David Conn: MPs set to call for help for lower divisions

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The Independent Football

Pressure on the Football Association, Premier League and Football League to pull themselves together to run football on a decent, sensible basis will be dramatically increased this week with the publication of two separate reports which contain remarkably similar conclusions about the game's financial problems and the measures required to address them.

The Independent Football Commission, launching its second annual report this coming Tuesday, will welcome the limited moves the authorities have made to wrestle with the game's crisis, but strongly criticise a generally slack response, including the Football Association's slowness to implement the much-talked-about, yet-to-be-seen "fit and proper person test" for football club directors.

The following day, Wednesday, the All-Party Parliamentary Football Group, which represents peers and more than 150 MPs, will publish its report following a six-month investigation into the game's financial meltdown. The group's chairman, Alan Keen MP, is not commenting publicly in advance, but according to sources close to the group, it too will call for urgent implementation of the "fit and proper person test", and make several other substantial recommendations for better governance of clubs.

The Parliamentary report is also expected to call for more equal distribution of money between the perma-tanned, billion-pound Premier League and the sallow faces of the cash-strapped Football League.

The impact of the two reports will be amplified greatly by their arriving together. Here are two serious, considered investigations by quite separate bodies, involving substantial research - 94 clubs, experts, supporters' groups and other organisations consulted by the IFC last year; months of oral and written evidence compiled by the Parliamentary Group - reaching broadly the same judgement of the state of the game.

In fact, their overall assessment is almost identical; the peers and MPs are understood to have been particularly struck by the chasm between the Premier League and the rest of football, and their report is expected to sum this up by observing: "There is more money in football than ever before, but more clubs are failing than ever before."

The IFC will make the same observation in its report, a copy of which I have seen. Phrased in the stiffer language of corporate governance-speak, beginning a section entitled "The crisis in club finances", the IFC says: "Football has never had such a high level of external resourcing, yet has never had so many clubs in financial difficulty."

The Premier League, whose clubs broke away in 1992 from sharing their money within the Football League, has long pooh-poohed the idea that this has contributed to the game's financial problems, or even that there is a crisis. The Premiership's chief executive, Richard Scudamore, told the Parliamentary inquiry that he believed football's money is distributed in the right balance and there is no need for reform.

However, the status quo has become increasingly difficult to defend. When the IFC was established in March 2002, after a tortuous and at times tawdry process, clubs' financial management was not itself the central issue. The Government's Football Task Force had been more concerned with the rip-off of fans which has seen ticket prices inflate around 700 per cent since the 1990 Taylor Report, and with the alienating advent of the plcs.

A majority of the Government's Football Task Force called for firmer regulation, but the Government sided with the authorities and agreed to the setting-up of the IFC as football's "self-regulatory body", to produce an annual report on the running of the game. Scudamore even sat on the three-man selection panel, which came up with Derek Fraser, the now-retired vice-chancellor of Teesside University, as the IFC's chairman.

Within days, however, ITV Digital collapsed, highlighting the many clubs living dangerously and the perils of relegation from the Premier League - the drop in television income alone being an average £25m in the Premiership down to £500,000 in the First Division. Since then, Bradford City, Leicester, Ipswich, Barnsley, Wimbledon, Notts County, Oldham, Darlington, Exeter, Port Vale, Huddersfield, York City and Carlisle United have all collapsed into administration. Luton went into administrative receivership, Derby County was repossessed by receivers appointed by the Co-operative Bank, and many other clubs have tottered on the brink of insolvency.

The IFC, which, along with its chairman, is battling to win the confidence of football fans, has attacked the subject rigorously in this, a crucial report for its credibility, and not held back in its conclusions. It criticises poor management and financial excesses at clubs, and a lack of effective leadership by the governing bodies, Fraser pointedly calling on the Premier League to submit itself to the FA's Financial Advisory Unit, saying it "cannot exclude itself from scrutiny by the FA in this or other areas".

The report will also highlight the embarrassing practice, now more than 20 years old, of clubs being allowed to form holding companies to bypass the FA's own rules, particularly when floating on the Stock Exchange. Instead, the IFC report will say, the FA has a duty to continue to protect clubs' "communal and sporting nature [which] should be a driving force for modernising the rule, not abandoning it".

Other observations include: "Asset-stripping has occurred on sufficient occasions as to seem uncontrolled ... So widespread have been the corporate failures in football, so inexplicable has been the seeming irresponsibility in the boardrooms of financially troubled clubs, so difficult has it been for lovers of the game to find out who are its custodians and be reassured by them, that some have seriously asked whether ... football is outside the conditions and conventions of 'normal' business."

The IFC concludes that it is not, as does the Parliamentary group, and argues that the running of the national game needs to do justice to the loyalty, passion and affection it invokes. Their recipes for improvement call for the grey-haired, middle aged whiteness of the governing bodies to be reformed to reflect some semblance of modern Britain, and for clubs to be run according to the prevailing modern standards, by directors vetted not only for their integrity but also their sanity and ability to fund their plans.

The FA, now headed by Mark Palios, an insolvency practitioner and former lower-division footballer, is called upon to live up to its responsibility as the governing body of the game and implement rules to protect the clubs and promote good practice.

The Parliamentary report is expected to remind the authorities that, should they fail again, statutory regulation, imposed by legislation, is another alternative. The IFC does not go that far, but its future will be decided this coming year, when it intends to boldly go into areas such as distribution of money, agents and conflicts of interest, where the game's rulers have never liked anybody to go before.

Both reports, however, pay due respect to efforts by the authorities so far to improve things; they are keen to stress they come as friends. As with so many who love and value the game, they appear bemused by how lamentably it is run; they simply do not believe it has to be this way. The authorities will have to read, digest and respond.

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