Hereford chairman Andrew Graham has written to the National League board on behalf of 11 clubs demanding a review of the way a £10 million government grant has been distributed.
Clubs received their money for the first month today with further funds to follow in November and December.
Last week, the National League informed their 66 members of how the money would be distributed, but some clubs felt it would not be enough to make up for their lack of fans.
Now, on behalf of Chester, Chesterfield, Dulwich Hamlet, AFC Fylde, Hereford, Kidderminster, Maidstone United, Notts County, AFC Telford, Wrexham and Yeovil, Graham has written to the National League calling for the process to be reviewed.
The letter read: “Dear Brian, Jack
Firstly thank you for agreeing to hold a call on Tuesday 27th October 2020, we all considered it to be a useful and polite exchange.
I would like to take this opportunity to sincerely express how extremely grateful, each and every signatory to this letter is, for the intervention of Government in seeking to compensate us via National Lottery funding for losses incurred as a direct result of its decision to prevent supporters attending matches due to the impact of Covid-19. We appreciate that this is a difficult time for many people and that we are privileged to receive backing from Government. Recognition of this funding, comes with an additional recognition and thanks for the time and good intentions of those involved in the subsequent consideration for distribution of said funds.
There is no doubt that the Government decision to take this unprecedented step is due to the unquestionable fact, that each and every Club plays a significant and socially irreplaceable role in sustaining local economies. There is also the immeasurable impact that local football clubs have on the collective well-being of those that follow them, together with the valuable work our clubs undertake in their local communities.
Although of course we agree with you that it is desirable for all our remaining 66 member clubs to survive the season, this cannot be guaranteed by an arbitrary and subjective decision on distribution of funding, as every club is operated according to different models and the reality of their situation simply cannot be sufficiently factually known for the League to play judge and jury of it. Even the clubs couldn't be expected to know exactly how their income and cost basis would pan out when they filled in the League forms a few weeks ago. The one irrefutable fact is that the Government / National Lottery funding was earmarked to cover clubs' ‘lost gate revenues', i.e. shortfalls in income through the turnstiles as a result of Government preventing fans from returning to stadia. This the best basis upon which to fulfill Government instructions equitably.
We were therefore disappointed, (and we cannot legally as Directors accept a situation where we have made strategically significant decisions, based on a promise to compensate us for one corporate factor), to then be faced with a ‘fait accompli' where no set parameters were used, to determine this unacceptable outcome. In brief, the distribution, as ratified by the National League Board, has not been done on the intended basis. There appears to be no confirmation from member Clubs that their representatives were communicating with, or indeed representing them in the purest sense of the word!
By virtue of using a distribution method, which largely ignored the Government guidelines, some clubs, including those represented by members of the National League Board, were handed far in excess of their actual losses of gate revenues, while other clubs were penalised and received less than half of their actual gate revenue loss. In extreme cases this resulted in some clubs receiving around five times as much funding – per absent spectator – as other clubs. This is patently unfair and, although the National League may have persuaded DCMS to accept this as a rational and diligently deliberated outcome, it contradicts the express purpose of the funding and unintentionally exposes the League Board to criticism based on conflicts of interest.
We fail to see, and the call failed to explain, why the League thought it could do better than follow the Government guidelines to concentrate on ‘lost gate receipts' and why it adopted a central-funding type ration of 60-20-20, giving the top division clubs three times as much as lower division clubs regardless of their gate receipt losses.
This allocation model effectively distorts the competition, as some clubs will receive unjustified windfall payments, and creates an ‘unsustainability' environment, with many clubs simply not receiving compensation for gate receipt losses.
When Government funding was first announced on the above basis, it encouraged some clubs to agree to start the season without fans present in their grounds, because they knew they would be compensated for this very problem. Had they known they would effectively be operating, somewhat under economic duress, in an unsustainable manner, they may well not have wished to start the season and thereby trigger onerous contractual commitments.
All of the above issues should have been anticipated by the National League Board in the interests of achieving a fair distribution of funding to all their member clubs in accordance with clear Government guidelines. In the event, it is clear that this was not done.
We seek not to attempt to influence any decision of the Board of the National League and therefore call on the National League Board to call an emergency Board meeting before Wednesday 4th November and during that meeting discuss and determine a fair resolution to the issue of allocation of National Lottery Grant monies.
It is not our intention that the first interim payments are delayed as we are aware that many Clubs will be in need of these monies to remain solvent.
If it is deemed inappropriate for the Board to revise the decision due to overriding conflicts of interest then we urge you to agree to urgently appoint an independent panel to determine the method to be used to distribute this round of funding to its clubs.
We urge the National League Board or any independent panel otherwise instructed, to base their evaluation and decisions on the objective for the funding as per the DCMS / Culture Secretary press release on 18th October 2020 on the Gov.UK website – ‘' Funding will be distributed to each of the 66 National League clubs to help cover their lost gate revenue from the delay to fans being permitted to return, that was originally scheduled for 1 October.”
Kind regards
Signed
Chester
Chesterfield
Dulwich Hamlet
Hereford
Kidderminster
Maidstone United
Notts County
AFC Telford
Wrexham
Yeovil.
