Clause 33 - Duties to notify IFR of change in circumstances relating to incumbent owner or officer

Football Governance Bill – in a Public Bill Committee am 2:00 pm ar 21 Mai 2024.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Question proposed, That the clause stand part of the Bill.

Photo of Stuart Andrew Stuart Andrew Assistant Whip, Parliamentary Under Secretary of State (Department for Culture, Media and Sport), Parliamentary Under Secretary of State (Department for Business and Trade) (Minister for Equalities)

It is important for clubs’ sustainability that their incumbent owners and officers continue to be suitable. That is why the Bill gives the regulator the power to test incumbents if it has grounds for concern about their suitability, to mitigate the risk of harm from individuals already in the system. To do so it needs to be aware of any material change in the circumstances of incumbent owners and officers that is relevant to their suitability.

The clause therefore places a duty on incumbent owners and officers, as well as regulated clubs, to notify the regulator when they consider there has been, or may have been, a material change in circumstances that is relevant to whether the individual is suitable to be an owner or officer of the club. For example, if an officer became subject to criminal or relevant civil proceedings that the regulator was not previously aware of, that would constitute a material change in circumstances.

The notification must include certain matters listed in subsection (3), including an explanation of the material change in circumstances and why it is relevant to whether the owner or officer in question is suitable. If that information gives the regulator grounds for concern about the incumbent’s suitability, it can test them using the powers in clauses 34 and 35. If they are determined to be unsuitable, the regulator has a strong suite of powers to remove them. By ensuring that the regulator is aware of relevant material changes, we will better enable it to ensure that incumbent owners and officers continue to be suitable.

Photo of Stephanie Peacock Stephanie Peacock Shadow Minister (Digital, Culture, Media and Sport)

The clause mirrors the notification requirements for prospective owners and officers, requiring incumbent owners and officers to go through the same process of notifying the regulator in the event of a material change that might affect their suitability. This is an important provision that will ensure that owners and directors cannot circumvent the standards set out in the tests after their appointment. I certainly think it is the intention that the tests should act as the beginning of an ongoing compliance with the standards by owners and clubs, rather than the end.

If an owner or officer becomes subject to criminal proceedings, or new information comes to light about a criminal source of their wealth, it is only right that their suitability should be reviewed by the regulator. For example, the owner and chairman of Fleetwood Town FC was recently found guilty of defrauding creditors, false representation and being concerned with the retention of criminal property. The multimillion-pound fraud operation, which duped firms into expensive energy contracts, earned him jail time amounting to 13 years. Of course, in that case, Mr Pilley resigned following his conviction.

Each individual circumstance will have to be reviewed in full by the regulator, which will have access to much more of the relevant information. However, that case hopefully helps to demonstrate the point that an owner’s ability to pass eligibility tests has the potential to change over time. The fan-led review initially recommended:

“Any existing owner should re-pass the test on a three year review.”

It suggested that reviews should take place on a staggered basis, with the highest-risk clubs and owners being prioritised, so that one third of clubs were subject to review in any one year.

The Government have responded in a sensible way to the recommendation, taking its intention to ensure ongoing compliance and adapting it so that action can be taken immediately if there is new cause for concern, while clubs that are running well and have sound ownership can be left without intervention. Of course, the caveat is that the clause relies on clubs and owners to comply with the duty to notify the regulator of material changes. That brings us back to the argument I made earlier in emphasising just how important it is that “material change” is well defined and understood by all involved.

I hope that guidance can play a role in making it abundantly clear what circumstances might trigger a need to notify the regulator. Overall, I am pleased to welcome the clause for many of the same reasons I have welcomed this part of the Bill in general: that it is right that we ensure the integrity of the custodians of our football clubs across the board.

Question put and agreed to.

Clause 33 accordingly ordered to stand part of the Bill.