FA told to bring in licensing to control clubs’ spiralling debts

The Government yesterday published their response to the select committee report on football governance and called for further changes to the make-up of the FA board.

The FA, working with the leagues, should take a leading role in monitoring finances as part of a new licensing system, the response said.

Sports Minister Hugh Robertson said: “This is an opportunity for football to sort this out for itself.

“They have until the end of February to do so, otherwise we will introduce legislation to require them to make the necessary changes.”

Robertson said the football authorities did not have to agree to follow the select committee’s proposals exactly but if not then they had to come up with an alternative solution.

“This is an opportunity to come up with something sensible that tackles the issues that have been raised,” he said.

The Government’s response says there should be a system of licensing for clubs where financial sustainability and robust checks on club owners and directors are included.

The response states: “The Government shares the concern expressed by the committee at the extent of losses and the number of clubs on the edge of viability.

“Debt per se is not always a bad thing, but it must be genuinely sustainable and should be assessed as a percentage of turnover.

“Government believes that there is a legitimate role for the national governing body, working hand in hand with competition organisers, to ensure that appropriate and consistent checks and balances are in place to protect the overall financial integrity of the national game and its long-term viability.

“The recent moves by the Football League to work towards a break-even rule in the Championship are a welcome indication of the appetite amongst many clubs for a change.”

The response adds: “The Government expects that the issue of financial sustainability should be addressed as part of the recommendations on the new licensing model.”

The report makes clear the Government’s threat to bring in legislation if reforms are not made.

It states: “We expect the football authorities to work together to agree proposals, including plans for implementation, by 29 February 2012.

“The new board can then agree the way forward for the remainder of the recommendations, ideally for implementation for the start of the 2012-13 football season.

“If that does not happen the Government will introduce a legal requirement on the Football Association to implement the appropriate governance clauses by the swiftest possible means.”

The Government’s proposals also call for reform of the FA board. They propose the new structure should be made up of chairman, general secretary, two further FA executives “bringing wider football expertise”, two independent non-executive directors and two each from the professional and national game.

The FA Council’s role should be changed so that committees report to the FA board instead, with a maximum limit of eight years for council members.

The football authorities should look at ways to encourage more fans onto club boards, say the Government, and clubs should be forced to release players for England duty at all age levels from Under-17 upwards.

A joint FA, Premier League and Football League statement said they would take some time to decide on action.

The statement said: “We shall now take time to consider the department’s response as we formulate what the most appropriate actions might be.

“The FA, the Premier League, the Football League and representatives of the national game are already engaged in this process and are committed to keeping the Minister and his department informed of our progress.”

Key points where game must change

Football authorities to work together to agree proposals by Feb 29, 2012 to be implemented at start of the 2012-13 season.

The FA, working with the leagues, to bring in a licensing system that monitors debt levels and financial sustainability at clubs.

The licensing system to be used to impose “robust” checks on prospective owners and directors of clubs.

The FA board to be reformed to comprise a chairman, general secretary, two further FA executives “bringing wider football expertise”, two independent non-executive directors and two each from professional and national game.

The FA Council’s role should be changed so that committees report to FA board instead, with a maximum limit of eight years for council members.

Football authorities should look at ways to encourage more fans on clubs’ boards.

Clubs should be forced to release players for England duty at all age levels from Under-17 upwards.

Government warn if changes are not made they will “introduce a legal requirement on the FA to implement the appropriate governance clauses by the swiftest possible means”.