Will the Localism Act 2011 really help football fans protect their stadiums?

Published 15 March 2016 By: AnneMaree McDonough

Football_Stadium_to_the_Stands

In recent times, both the front and back pages of the newspapers have contained stories about football fans’ protesting against the rising costs of ticket prices.1 There also seems to be a growing sense that fans who are “the lifeblood of the game2 are being taken for granted by clubs, broadcasters and sponsors alike.

In this context, it is timely to examine how fans have utilised the recently passed Localism Act 2011 (the Act) and whether it operates to give football fans a real say in the future of “their” football stadium or whether it is more of a symbolic device for fans.

 

Background to the Localism Act 2011

The Act was introduced by the Conservative Government as part of its agenda to reduce top down regulation and reintroduce local control for communities and local authorities. Contained within the Act was the statutory framework to allow, “communities the opportunity to take control of assets and facilities in their neighbourhoods by levelling the playing field by providing the time for them to prepare a proposal”,3 when the assets were proposed to be sold by their existing owners.

Together with the Assets of Community Value (England) Regulations 2012, the Act’s provisions create the assets of community value scheme whereby local groups can nominate a building or other land to be listed as an asset of community value by the local authority.

Once listed, the asset remains on the register for 5 years, and the owner must notify the authority if they propose to make certain relevant disposals including selling the freehold or granting or assigning a lease of 25 years or more.

This then triggers a six-week period in which community interest groups can make a written request to be treated as a prospective bidder. If this occurs, then a further four and a half month moratorium occurs in which the owner cannot dispose of the property or enter into a binding contract to do so later.4

The purpose of the in total six-month moratorium from notification of the disposal is to allow the community group to seek the finance to purchase the property. If at the end of the six weeks no community group has requested to be treated as a potential bidder or at the end of the six months the owner is free to dispose of the property.

Once the six-month moratorium has expired then the listed asset can be disposed of during a protected period of 12 months in which the owner may dispose of the asset without any restriction.5 The scheme also makes provision for owners to seek compensation from local authorities where the owner incurs “loss or expense in relation to the land which would be likely not to have been incurred if the land had not been listed.6

 

How is the scheme administered?

The scheme is administered by local authorities who have obligations to administer the nomination schemes, consider the nominations and maintain lists of both assets that have been listed as assets of community value7 and those that have been nominated but where the nomination has been rejected.8

The scheme was originally introduced to allow local communities to bid for assets that the Government recognised as playing an integral role in local life such as “community centres, libraries, swimming pools, village shops, markets or pubs”.9

A June 2014 analysis of the figures for listed assets showed that pubs made up 31% of the listed assets with community centres forming 8% and community shops, library, car park, allotments, school, sports ground or parks forming 3% each of listed assets.10

Following nominations, local authorities must carry out an assessment within 8 weeks as to whether an actual current use is one that furthers the social wellbeing or social interests of the local community. If there is no actual use that is relevant, there can be a consideration of whether there was in the recent past use that furthered the social wellbeing or interests of the local community and if there is a realistic possibility of such a use in the next 5 years.11

Surprisingly there is no definition of what constitutes social wellbeing or social interest, with the act merely citing that social interests include ‘cultural interests; recreational interests; and sporting interests’.12 Other key terms such as the recent past are similarly not defined.

 

Application to supporters and football clubs

For football fans, the legislative scheme has provided an innovative way to recognise the importance of football grounds to a communities’ way of life. Whilst a club itself cannot be nominated, the ground on which that club plays can be nominated and many supporters’ organisations have been quick to utilise this legislation to nominate their team’s home ground.

Whilst the most well known of these listings are those of Anfield,13 Old Trafford14 and St James Park,15 many other supporters groups across the country have also utilised the legislation including the Independent Oxford United Supporters Trust obtaining a listing for The Kassam Stadium,16 the Hull City Supporters Trust obtaining a listing for the KC Stadium,17 and the Leyton Orient Fans Society Limited obtaining a listing for The Matchroom Stadium18 (a listing which is currently the subject of an application for review).19 As at July 2015, Supporters Direct indicated that they had helped 34 groups list their stadiums.20

That football grounds can further the social wellbeing or social interests of the local community has been confirmed in the appeal relating to Kassam Stadium. The successful listing of the Kassam Stadium, where Oxford United played, but which was also the home to London Welsh, was appealed to the First tier Tribunal General Regulatory Chamber. In upholding the nomination on the grounds that it was used to further the wellbeing or social interest of the local community, the Judge noted that:

[t]he existence of a home town club, intrinsically linked to the use of its home ground, fosters community pride, stimulates daily conversations in pubs, work places and online; forges friendships and encourages the mix of generations.21

Supporters’ groups however have seen listings as offering them the means not only to demonstrate the idea of community but also as a mechanism to offer them a greater say in their clubs’ future.

At the time of the nomination of Anfield, the Spirit of Shankly organisation stated that they saw their application as offering:

[an] opportunity for us to actually have a real say in any future sale, and a protection of not only the stadium but protection of the supporters’ right to be involved in the future of their club.22

Interestingly Eric Pickles the Secretary of State for Communities and Local Government and the MP responsible for steering the legislation through parliament said of the Anfield nomination:

Football stadiums are not only the heart and soul of every team, they are rooted in and loved by the neighbourhoods that surround them. Thanks to the new rights we’ve created, today football fans are exercising their community right to keep the beautiful game at their team’s spiritual home by protecting their stadium’s future.23

 

How effective are the powers in reality?

Whilst the Secretary’s description of stadiums as the heart and soul of every team is obviously correct, his view of the impact of his legislation is somewhat misleading and the Spirit of Shankly’s view that it would protect not only the stadium but their right to be involved in the future of the club also appears misplaced.

The reality is that the rights given by the legislation are quite narrow and when applied in the context of a football club and football stadium they are even narrower. The legislative scheme was not designed to, nor does it in practice, offer football fans or supporters’ trusts a way to protect their stadium’s future or keep their club at the local stadium.

At best, it offers them an opportunity to bid for the stadium if it is the subject of a relevant disposal as defined in the legislation. In England, only owners who are charities or trustees are obliged to accept a community bid that is of the same or higher value than another offer.24 Other owners are not even required to negotiate with the community bidder and the legislation certainly does not extend to a community right to buy as is being discussed in Scotland in respect of football clubs and stadiums.25

Indeed as Christopher Cant makes clear, it is possible for owners to game the moratorium period by notifying a disposal and then doing nothing during the six-month period so that they can then conduct an unrestricted sale in the following 12-month protected period.26 Whilst it is unlikely that a football club would so blatantly conduct themselves in this way given the bad publicity such behaviour is likely to attract, there is nothing in the legislation to prevent such a course of action.

Additionally, the legislation will be of no use if a decision has already been taken to relocate the football club and notably there is no formal requirement at present within the top two English league structures for clubs to consult with fans over the relocation of a football club.

Both the Premier League and Football League’s rules provide that written Board consent is required in order for a club to move to a ground other than the one it has registered. Rule K6 of the Premier League Rules and Rule 13.7 of the Football League Regulations and Rules provide that when making the decision as to whether to give consent the board needs to have regard to all relevant circumstances and should not give consent unless that consent:

would be appropriate having in mind the relationship (if any) between the locality with which by its name or otherwise the applicant Club is traditionally associated and that in which such Club proposes to establish its ground

(and)

would not to any material extent adversely affect such Club’s Officials, players, supporters, shareholders, sponsors and others having an interest in its activities.27

The Football League’s rules also provide in Rule 13.8 that a club “must disclose, as soon as practicable, plans and details of any proposed future move to a new stadium.28

Whilst in the interests of avoiding the types of protests recently seen at Liverpool over ticket prices, clubs would normally engage in a consultative exercise, at the end of the day the decision whether to consult rests with the Club. In the Premier League and Football League whilst there are requirements for each club to have a supporter liaison officer29 a customer charter,30 and to have a policy with regard to its stakeholders that provides for consultation with them on a regular basis,31 such requirements are not clearly linked to the requirement to move ground.

This is despite the fact that in 2012, the football authorities indicated that:

[e]ach league will undertake a review of matters on which a Club should be obliged to seek League approval, and the consultation that a Club will be required by the League rules to have carried out with recognised supporter groups in order for a matter to be considered. An example of the type of Club decision on which a Club will have to gain consent, and on which appropriate consultation must have taken place, is a Club moving ground. The Leagues agree that the presumptions should be against proposals to move a ground unless it is in the best interests of the Club. Any decision by the FARA on ground moving would require proof of supporter consultation as per the league requirements.32

The assets of community value scheme also does not capture a sale process that has commenced before an asset is listed (even if the asset becomes listed during the sales process), so supporter’s trusts need to proactively apply for nomination. The number of listings of football grounds since the introduction of the scheme appears to illustrate that supporter’s trust have recognised the need to be proactive in this regard.

Listing a building as an AVC also does not prevent its change of use under permitted development rights or indeed its demolition. Whilst it is likely that the change of use under permitted development rights may be of less relevance to football stadia, planning legislation does not provide that in considering any request for change of use, a listing of community value should be treated as a material consideration. Rather, it is up to individual planning authorities whether they treat the AVC listing as a material consideration.33

 

Potential changes to the scheme

The House of Commons Communities and Local Government Committee has recommended that the Government amend its guidance so that:

ACV listing is a material consideration for local authorities in all planning applications other than those for minor works.34

Similarly the Committee made three other recommendations that would no doubt be useful in the case of football fans and stadiums. One was that the government close the loophole that allowed owners to sell a going concern even if the buyer had no intention of retaining the existing use.

Currently disposals do not need to be notified if they are “a disposal of an estate in land on which a business is conducted and is at the same time, and to the same person, as a disposal of that business as a going concern.35 Whilst this is of particular concern for pubs, one can also see how this could apply to football clubs. If the business being the club is sold then the stadium is merely one of the assets of the club.

Once sold, however the new owner could relocate the team (subject to the approval of the relevant league board) and it would only be if he tried to sell the now empty stadium that the moratorium would kick in, although this would be far too late for supporters. Similarly disposals conducted under bankruptcy or other insolvency proceedings do not need to be notified.

A further change recommended by the Committee was that the moratorium be extended to nine months to allow community groups further time to raise the fund for an asset while they also recommended that those applying for an asset to be listed should have the right of appeal if the listing was turned down. Currently whilst the owner of an asset has the right to appeal a listing, those making the application have no right to challenge the fact that a local authority has refused the listing.

While no doubt these changes would assist supporters’ trusts, they are still insufficient to grant football fans a concrete say in their clubs’ decisions in respect of their ground. That football clubs view a listing as unlikely to have much in the way of practical impact on the operations of a football club can be seen by in the attitude of Manchester United.

When the Manchester United Supporters Trust first nominated Old Trafford, management at Manchester United initially opposed the nomination. On further review they withdraw their opposition stating that they:

do not believe the decision to name Old Trafford, an Asset of Community Value has any meaningful impact on the club. As a result there seemed little point in engaging in a long, drawn-out legal process just to demonstrate a point.36

The statement by Manchester United illustrates that while football fans may have made an innovative use of the legislation to list football stadia, at best the listing can be used as a symbolic tool to garner public support and to pressure the club into engagement with supporters.

Perhaps the chair of the Hull City Supporter’s Trust summed up the impact of the listing best when he said:

Listing the stadium as an Asset of Community Value is of huge symbolic importance. In any discussion over the stadium’s future, the ACV listing serves as a timely reminder that the fans, if much as, if not more than the owners and leaseholders,-have a vested interest in the KC.37

 

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Author

AnneMaree McDonough

AnneMaree McDonough

Annemaree is a consultant at Shepherd & Wedderburn where she works on sports, broadcast and telco issues. She has previously worked in-house for BT and Virgin Media.

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