Written evidence submitted by the Sport and Recreation Alliance

1. Introduction

1.1 – The Sport and Recreation Alliance

The Sport and Recreation Alliance is the umbrella organisation for the governing and representative bodies of sport and recreation. We have a diverse membership of more than 300 national and local organisations across the sector.[1]

As the voice of the sector, the Alliance works with government, policy makers and the media to make sure grassroots sport and recreation grows and thrives. Having an active nation is important as it delivers huge benefits to society and the millions of participants, volunteers, staff and spectators who participate in it.

The Committee’s inquiry covers three areas and we will be looking to comment on all three. However, given the nature of the Alliance and its membership the bulk of our comments will focus on the current state of grassroots sport and physical activity and what the future is likely to be for our clubs up and down the country.

The Alliance is working on pulling together more full evidence on the future of sport and physical activity and would appreciate the chance to furnish the committee in an oral evidence session.

1.2 - Summary of Key Points

• Grassroots sport and physical activity faces huge challenges as a result of the pandemic. Clubs are facing huge shortfalls in their finances and a consequent drop off in activity has seen grassroots sport in many cases looking at a crisis of existence. Furthermore, facilities being closed has led to far few people being physically active, which poses a threat to long-term participation and subsequently to both the mental and physical health of people across the UK.
• The government must facilitate a scenario in which the sport and physical activity sector can survive and build back better. This would be best done through a Sports Recovery Fund akin to that created through the Culture Recovery Fund. This would include money to ensure that facilities can open and continue operationally in the coming months and protect those elements of grassroots community sport at risk of permanent loss.
• In addition to a dedicated Sports Recovery Fund, government should look at using a range of broader policy levers to support the sector including:

      VAT reduction to 5% in line with that awarded to the hospitality sector

      Introduction of a mechanism to ensure a fair return to sport from gambling

      Reforms to tax and giving rules and the CASC scheme to broaden its appeal and impact.

      Further reforms to the system of Business Rates to support community clubs.

2. Are current sports governance models fit for purpose?

While we recognise that there remains room for improvement in sports governance, we believe significant steps have been taken in recent years to address many of the most pressing problems.

The introduction of the Code for Sports Governance has been a significant factor. Following the Code’s introduction in 2016, all funded governing bodies are compliant meaning the board is the ultimate decision-making body, directors have term limits, the board size must be restricted to a maximum of 12, all organisations have at least 30% of each gender on the board and at least 25% of directors must be independent.

Likewise, the Alliance’s own Principles of Good Governance and provision of tailored support to the sector continues to drive improvement, particularly amongst the broader community of sport and recreation organisations which do not benefit from public funding and which are therefore not required to comply with the Code for Sports Governance.[2]

The Alliance’s study of the impact of both the Code and the Principles demonstrates that the sector has embraced the governance challenge and is now on a much more sustainable path.[3] However, we recognise there is still much to be done – particularly with respect to equality, diversity and inclusion – and welcome the recent announcement by Sport and England and UK Sport to further review the requirements of Code in these areas.[4]

3. What are the biggest risks to the long-term viability of grassroots sport?

While the sector was able to re-open slowly from late May, not all facilities have done so and participation remains lower than pre-pandemic levels. Figures from Sport England reveal that the number of adults doing five days per week of exercise has fallen by 9% since March from 33% to 24%.[5] These drops in activity are particularly prevalent among women, black, Asian and minority ethnic people, those from lower socio-economic backgrounds and disabled people.

While we are still in the middle of the current lockdown, it is hard to tell what the precise long-term effect on the sector’s finances and participation will be but the complete cessation of grassroots sport and physical activity again in November will likely have a profound effect beyond what can be evidenced here. However, following on from our evidence in the Spring, we have included some updates on the current status of the sector:

• The sector is effectively unable to operate at present and in view of the likelihood of ongoing restrictions, the government should be clearer about the trade-offs between suppressing the virus and keeping venues open and people active.

Following the Spring lockdown the sector was able to reopen slowly from May with outdoor sports like golf and tennis being among the first activities permitted again. Some areas of the sector however, were harder hit with gyms, leisure centres and swimming pools remaining closed into July. Indeed, some 200 swimming pools were unable to reopen at all between the spring lockdown and the November lockdown and remain closed[6].

Those that were able to reopen had to do so with social distancing and other extra Covid-19 protocols in place and the changing nature of the virus and of the government’s response to it means that sports organisations have had to adapt often at short notice and with increased expense in order to make venues and activities COVID secure. It is likely that these additional COVID-related costs are likely to persist until such time as the virus is able to be controlled through other means e.g. vaccination.

Communicating and understanding these changes has proved difficult and the tiered approach in particular created confusion, notably where sports facilities in some Tier 3 areas were allowed to remain open while in other Tier 3 areas they were forced to close.

The November lockdown has seen the sector shutdown completely at the grassroots level again. This is despite campaigns from sports including golf and tennis to stay open as they felt they could operate in a COVID secure way.

Given the likelihood of continued restrictions for some time to come and the possibility that some venues and organisations may cease to operate completely, the government must be clearer about how it is trading off measures to suppress the virus against the short- and long-term impact on organisations within the sector and the health and wellbeing of the population more broadly.

• The financial impact of the current restrictions remains severe and is being felt at all levels of the sporting pyramid

As sport was slowly allowed to return, the increased costs of making venues COVID secure and the drop off in revenue caused by a lack of normal capacity due to social distancing in many cases entrenched the financial difficulties already faced from three months of closure. Many organisations and clubs were not able to replenish revenues fully and, in some cases, did not have the finances to be able to open securely.

The impact on elite sport means that less money will be available for reinvestment into the lower pyramid of sport. Some of the country’s largest governing bodies reinvest over 30% of their net broadcast income into the grassroots under the Alliance’s Voluntary Code on Broadcasting.[7] In the most recent year, reinvestment under the Code totalled £163m.[8] While we have subsequently seen broadcast elite sport return, the financial impact in terms of reduced broadcast, ticketing and commercial income has been severe and it is clear that maintaining reinvestment at these levels will almost certainly not be possible in the coming years.

Finally, from a workforce perspective the sector supports almost 100,000 self-employed workers, many of whom coach, teach and instruct and whose livelihoods are now in jeopardy.[9] With reduced capacity, participation and the lack of available venues, many have been unable to earn a regular income and research by CIMSPA shows that 60% have no financial reserves and face substantial losses.[10] These impacts will be exacerbated given that government support for the self-employed is limited. In the wider workforce too, 39% staff were furloughed at some point with a further 20% having their hours reduced.[11] A number of major sports governing bodies have already announced plans to reduce staff and restructure their operations which will have long-term implications for their respective sports. The new lockdown and government delays in announcing the extension of the furlough may well result in further job losses in the sector.

• The support provided by Government and its arm’s length bodies, notably Sport England, is welcome but further work is needed to ensure it is available to all who need it and that it sustains the sector for long enough to return to normal activity.

The business support and funding schemes in place are helpful but there remain gaps in coverage, particularly for non-facility owning grassroots organisations, and challenges in accessing the support.

Sport England has made a number of funds available to grassroots sports clubs, most notably through the Community Emergency Fund, which totalled £210 million.[12]

The money has been warmly welcomed and this money has been hugely helpful, but there are approximately 150,000 grassroots sports clubs across the country and many of them have not been able to access this funding. For them, government support schemes have been the only help and in some cases these have not benefitted the full breadth of the sector. Looking at some of the issues briefly:

• The coverage of the employment support schemes does not help all of those in the sector who need it. In particular, the SEISS doesn’t support those who have become self-employed within the last year or who work part-time alongside other employment such that their self-employed earnings are less than 50% of their total earnings.

Even in full-time coaching money is usually tight. In speaking to the APPG for Sport (which the Alliance supports) in the Summer, Mel Marshall, who is coach to Adam Peaty explained that in the early days of her coaching career she was earning £14,500 per year as a swimming coach.[13]

• Many community leisure operators have not been able to access the various government support packages due to their organisational structure and scheme requirements.[14] Leisure trusts are at particular risk because they are charities, societies or community interest companies and so do not distribute profit – many also have limited reserves.[15]
• Not all facility owning grassroots clubs and sports organisations are eligible for the Retail, Hospitality and Leisure (RHL) grants due to having a rateable value over £51,000. While almost a fifth of grassroots clubs are facility owning many will not receive this support.[16] This is likely to be the case for clubs which have larger site footprints and/or operate in equipment-heavy sports e.g. golf, sailing etc. As such, many clubs facing the same financial struggles as organisations which meet the scheme requirements are not eligible for support.
• Finally, there is a concern that RHL grants and others made available through the government’s broader COVID support schemes are taxable. This could impose additional and unforeseen tax liabilities and reporting burdens for volunteer-run grassroots clubs, many of whom will continue to be operating in a very constrained financial environment for some time to come. 

• The impact on participation – both in the short- and long-term – is at best uncertain.

Previously, Sport England reported that 39% fewer adults and 37% fewer children participated in sport and physical activity in a given week during lockdown than they had previously.

This has subsequently been borne out in the latest available figures which show that some 3 million less people are active. Indeed, in Sport England’s Active Lives assessment of the coronavirus pandemic they said:

“During the mid-March to mid-May period, the number of active adults fell by 7.1%, or just over 3 million, whilst inactivity levels rose by 7.4% or 3.4million adults.[17]”

We face losing a generation of sport and physical activity in this country if more is not done to promote and increase participation to the record levels it was at before the pandemic. Long-term and lifelong changes in participation levels will have a profound effect on the lives of people up and down the country. Sport is crucial for people’s mental and physical wellbeing and it is increasingly concerning that we are moving towards a mental health crisis in this country.

Sport also contributes hugely to the economy. A recent study by Sheffield Hallam in Partnership with Sport England explained that for every £1 of government investment the return is £3.91 to the public purse in saving across healthcare, crime and social care among other things[18].

The government should be looking to protect the sector now through a Sports Recovery Fund or face putting much of this social and economic benefit at risk.

3.1  Case Study – England Boxing and Boxing Clubs

The problems facing the sector are widespread and cover the full range of sport and physical activity in the Sport and Recreation Alliance’s membership.

England Boxing (members of the Sport and Recreation Alliance) has 980 clubs affiliated to it as an NGB. Very few of these are facility owning clubs but rather they rent their boxing club space from landlords in community halls, leisure centers and churches. During the initial lockdown these clubs faced a total cessation of activity and were not able to raise their usual fees, only raising some nominal subscriptions from junior boxers.

Following the opening up of restrictions, boxing clubs were able to start operating albeit with social distancing in place. This meant that clubs could only operate with a much smaller number of members allowed in venues at any one time leading to lower subscriptions when bills and rent still needed to be paid.

As a result, England Boxing reported that a number of clubs have had to access various grants. The bulk of these were grants that were made available via Sport England, but a number of clubs also took advantages of government grant schemes. England Boxing can account for £7.5M of grants between the April-September period.

In explaining the challenges Boxing has faced this year they said:

‘This money is really appreciated but without a return to normal footfall clubs will need another round of grants early in 2021.

Clubs shutting obviously stopped physical activity for thousands of members, but the mental impact is also enormous and harder to measure. All government stats say that the pandemic has a harder impact in areas of deprivation and it is that space that boxing clubs occupy. 40% of boxing clubs are in the top 20% of IMD[19], whilst football occupies 16% and tennis 2%.’[20]

One of those clubs is Ludus Magnus Boxing Club in Doncaster. The club was faced with the threat of closure at the start of the pandemic. As a small club in one of the most deprived areas of the country it struggled with the cost of reopening once the first lockdown was finished. They were required to make their boxing gym Covid-19 safe and the increased cost of cleaning and the equipment required saw them struggling to survive. Fortunately, England Boxing helped them apply for a financial grant from Sport England’s Tackling Inequality Fund allowing them to stay open.

However, they are now shut again and like many clubs the next period of lockdown could see them shut for good as they will not be able to pay rent and bills. That’s why it is crucial that help is found for them and for the thousands of clubs across the sector who need ongoing support in order to survive.

4. What key measures could the government introduce to increase the resilience of sports clubs and facilities.

4.1  – Introduction

The sector faces a huge number of challenges in both the immediate and more long-term future. There are a number of existing and indeed new measures that the sector could facilitate that could help, but it is vital that this is underpinned by government support in the immediate term so that the sector is robust enough to be able to make those changes.

4.2  – Policy Recommendations

• Create a Sports Recovery Fund - The government should urgently support the sector with a Sports Recovery Fund, similar to their recently announced Culture Recovery Fund. This money could then be distributed in the form of grants or loans to clubs and facilities across the country and would allow community sport to build back better through further funding for Return to Play. It would also help targeted investment in facilities including clubs and public leisure facilities, particularly in hard to reach communities.

Following this there are a number of mechanisms that the committee could recommend to government including:

• VAT reduction to 5% for sports and leisure activities including the sale of tickets to sporting events – This would bring the sport sector into line with other sectors that faced full closure during both lockdowns in particular the hospitality and culture sectors. It would aid cashflow for clubs across the sporting pyramid and NGBs, in particular by enabling them to sell tickets for future events even if fans cannot currently attend.
• Reform the tax and giving rules to better support grassroots sport– Government should consider introducing the following measures:
• Extend Gift Aid to member subscriptions to registered Community Amateur Sports Clubs (CASCs) and sports club charities. Such a reform would simplify the current regime, increase take up of Gift Aid by existing clubs and increase the attractiveness of the CASC scheme, particularly for non-facility owning clubs.  Extension of Gift Aid in this way could also be supplemented by a temporary increase in Gift Aid through a Gift Aid Emergency Relief as advocated for by the charity sector.[21]
• Extend the business rates holiday for Retail, Hospitality and Leisure for 2021/22 and introduce more fundamental reforms to business rates including a minimum mandatory relief for community sports clubs and venues used for sport and recreation.
• Introduce enhanced corporation tax relief to incentivise more investment in grassroots community sport (and potentially women’s sport). This could be modelled on the existing creative industries tax reliefs and would put the sport sector on a similar tax footing to other DCMS sectors.
• Protect and Promote Local Sports Facilities in the Planning System – The government should ensure that in its legislation following the Planning for the Future White Paper there is a statutory duty on local authorities to protect and promote sports facilities. Changes to the planning system including to both Section 106 and the Community Infrastructure Levy should consider the importance of maintaining and upholding local authority leisure provision including leisure centres and community halls. The government should also consider strengthening the Localism Act 2011 to promote the wider use of the Assets of Community Value scheme in relation to community sport facilities. It is worth remembering that sport and physical activity takes place in a number of different types of facility across the country. Our own research shows that 58% of exercise, movement and dance classes take place in church and community halls and these too face a crisis and should be considered alongside more traditional sports facilities.[22]

Where movement and dance classes are taught.

5. To what extent should elite professional sports support the lower leagues and grassroots

5.1 How should the government make this happen?

Elite professional sport supports the grassroots side in a number of ways most notably through the Voluntary Code on Sports Broadcasting for Sports Rights Owners. The Voluntary Code outlines the ongoing commitment of the UK’s leading sports bodies to two general principles: 

• Accessibility – Wherever possible, making all major events under their control available free-to-air (in live, recorded or highlights form);

• Reinvestment – Putting a minimum of thirty per cent of their net UK broadcasting revenue back into the long-term development of their sport.

Compliance with the Code is monitored by the Sports Broadcast Monitoring Committee, to which the Sport and Recreation Alliance acts as secretariat. Signatories to code are currently split in to two categories:

Signatories assessed as compliant with both the accessibility and reinvestment principles are:

• England and Wales Cricket Board
• Lawn Tennis Association/All England Lawn Tennis and Croquet Club (joint)
• Rugby Football League
• Rugby Football Union
• The Football Association
• The R&A

The signatories assessed as compliant with the accessibility principle are:

• European Tour
• Premier League
• UK Athletics

Money from the code is reinvested into grassroots sport through a number of schemes. One example of which is the R&A, who reinvest broadcast money into the charity Golf Foundation which aims to get more young people into golf.[23]

Looking beyond the existing reinvestment model, we believe government must now look seriously at introducing a mechanism which ensures a fair return from gambling to sport.

The proposed review of the Gambling Act provides a key opportunity to reform the relationship between sport and gambling and ensure that some of the profits made by gambling companies is returned to sport and physical activity, including the grassroots.

Concluding Remarks

As we enter a second nationwide lockdown the future of the sector is unclear and uncertain at all levels. It is hard to predict where the sector will be in both the short and medium-term but it is clear that if no action is taken it is not too much to say that the future of grassroots sport in the UK faces an existential crisis.

In this context we believe there is a compelling case for Sports Recovery Fund along the lines of the Culture Recovery Fund. Grassroots sport and physical activity is the lifeblood of local communities and without a support package we are looking at the closure of many sport and physical activity facilities including sports clubs, leisure centres, community halls and swimming pools. This will be nationwide but the biggest burden will fall on the least active. Without support we face a generation lost to active lifestyles.

Appendix 1 – Sport and Recreation Alliance Members