Government Stepping Back

Just in case you have been on another planet for the past week or so, the United Kingdom is in the midst of a massive spending review.

The people of this once great nation seemingly never learn from history. After all, every time there has been a Labour administration, the country has ended up in a financial mess or close to financial and economic ruin.

Although it has to be noted under the stewardship of Bliar (not a typo) and Brown, the level of fiscal incompetence and pecuniary sleight of hand has plumbed new depths.

If I applied such creative accounting to my company accounts I would soon feel the full force of the authorities, yet such creative accounting of the national accounts is seemingly allowed to pass with impunity.

Anyway, part of the review has been a look at Quango’s, an exercise which has seen many, although not as many as should have been, abolished.

Interestingly this particular exercise could have a significant impact on horse racing.

There are three Quango’s specifically related to horseracing and each has a differing fate.

There is the Horserace Totalisor Board which, as has already been announced, will be abolished and sold off.

There is the Horserace Betting Levy Appeal Tribunal, which will be retained in its entirety as it “performs a technical function which should remain independent of Government.”

Finally there is the Horserace Betting Levy Board, which like the Appeals Tribunal is being retained and for the same reason. However there is a rider which states, “modify functions to remove Secretary Of State’s role in determining Levy.”

That rider is interesting and, indeed, most welcome as the Government should have no role in deciding the funding of any sport.

When I first read the summary I assumed the Government was planning to step away completely and was delighted, however it seems my delight may have been somewhat premature.

Jeremy Hunt, the secretary of state for Culture, Olympics, Media and Sport, believes there is no longer any need for any political involvement.

In a statement the Department For Culture, Media and Sport said, "We plan to remove the role of the secretary of state from determining the Levy scheme to give the body greater independence and help further to reduce Government involvement in horseracing.

"What will we put in its place? That's yet to be decided.

"Ministers will discuss the options with the Levy Board and the Racing and Betting industries with a view to ensuring the funding for racing is fair and collected from as broad a base as possible.

"An announcement will be made on all this in due course."

The BHA have responded predictably.

Nic Coward, chief executive of the BHA, said: "Racing welcomes the announcement from Government that they are retaining the Levy and laying out plans to modernise it.

"In particular, we welcome that this is a first step by Government to a legal framework that will, in their words, 'ensure that funding for Racing from betting is fair and collected from as broad a base as possible'.

"The principle behind the Levy and the Levy Board - that of a fair transfer of funds from betting businesses to Racing - remains fundamental, and this Government announcement sweeps away any uncertainty about this for the future.”

Paul Roy, chairman of the BHA, stated, "(the) announcement is one part of what Racing has united to call for.

"It's a huge step, but it will only deliver a fair return for Racing in future years.

"Action is needed under the existing system to deliver a fair return in 2011. The matter should not need to land on the secretary of state's desk.

"But under the current process, the power and responsibility to come forward with realistic proposals is solely with the Bookmakers Committee.

"The proposal they are sticking to is a long way from one that could even be considered, and they have shown no sign of moving from it.

"On current forecasts, their proposal would mean a contribution of less than £50m to the Levy in 2011 down from over £100m just two years ago.

"They appear intent on exploiting loopholes for as long as they can, with catastrophic consequences for our sport and Racing people.

"Meanwhile, however, one major bookmaker is stating that exchanges are short-changing the Levy and Racing by tens of millions of pounds, and exchanges point back at big bookmakers joining others offshore and exploiting loopholes in the threshold system, estimated as hitting the Levy just as hard.

"They are both right. The Bookmakers Committee have to come forward with a proposal to deliver a return that is fair to Racing."

I hate to say it but Coward and, especially, Roy are beginning to sound like one trick ponies, spouting out the same tiresome rhetoric.

This is the same BHA management who had no Plan B when faced with a 2011 Levy return which was significantly lower than their, arguably, unrealistic expectations.

The same management who blustered about having to impose, much needed, drastic cuts to the 2011 program, yet then rolled over and published a fixture list with a token reduction of the number of fixtures, spreading the decreasing prize money even thinner.

It is a subject I have approached before and have no desire to revisit in detail again here.

Regular readers will already know my views on the CV’s of the BHA board and their ability to effectively manage a multi-million pound business.

Their slavish adherence to a single funding method, namely the Levy, shows a clear lack of financial acumen, foresight and an inability to view the wider issues.

The Levy is anachronistic and I have yet to seen any argument, yet alone a compelling one, as to why the Levy should be the means of funding the sport.

Why should racing alone receive a Levy contribution from bookmakers?

I had to smile, in particular, at Roy’s comments about racing being united. Racing is not united and never will be unless it is radically restructured. There are far too many disparate, vested interests in the sport for it to be unified.

The BHA is a vast improvement on its various predecessors, however it is still closer to being the Old Boys Club that was the Jockey Club, than being the effective custodian of a multi-million pound business.

The BHA needs to pay particular attention to the final word in its title, it needs to assert its authority and unite the sport as a single, cohesive grouping.

There needs to ba a funding model that is realistic and appropriate in the 21st century and not reliance on an anachronistic, unworkable model.

The BHA needs senior management who are not narrow minded, confrontational and who are ego-free. Individuals who are able to climb out of the deep, narrow furrow they have ploughed for themselves.

Watching the public pronouncements, from both sides of the debate, surrounding funding of the sport is like watching two alpha-males arguing over who has the biggest (or should that be smallest) penis, the on-going public spats are unedifying, achieve nothing and indeed discredit racing and the betting industries.

Most importantly racing, like any other industry in this country, needs to rationalise, indeed rationalise severely, to fit the funding available.

Yes it will mean a massive cut in fixtures, yes it will mean job losses, yes it will mean a decrease in the horse population. It means racing having to face the realities of the real world, realities others have been having to face for some time now.

Racing needs to emerge from its insular world and come into the real world and certainly the Government should not be getting involved in the macho posturing surrounding funding of the sport.

I would much prefer Government time and effort being dealing with defence, the NHS and education rather than becoming involved in debates about the funding of what is, in reality, a minority sport.

Instead of bickering with the bookmakers, perhaps those mandated with running the sport should concentrate their efforts in ensuring the Tote comes fully under the control of racing, although looking at their current track record that may well be a recipe for disaster.

Perhaps the Hong Kong Jockey Club, who really do know how to manage a racing set up, should come in and take over UK Racing and the Tote - lock, stock and barrel.