FOOTBALL CONFERENCE PLEASED WITH FINANCIAL INITIATIVES
Thursday Dec 5, 2013
The Football Conference introduced a system called the 'Financial Initiative' (FI) in 2008/09, with the then primary objective to address the escalating level of club debt, owing to HMRC in respect of PAYE and VAT. Though not always the sole cause of clubs struggling financially, honouring such debt was a major contributory factor in the demise of a number of clubs.
The reality of the situation was the cold fact that 30% of member clubs were in arrears at that time to HMRC amounting to a staggering £1.7m. Besides the FI becoming part of overall financial regulations for member clubs, the rules were upgraded to ensure those who failed to adhere to the overall plan would not benefit by disregarding them or even submitting misleading information. Clubs were required to submit every 3 months their financial position, whereby any clubs failing to do so or presenting misleading information, sanction was available incorporating player embargo and points deductions against clubs failing to meet the standards.
The Board of the Football Conference felt it required new stringent measures to tackle this growing issue, not only to protect the long term interest of the game but the growing frustration of fans.
The Football Conference is therefore pleased to announce since FI was introduced HMRC debt now stands at a mere £80k. Whilst it is a significant reduction, the Football Conference recognises much work remains around other financial areas.
At the 2013 AGM member clubs agreed to a further tightening of rules, mainly in monitoring trading deficits and limiting ways clubs can be funded. The drive was to eliminate "director's loans" and other equity investment. In this respect every club is now required to submit their annual budget for approval by an Independent Financial Panel, having authority to decline a club to play until they are satisfied the club budget is robust to ensure they are able to honour commitments to the competition, safeguard the interests of all member clubs and prove how a shortfall on trading will be managed.
In the first six months of this new initiative alone, overall trading deficits across the membership, has dropped by 30% and the thorny issue of director's loans to clubs reduced by a staggering 80%. As part of the initiative Premier Division clubs are trialling this season those new standards and though North and South Divisions are not compelled to do likewise at this time, they will be included as of next season.
Chairman Brian Lee said "The Board receives updated information from the IFP and we discuss and evaluate the whole system we have adopted with the consent of the clubs. The figures released shows the hard work involved in drafting these new regulations is paying dividends".
"We still recognise we have some way to go but we are demonstrating a collective stance. We never said it would be easy and one of the reasons why we have taken such a stubborn stance is because fans of our member clubs demand their clubs are operated in a financially sensible manner. Alongside that basic principle we have to have a framework of legislation being applied fairly".
"Our long term ambition is to see all our Clubs financially sustainable. The message is clear, in as much we must work together to ensure that relegation and promotion is based solely on what happens on the field rather than off it. It is a battle we shall win and to those who fail to observe financial prudence, not only do you do the game a disservice, you fail to respect your fans and the community in which you play".