David Conn: Government's rhetoric exposed by funding gap

Parliamentary report may inspire more reforms but failure to meet previous spending pledges undermines strategy for game

The parliamentary inquiry into football's rocky finances by the All-Party Football Group concluded this week with some steady questioning of senior officials from the Premier League, Football League and Football Association. The MPs and peers, chaired by Alan Keen, dropped regular clues that their report, expected in the new year, is likely to recommend to the Sports Minister, Richard Caborn, firmer regulation of the game and its clubs to prevent financial chaos, and more equal sharing of football's multi-millions, which are jammed so thickly at the top.

Richard Scudamore, the Premier League's chief executive, rolled out a calm, assured performance, stressing the good community work his clubs do, waving a thick document which he insisted, with just a hint of menace, everybody must read. He argued that the biggest current threat to the game is the European Commission's challenge to the Premiership's collective broadcasting deals. The Premier League is deep in negotiations with Brussels on details such as internet rights, and warns of a doomsday for the game if the EC unravels the collective packages and clubs are allowed to sell their own television rights.

Scudamore was asked whether it would not be reasonable, if his collective deals are allowed, for the Premiership to share more of its resulting financial income with the rest of football, but he drew the line there. "It is a legitimate question for you to have an opinion on," he allowed, "but in our view the balance is right." He said clubs should be able to budget for relegation without collapsing into administration and described Ipswich and Leicester, who both went bust last year after dropping from the Premiership, as previously well-run clubs that "lost control of their wage structure."

Sir Brian Mawhinney, the Football League chairman, darkened the mood, however, announcing that the League, although boasting gates consistently rising since 1986, is in the "greatest crisis in its history." He described the gap between the Premier League and First Division as "extremely serious" and "a real problem." Asked whether the Premier League should share more of its money, he said he would not "heap opprobrium" on the Premiership, but if the opportunity arose to discuss it, "I'll be the first through the door."

The inquiry, which has heard from a range of organisations, clubs, fans groups and individuals since it began in June, sprouted from a feeling within the Labour Party that the Government did not go far enough in 2000 following the reports, after three tortuous years, of its Football Task Force. The process produced some progressive initiatives - the Football Foundation, which funds grass roots facilities and community projects, Supporters Direct, which helps fans form trusts and play a role in their clubs, and the Independent Football Commission, the self-regulatory body whose powerlessness and lack of true independence will inevitably be examined by the all-party group.

The Government at the time turned down calls for stronger regulation by a majority of Task Force members, and bowed instead to the football authorities' wishes for lighter reform. However, the subsequent collapse of ITV Digital and flood of clubs going into administration has convinced many that more urgent action is needed.

It is, though, evident that the football authorities are inclined to move if there is any hint of Government regulation. Nic Coward, the FA's director of corporate and legal affairs, arrived at the inquiry with news that the governing body's new Financial Advisory Committee had met just last week, and, at too short notice for the members to digest fully, presented a list of areas the FA will now explore. It is understood to include the long awaited "fit and proper" test for club directors, a proposed review of where the cash in football comes from and where it goes, and a call for clubs to openly report to the FA their financial health and plans. This represents progress, still arguably not quick enough, but it is difficult to believe it would be happening without the Task Force and the nudge which this inquiry has provided.

But if the inquiry does produce a robust report recommending some Government action, it will only prompt the question, again, of whether the Government, having been through one bloody tussle with the football authorities, has the stomach for another.

Its ministers show little obvious appetite for it. Sport has largely coalesced with this government into a two-pronged affair; bids for reflected glamour - the ill-fated campaign for the World Cup in 2006 and now the 2012 Olympic bid - and decent, valuable work at the grass roots, in which Richard Caborn clearly believes.

However, the Government's actual support for its own football projects does not match its rhetoric. When the Football Foundation launched nearly three years ago, the Government, with the FA, pledged to match the Premiership's £20m - equating to five per cent of its television deal - every year from 2001 to 2004. The Premier League has paid up each time. The FA has fallen up to £20m behind, due to its declared financial problems, but Peter Lee, the Foundation's chief executive, told the inquiry this summer he was certain they will pay up.

The Government, though, despite Tony Blair himself having pledged the money, provides none directly, but instead shakes up what Lee called "a cocktail of funding" - National Lottery sources, plus a slice of the betting duty levied on the pools. The pools money has dried up, so the Foundation is short of £5m from the Government. A spokesman from the Department for Culture Media and Sport told me this week: "Proposals to meet the shortfall have been made and discussions are continuing." Lee told the inquiry that Caborn had worked "tirelessly" to find the Government's side of the Foundation's funding, but there are serious worries about where he will find the money for the next three years.

Supporters Direct, the other trophy in the Government's football cabinet, has struggled with long delays to this year's £325,000 funding package which is not provided by the Government but comes from the lottery in the shape of the New Opportunities Fund, paid via the Football Foundation. In March, Caborn promised an extra £500,000 to expand Supporters Direct's role to helping clubs in financial crisis, as supporters' trusts have successfully done at Lincoln, York, Bury, Chesterfield and several other clubs. However, this promised new money has still not arrived. The DCMS spokesman said: "The source of the new £500,000 is still under discussion."

The Football League was kept waiting nearly 18 months for £1.5m pledged by the Government as its share of an agreed £10m package to fund clubs' youth development programmes. Again, the other partners paid up, but the Government was late. Clubs faced a shortfall of £21,000 each and some were considering laying off staff. The cash finally arrived only a couple of months ago - and is now wholly provided by Sport England, again through the lottery.

In a nutshell, despite the Government's constantly warm words, the DCMS has a miniscule budget of a little over £12m a year for sport, all of which is swallowed up in particular projects for deprived areas. For everything else, Caborn is left to shuffle round Whitehall looking for lottery pots to dip in.

All of which makes it awkward for the minister to talk seriously to the £1bn Premier League about reform, even if he is inclined to. Scudamore pointed out that football clubs pay £530m annually in tax, mostly vast PAYE bills on outlandish players' salaries. Coward, when asked where he thought the Government fits into football, replied sharply that: "The Government should fit in by funding grass roots facilities adequately." Within football, there is some grumbling about the prospect of the Government being seen to pontificate about the game's ills while the Government has failed to put up money it promised.

Monday's session also revealed the versatility of modern-day spin. Scudamore, asked about tension between the Premiership and the FA, soothed that he "stood shoulder to shoulder with them on many issues." Coward said of the enduring popularity of football that the game can break "the hearts and minds" of a large part of society. Perhaps these phrases, coined post-11 September and for the Iraq war, have passed into the language and it was not distasteful for them to be bandied about in this context. But it also brought home the Government's fondness for spin in football when it cannot find the wherewithal to fund its own promises to sport, or bang football's heads together for the good of the game.