Impact assessment

Fact sheet - overview

Updated 25 October 2024

Applies to England and Wales

1. Overview

The Football Governance Bill will establish a new independent regulator for English football. The Independent Football Regulator (IFR)’s core purpose will be to improve financial sustainability of clubs, ensure financial resilience across the leagues, and safeguard the heritage of English football. In line with this, it will have powers to operate a licensing regime, and to monitor and enforce compliance with requirements on financial regulation, club ownership and directors, fan engagement and club heritage protection. The IFR will set corporate governance standards and have the power to prohibit clubs from joining competitions where they are not fair and meritocratic and would threaten the heritage and sustainability of English football. The IFR will also have backstop powers to intervene as a last resort to bring about a solution on financial redistribution between the football leagues.

The Bill is generally in line with the Bill introduced in March 2024 by the previous government. However some key changes have been made to strengthen some of the measures. These changes are outlined in the subsequent factsheet Changes from the previous Football Governance Bill.

The IFR will have no role in sporting rules or ‘on-pitch’ matters, nor will it micromanage commercial decisions made by clubs. The IFR will also have explicit statutory duties encouraging it to, so far as possible, avoid impacts on sporting competitiveness as well as adverse impacts on the competitiveness of clubs and on financial investment in English football.

The IFR’s statutory regulatory principles include it acting proportionately balancing a club’s specific circumstances and the issue the IFR is seeking to address. The principles will also encourage the IFR to, wherever possible, work with the football industry when it exercises its functions and have due regard to existing industry processes and league rules. These provisions will help to ensure a coherent and effective regulatory regime, minimising regulatory overlap and burden.

2. What the Football Governance Bill and the Independent Football Regulator will do

The legislation will strengthen the governance and financial resilience of football clubs and the link between clubs and their fans. The legislation will do this by:

• Establishing a new independent regulator. The IFR will operate a licensing system, where all clubs in scope will need a licence to operate. The intended scope (to be established by secondary legislation) is all clubs in the top five tiers of men’s English football.

• Creating a new owners’ and directors’ test to make sure club custodians are suitable. 

• Introducing targeted, forward-looking financial sustainability regulation to improve the financial resilience of individual clubs and the system more broadly.  

• Setting a minimum standard of fan engagement and requiring clubs to comply with club heritage protections.

• Requiring clubs to seek IFR pre-approval for any sale or relocation of their stadium. 

• Preventing English clubs from joining prohibited leagues that do not have the support of the fans, or that threaten the heritage or sustainability of English football.

• Giving the IFR targeted backstop powers to intervene in financial distributions as a last resort (subject to certain thresholds being met), to ensure financial sustainability. 

• Establishing a new corporate governance code specific to football clubs, requiring clubs to report at specified intervals on how they apply the principles of the Code and explain why this is suitable to their individual circumstances.

• Requiring the IFR to periodically prepare and publish a ‘State of Game’ report, which will act as a market study for football and provide the IFR with a key evidence base.

3. Approach to regulation

English football is a major global success story, with fans benefitting from watching some of the world’s best players play in England every week. This success has been fuelled by investment that has improved the quality of football and the competitiveness of our clubs on the world stage. This is why the IFR will seek to avoid adverse impacts on financial investment in English football or on club competitiveness, and seek to avoid impacts on sporting outcomes in general. 

The regulatory regime has been designed to be proportionate and, as such, the IFR should not adopt a ‘one size fits all’ approach. Instead, it should tailor any intervention to the specific circumstances and risks a club faces and, in so doing, avoid placing unnecessary regulatory burdens on clubs that are already well-run or low-risk club may meet the IFR’s required standards threshold requirements and mandatory conditions naturally, for instance through complying with a competition organiser’s rules, in which case regulatory intervention would not be needed. For example, while clubs will be required to meet minimum standards of engagement with fans, there will be flexibility for clubs in how this is achieved. It is likely that for many clubs who are already engaging adequately and effectively with their fans, no change will be required.

4. Scope of the regulatory regime

The regime is intended to cover clubs in the top five tiers of English men’s football only. The Bill requires that only clubs competing in competitions specified by the Secretary of State in secondary legislation will need a licence. At present, the intention is that the Secretary of State will specify only the Premier League; EFL Championship, League One and League Two; and the National League.