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Written evidence submitted by the Union

SPORT IN OUR COMMUNITIES – UNION RESPONSE TO DCMS SELECT COMMITTEE INQUIRY

ORGANISATIONAL SUMMARY

The (RFU) is the governing body for in . Across England there are four million people enjoying rugby, 500,000 regular players with more than 100,000 volunteers in almost 2,000 clubs. All profit made by the RFU is invested back into the community and the men’s and women’s England age grade and senior . This written submission details the governance of and how the future of the community game can be secured.

1. ARE CURRENT GOVERNANCE MODELS FIT FOR PURPOSE?

The RFU has a co-operative structure. Rather than being a company, it is a society registered under the Co-operative and Community Benefit Societies Act, meaning that it is a members’ organisation. The membership is predominantly rugby clubs, both professional and amateur.

The Board has responsibility for the strategic direction of the RFU, and has the authority to exercise all executive functions other than clearly specified powers which are reserved to Council or the members. The Board is designed to be a combination of representatives of the game elected from the RFU Council, together with executive staff and independent non-executive directors. Directors are appointed through a rigorous skills based selection process to ensure the right combination of skills, experience and knowledge. With the exception of executive staff, all Board members are subject to limits the time they can serve on the Board as set out in the RFU’s Rules.

The RFU Council has a dual role of driving policy relating to the regulatory control of the game and monitoring and oversight of the Board, which it fulfils on behalf of the RFU’s members. The Council is made up of representatives appointed by member clubs (largely on a geographic basis through Constituent Bodies), those appointed by the national representative bodies (such as or the Rugby Players’ Association), and some ex officio and co-opted members.

The England Governance Code also sets out the levels of transparency, accountability and financial integrity that are required from those in receipt of government and National Lottery funding. During the year 2019/2020 the RFU received ‘Outstanding’ and ‘Good’ ratings from Sport England’s annual audit of our financial control and governance. In line with good governance practice, we conduct a three-yearly independent review into the effectiveness of the Board which concluded that it is operating effectively and we have ensured that the recommendations we received are being actioned.

Diversity and Inclusion are key priorities for the RFU with an action plan agreed and implementation group in place to sponsor and support change across the organisation. Additionally, a Board level strategic review is underway looking at Board and Executive level policy in this area. The RFU Board has made a new commitment to achieving a Board composition of 30% female and 15% BAME members by 1 August 2022 at the latest. In terms of our member clubs, the RFU provides governance support via a mixture of regulation and education. In this regard detailed information is made available for clubs to use and adopt supported by workshops, webinars and dedicated helplines in a number of key areas covering structure and tax, leadership and direction and policies and procedures underpinned by the RFU’s core values.

2. AT WHAT LEVEL OF SPORT SHOULD THE GOVERNMENT CONSIDER SPENDING PUBLIC MONEY?

The social and economic value of sport is significant, with the Sport Industry Research Centre at Sheffield Hallam University calculating that for every £1 spent on community sport and physical activity nearly £4 is generated, with an annual contribution to social value alone of more than £72 bn. Crucial to this social impact are the national initiatives put in place by governing bodies such as the RFU, as these ensure the benefit of sport is multiplied and felt across all parts of the country and in all sectors of society.

Unlike most other sports, Rugby Union continues to sustain overall participation with specific growth in the women’s game. To date, this is due to both the work of our clubs and national participation initiatives run by the RFU such as Inner Warrior, a programme aimed at introducing women to rugby. However, Covid-19 has significantly impacted both the RFU and clubs’ ability to generate income. Without financial support from government in the short to medium term the RFU’s investment in community programmes will be significantly curtailed.

Additionally, Sport England funding is vital to improving the health and wellbeing of the nation and provides a significant return on investment. The RFU receives both core funding and additional project funding via the Families Fund. Core funding allows us to invest in player retention initiatives, Rugby, Sevens and women and girls talent development. In addition, the Families Fund, enables the RFU to explore ways to improve access to sport for families from lower socio-economic groups, reach new communities and open up opportunities to all. Community sport funding via Sport England, particularly in this challenging time, is vital.

Lastly, school sport is also critical to the long-term viability of both the community and elite game and is an area where Government has a significant role to play. Studies show the importance of getting young people involved in sport and activity at an early age and how this sets habits for life. From a policy perspective, the Government should commit to an hour included in the school day for physical activity and embed PE delivery in teacher training. The RFU’s 2015 World Cup legacy initiative, All Schools, resulted in 750 additional state schools across the country having rugby programmes. This demonstrates the impact that long term support for school sport can have on a generation of children.

3. WHAT ARE THE BIGGEST RISKS TO THE LONG-TERM VIABILITY OF GRASSROOTS SPORT?

Currently, the biggest risk to the long-term viability of grassroots sport is the pandemic, its economic impact and the potential loss of a generation of players.

Community rugby clubs are largely asset owning. In normal times this provides security and the ability to be self-sufficient, generating revenue through membership fees, match day revenue (food, beverage and tickets) and income from diversification into events and community services. However, the pandemic has shown that these clubs are also more at risk of external crisis depriving them of revenue to cover fixed costs. Covid-19 has severely impacted all clubs’ ability to generate revenue and without financial support we risk losing some for good. Most rugby clubs’ assets were gifted to clubs several generations ago and if clubs are forced to close and sell up, it will have an impact on rugby and communities for many years to come.

In the short term, we require a clear roadmap for the return of community contact rugby. The RFU has been working with government on gaining approval for our proposed roadmap and this needs to be in place, alongside other team sports, for when the current lockdown is over. Once we can get rugby being played again, clubs will have the opportunity to generate revenue and start to support their own recovery. However, the risk for community clubs is not only financial. Sport England’s Active Lives Survey has already shown the effect of Covid-19 on participation and team sports are set to suffer further as a result of the second lockdown. Ensuring the long-term viability of grassroots sport will also require a plan to boost post-pandemic participation and convince people to once again take up sport.

Whilst short to medium term financial support is vital for clubs’ survival, facilities investment is fundamental to our clubs’ long-term security. Government has recognised the importance of investing in facilities and has pledged to invest nationally in a multisport approach. Done correctly, this could facilitate a national network of resilient community hubs, allowing access to a number of sports in one location. Not only opening up opportunities in communities but also providing long term stability for smaller and less financially robust sports. This is critical as we seek to further diversify our participation base with the adaption of facilities, which were largely developed for men, to cater for all.

However, investment must be based on accurate mapping, be appropriately targeted and be subject to proper scrutiny. There are a number of examples of funding going to large organisations to invest in multi-sport facilities, where rugby clubs have been removed from the sites at little notice, refused use at peak times and more often than not, the club returns to a single sport facility relatively quickly. With rugby clubs generally owning their premises, they have the ability to provide long term security to other sports through multi-sport investment. There is no doubt that multi-sport has the opportunity to transform sport provision, but it is imperative that any such investment is well planned and executed.

Lastly, the RFU and spectator sports, need a clear roadmap for the return of fans to . The sooner we can start generating revenue at pre-pandemic levels, the sooner our recovery can begin and the sooner we can start supporting rugby again.

4. WHAT KEY MEASURES COULD THE GOVERNMENT INTRODUCE TO INCREASE THE RESILIENCE OF SPORTS CLUBS AND VENUES?

A sports recovery fund to:

 Ensure short term survival of community clubs – if clubs are lost so are their facilities and the services they provide to their local communities.  Support preparation for re-opening and welcoming back players to ensure participation numbers can recover.  Ensure the RFU as an NGB has the funds needed to continue to run nationwide participation programmes. Without financial support from government the RFU’s ability to protect and invest in community sport will be significantly curtailed. Return to play roadmap:

 It is vital that Rugby Union (and other team sports) have a clear roadmap for their return after lockdown. Additionally, the RFU has a clear plan for the return of competitive contact rugby, something that we are still seeking approval to from government. Hosting matches and festivals is central not only to clubs’ financial recovery but also to maintaining and growing participation.  Furthermore, the important role that sport plays in the nation’s health should be recognised in any further lockdown plans or planning related to team sports and a tiered approach to restrictions.

Facilities investment:

 As detailed in question three, in the medium to long term it is facilities investment that can help provide financial security. With most of our clubs being asset owning, their business models rely on using their facilities to generate income. In the majority of cases, this business model means clubs, in normal times, are self-sufficient.  Furthermore, a larger number of up to date facilities nationwide will give more people access to sport, including rugby.

School Sport:

 As detailed in question three, the Government should commit to an hour included in the school day for physical activity and embed PE delivery in teacher training.  Not only does sport in school have significant benefits to health and educational attainment, but it is fundamental to maintaining a player pipeline to support community clubs.

Regulatory and policy change including:

 VAT reduction to 5% for sports and leisure activities to match that given to culture and hospitality. This would assist with current sales including competition entry fees, sporting merchandise, memberships and tickets.  A business rates holiday for a further year for community clubs. Currently, the next set of business rates are due to be paid before clubs will have had an opportunity to generate any meaningful income.

5. TO WHAT EXTENT SHOULD ELITE SUPPORT THE LOWER LEAGUES AND GRASSROOTS?

As previously stated, the RFU re-invests all its profit back into the game. Senior England men’s matches at currently generate approximately 90% of the RFU’s revenue. As detailed in the RFU’s 2019/20 Annual Report, our total revenue was £167m, and our profit before rugby investment £83.9m. £28.3m was invested into the community game. In the four years preceding this, which were unaffected by Covid-19, investment in the community game exceeded £34m per annum (2015/16: £34.1m, 2016/17: £35.9m, 2017/18: £37.0m; 2018/19: £34.9m). Without income from the elite game we would not be able to invest in the grassroots to the extent that we do. To note, this is why the impact of no fans in stadiums has had such a profound impact on the RFU’s finances. To note, Premiership Rugby is a separate organisation to the RFU and their contribution is not covered in our answers.

6. HOW SHOULD THE GOVERNMENT MAKE THIS HAPPEN?

As stated previously, the Rugby Football Union relies on revenue from the elite professional game to support the grassroots. Therefore, in our case, we do not believe government needs to take any further action.