Football Governance should adopt a model which includes a proportionate approach to the governance requirements. Tier A should involve the highest level of requirements and should apply to Premier League and Championship clubs, with Tier B applicable to Leagues One and Two, with minimum standards applying to Tier C to the National League.
19. The Code for Football Governance should also operate with a ‘ratchet’ system in that a club cannot drop a Tier in its governance. The Code for Football Governance should allow a period of settlement for clubs who are promoted and therefore required to adhere to new requirements.
20. The Code for Football Governance should adopt basic minimum requirements which will apply to all clubs including those in the Sports Governance Code, and additional minimum requirements relating to directors, equality and diversity, fan engagement, welfare and stewardship.
21. The Code for Football Governance should adopt an ‘apply and explain’ model for implementation of its requirements.
22. The English football authorities should continue to reform their own corporate governance to create independence in decision making from the vested interests in the game, including boards of at least 50% independent directors and the removal of historic oddities such as the need for the FA Chair to be approved by the FA Council.
Football needs to improve equality, diversity and inclusion in clubs with committed EDI Action Plans regularly assessed by IREF.
23. IREF should mandate that each club have an Equality, Diversity and Inclusion Action Plan, focusing on the organisation’s EDI objectives and how it is going to achieve them, as part of the annual licensing process.
24. The football authorities should work more closely to ensure consistent campaigns across the various organisations, and where possible, pooling resources to increase the impact of these important initiatives.
25. The Government should work with the football authorities to explore the possibility of a new, single repository for reports of discrimination.
As a uniquely important stakeholder, supporters should be properly consulted by their clubs in taking key decisions by means of a Shadow Board.
26. A Shadow Board should be a licensing condition of IREF. The club should engage and consult this Shadow Board on all material ‘non football/off pitch’ business and financial matters.
27. The football authorities should work with the FSA to upgrade the current Independent Football Ombudsman so that it meets the criteria for full membership of the Ombudsman Association.
Football clubs are a vital part of their local communities, in recognition of this there should be additional protection for key items of club heritage.
28. It should be a licence condition that all licenced clubs should include within their articles of association a Golden Share requiring democratic consent to proposed actions relating to identified heritage items. Each Golden Share right should have circumstances in which it will not apply.
29. The consent of the holder of the Golden Share should be required for the sale of the club stadium, relocation outside of the local area which is not a temporary part of a redevelopment, joining a new competition that is not approved by FIFA, UEFA and the FA and/or leaving a competition in which it currently plays, club badge, first team home colours, and club playing name.
30. The Golden Share should be held by a Community Benefit Society formed for the benefit of the club’s supporters operating under standardised rules set by IREF in conjunction with the FCA.
31. Clubs should be required to provide formal notice of any intention to take any material steps or enter into a contract to alter any of the items covered by the Golden Share to which the holder of the Golden Share will have 45 days to notify rejection.
32. There should be an arbitration mechanism, at the club’s expense, which allows for resolution by IREF or a party appointed by IREF of an appeal by the club of any decision to withhold consent by the holder of the Golden Share.
33. The Government should take account of the importance of football clubs to their local communities in planning reform.
34. The Government should amend the National Planning Policy Framework to impose requirements on developers of an existing football stadium to provide new equivalent or better facilities in the same local area before any development work is started.
35. The Government should explore the viability of introducing new security of tenure property rights for clubs where the club does not own the stadium in which it plays.
36. The FA should amend its rules to provide for protection of the additional heritage items identified by this report, to prioritise the voice of supporters in any decision, and to provide clarity on the procedures that will be followed in regard to any heritage changes.
Fair distributions are vital to the long term health of football. The Premier League should guarantee its support to the pyramid and make additional, proportionate contributions to further support football.
37. The FA should scrap its current formula for distributing revenue it generates. The FA should have more flexibility to redistribute revenues as it sees fit, based on its assessment of where funding is most needed in the game.
38. Football should seek to resolve distribution issues itself. If no agreement can be reached by the end of 2021, the Premier League and EFL should commission research to find a solution, with backstop powers for IREF if a solution is still not found.
39. The Leagues, FA, and PFA should work together to include a new compulsory clause in the standard player contracts that provides for an automatic adjustment to player salaries at a standard rate upwards on promotion and downwards on relegation.
40. A solidarity transfer levy should be introduced for Premier League clubs, to support the football pyramid and overseen by IREF. Its level and whether loans should be included should be determined through consultation.
41. IREF should produce or procure on a regular basis an assessment of financial flows, distributions and costs in football to aid policy debate on football finance.
42. The Department for Digital, Culture, Media and Sport works closely with the Home Office, the UK Football Policing Unit and other stakeholders to design, agree, manage, and review a series of small scale, limited, pilots of the sale of alcohol in sight of the pitch, during matches between clubs in the National League and League Two.
43. The Home Office should review the Sporting Events (Control of Alcohol etc.) Act 1985 to establish whether its measures are still fit for purpose in 2022 and beyond, and that it reflects the football culture of the present day; and to provide robust evidence in its conclusion of such a review.
44. The EFL should review its rules on artificial pitches, and at the very least relax its current rules on artificial pitches to offer flexibility to newly promoted clubs, giving them a 3 year grace period to convert to grass pitches.
Women’s football should be treated with parity and given its own dedicated review.
45. Given the many, but interconnected, issues affecting a meaningful future for women’s football needing to be addressed and resolved successfully, the future of women’s football should receive its own dedicated review.
As an urgent matter, the welfare of players exiting the game needs to be better protected - particularly at a young age.
46. As a matter of high priority, the football stakeholders, including the FA, men’s leagues, the PFA, clubs and women’s leagues should work together to devise a holistic and comprehensive player welfare system to fully support players exiting the game, particularly at Academy level but including retiring players, including proactive mental health care and support.
47. The FA should proactively encourage private football academies to affiliate to the local County Football Associations to ensure appropriate standards of safeguarding and education for young players. The FA should explore ways to incentivise this affiliation, perhaps through operation of a ‘kite mark’ scheme or similar and prohibiting registered academies from playing friendly matches against unregistered private academies.
