ANNEX C : POSSIBLE REGULATORY MODELS
Introduction
Six different types of regulatory model are described briefly below, with a bullet point critique of each. The first five of these have been created somewhere in the UK previously - the last is a very outline description of a “non-Parliamentary” option should one be needed.
They are described in what BST considers to be a descending order of suitability / applicability to the football environment, and all opinions expressed are ours and ours alone.
In assessing each, it should be borne in mind that Ms. Crouch has been clear in stipulating that the final body chosen should :
• be politically independent : of Government, and of vested interests in the game…
• … yet also retain strong links and “buy in” from Parliament as a whole
• be staffed by specialists who understand the complex business environment that English football is part of
• have previously agreed, guaranteed sources of the funding needed to do its job
• report regularly and publicly on general issues of public interest as well as upon individual cases
• promote good practice, as well as dealing robustly with the bad
• report objectively on its own performance
The Models
1. Non-Ministerial Departments
• usually have no political oversight
• usually headed by a senior civil servant
• often regulatory or inspection bodies…..
• …. legal status therefore chosen to offer protection from political interference
• accountable to Parliament and the Courts
• funding usually comes from Treasury (rather than sponsoring Department), plus a levy or fees paid by regulated bodies
Example : OFWAT, OFGEM
Pros :
• strong degree of autonomy
• strong precedents for the regulatory function
• mixed funding regime
• strong accountability mechanisms
• status in law confers weight
Cons :
• mixed funding regime will put spotlight on value for money
• lacks Ministerial clout if headed at official level
2. Non-Departmental Public Bodies (NDPBs)
• part of national Government, but not part of any Government Department
• enjoy a large degree of operational independence….
• …. but usually have a sponsor Minister accountable to Parliament on key metrics such as independence, efficiency and effectiveness
• accountable to Parliament and the Courts
• usually operate under Statute , offering some continuity of funding
Example : Health & Safety Executive
Pros :
• strong degree of autonomy
• if headed by Minister, has political clout
• strong accountability mechanisms
• well designed performance metrics would promote effective working
• status in law confers weight
Cons :
• statutory basis can create rigidity
• statutory basis can inhibit innovation
3. Statutory Corporation
• corporations created by statute, by Government
• usually owned in whole or part by Government
• other shareholders possible, but not typical
• powers to act set out in statute
• often created for bespoke purposes (e.g. Olympic Delivery Authority, National Coal Board)
• managerially autonomous, but answerable to Parliament and the Courts
• designed to be self funding, but working capital usually derived from Government, and can borrow money or seek Government assistance
Example : OFCOM
Pros :
• bespoke, therefore can be tailored to a specific purpose
• flexible arrangements around funding can promote innovation
• good degree of autonomy - usually
• backed by statute
Cons :
• strong reliance on Government may make the body vulnerable to political interference
• statutory and bespoke basis can inhibit ability to adapt to changed circumstance
4. Company Limited By Guarantee
• funded by Members acting as guarantors
• usually operate on a charity or “not for profit” basis
• profits usually re-invested, rather than distributed as dividends
• operate in similar manner to Companies Limited by Shares
Example : Financial Conduct Authority
Pros :
• can operate on a mutually beneficial basis to suit guarantors
• provides for re-investment of income
• liabilities controlled via legal status
Cons :
• autonomy very limited
• can create considerable conflicts of interest if accompanied by regulatory function
• little external scrutiny by Parliament
• strong possibility of interference by vested interests
• not the radical break envisaged
5. Public Corporation
• can be created or controlled by central or local government
• usually also a “market body”, deriving income from sale of goods & services
• substantial operational independence
Example : Civil Aviation Authority
Pros :
• good accountability to Parliament
• good degree of autonomy
• can be partially or wholly self-financing, in certain circumstances
Cons :
• not usually suitable for a body which is expected to perform a regulatory function
• cannot easily secure subsidy or other Governmental finance….
• …. therefore vulnerable in difficult economic climates
6. Bespoke, non Parliamentary Body
This option would need to be worked up, but might be :
• accountable to a Stakeholder Board drawn from across the Industry, including supporters groups
• funded by stakeholders on the Board
• have a range of regulatory/scrutiny/reporting functions agreed with the Stakeholder Board
• draw funding from existing resources allocated to a similar purpose
Pros :
• does not require legislation
• can be flexibly drawn and created quickly
• can minimise disruption in transition from current arrangements to new
• would probably encounter limited resistance from otherwise hostile quarters
Cons :
• dilutes the role and influence of supporters
• funding arrangements inhibit challenge and innovation
• accountability mechanisms weak
• would make supporter groups in part responsible for funding or other managerial support
• too much like current, discredited arrangements