Manchester City finances: Is football set to get a regulator?

We have two national obsessions in Britain. The woes of the National Health Service dominate the front pages. The travails of Manchester City dominate those at the back. Football is a sport like no other, for its global reach and the almost unimaginable sums pouring into it, from individuals, businesses and rich countries. Its governance is struggling to bear the pressures so much money is putting on it.

Manchester City, the club, is accused by the Premier League’s governing body of systematic breaches of the rulebook over many years. City denies the charges. The stakes are so high that a long legal battle, at vast expense to both sides, is promised.

It is unlikely that the rulebook, written before football clubs were valued in billions, will survive the forensic scrutiny of Britain’s finest KCs. Whatever the outcome of the case, the pressure for government intervention is clearly going to be impossible to resist.

So, welcome, then, Ofball, the Office for Fair Football, the VAR referee to oversee what is not so much a game as a rare example of a world-scale British industry. A regulator would allow the government to scramble the ball off the line, but the history of Britain’s regulatory bodies does not inspire confidence in a satisfactory result.

Regulators were seen as the answer to the market power of privatised industries, but in almost every case they have effectively been captured by the operating companies.

The most obvious recent example is Ofgem, which supposedly regulates gas and electricity. Its failure to understand the folly of letting any man and his laptop crash into the market offering cheap energy has been ruinously expensive, as the survivors pick up the pieces of the bankrupt firms and pass the cost to their customers.

Even now, the measures to discourage energy suppliers from using the customers’ money as their working capital are pitifully inadequate. Last month’s exposure of pre-paid meter thuggery has further damaged the regulator.

Next comes Ofwat, which has allowed owners of water companies to extract profits and replace equity with debt, while ensuring that rivers and coasts will remain polluted for decades to come. Thames Water, the biggest company, had so much debt that it could not afford to build the super-sewer now grinding its way under the river. Ofwat is not short of enforcement powers should it care to use them. It is a classic case of regulatory capture.

Some wise counsel might suggest that the government stays off the pitch in this particular game. Unfortunately, the noise from the fans is only likely to get louder as the court case progresses. Something must be done. This is something. Therefore it must be done…

The train now standing…

A brilliant idea to save money on Britain’s finest white elephant, HS2: reduce the speed limit and run fewer trains! Why did nobody think of this before? The limit had already been cut once, from the Cameron fantasy figure which promised arrival in Birmingham almost before you’d had time to open your laptop. Now, apparently, cutting it again would save money on sleepers. Our Dear Chancellor is still promising the trains will run into central London, but of course he will be long gone before Euston is finally abandoned, along with the northern sections of the line. Memo to Rishi: it’s still not too late to cancel this project, where the costs are running away faster than the trains ever will.

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