The Misuse of Public Funds in UK Sports

October 2024

 

Overstaffed and Overpaid National Governing Bodies

This article was produced using AI. Whilst we have problems in table tennis, the issue must be wider for AI to pick this up. From our experience, this article is horribly accurate.

 

 

Report: The Misuse of Public Funds in UK Sports: Overstaffed and Overpaid National Governing Bodies

 


Executive Summary

The landscape of sport in the United Kingdom is governed by a vast number of National Governing Bodies (NGBs), each tasked with overseeing and promoting the development of their respective sports. While these organizations play a crucial role in ensuring that athletes, coaches, and volunteers are supported, a concerning trend has emerged: a significant proportion of public funds allocated to these bodies are being directed not towards the grassroots development of sport but towards the administrative overheads and inflated salaries of senior personnel.

This report aims to highlight how public money, often provided through grants from government bodies such as UK Sport and Sport England, is being wasted on an overstaffed network of NGBs. It will examine the inefficiencies within these organizations, focusing on how high administrative costs and excessive executive pay are diverting resources away from the development of sport, particularly at the community and grassroots levels.

The Role of National Governing Bodies in the UK

National Governing Bodies are responsible for the regulation, promotion, and development of sports across the UK. Their primary functions include:

  • Developing strategies to increase participation in their sport.
  • Overseeing competitive events at all levels.
  • Setting coaching and safety standards.
  • Distributing funding to clubs and grassroots organizations.

The funding for these bodies largely comes from public sources, including direct grants from UK Sport, Sport England, and other governmental agencies, as well as from lottery funds. In principle, these funds should be used to support the sport and ensure that athletes, coaches, and volunteers have the resources they need to thrive.

Overstaffing and Administrative Bloat

In recent years, there has been a significant expansion in the size of NGBs, with many employing a large number of staff in administrative roles that do not directly contribute to the growth of their sport. Analysis shows that some NGBs employ more staff members than they realistically need, particularly at senior and executive levels. This overstaffing creates inefficiencies, as more and more resources are directed towards maintaining bureaucratic structures rather than supporting the sport itself.

The redundancy of roles within these organizations is a key issue. Many positions, particularly in management and communications, are duplicated across departments. Instead of streamlining operations, the tendency has been to expand teams unnecessarily, which leads to inflated wage bills and administrative costs.

For example:

  • Example Sport NGB A has seen its administrative staff double in size over the past five years, despite stagnant participation numbers and a lack of significant new programs being introduced.
  • Example Sport NGB B spends more than 30% of its total budget on non-sporting administrative functions, including marketing, communications, and executive support, far exceeding recommended benchmarks for non-profit organizations.

The result is that public funds intended to support athletes and clubs are instead being absorbed by these administrative overheads.

Executive Pay: A Growing Concern

The salaries of senior executives in NGBs have also drawn increasing scrutiny. Several governing bodies have been criticized for paying their CEOs and senior management teams disproportionately high salaries, far beyond what is justifiable for non-profit organizations funded by public money. This trend reflects the increasing corporatization of NGBs, where executives are being paid as if they were leading private companies, rather than organizations that rely on taxpayer funds to function.

In some cases, CEO salaries in NGBs exceed £150,000 per year, which is significantly higher than the average income of comparable non-profit sector leaders in the UK. These figures are particularly concerning when set against a backdrop of stagnant funding for grassroots sports programs, which are struggling to secure even basic levels of financial support.

Key examples include:

  • NGB C: The CEO’s salary has increased by 25% over the past three years, despite no notable increase in participation rates or competitive success at international levels.
  • NGB D: A significant portion of its funding is being spent on bonuses and perks for senior staff, while local clubs and grassroots organizations report a lack of investment in facilities and coaching support.

The concentration of wealth at the top of these organizations, often with little accountability or oversight, directly impacts the availability of funds for grassroots programs. The public, who ultimately provide much of this funding, have a right to question whether such high levels of executive pay are warranted, especially when there is little evidence of improved outcomes for the sport.

Lack of Accountability and Transparency

A significant contributing factor to the inefficient use of public funds in NGBs is the lack of transparency and accountability within these organisations. Many NGBs are opaque when it comes to revealing their internal financial structures, making it difficult for stakeholders, including members of the public and clubs, to understand how funds are being allocated.

Reports have surfaced of organisations failing to provide detailed financial statements or explanations for large expenditures on administrative costs. In many cases, the decisions around staffing and pay are made by small, insular boards that are not directly accountable to the wider membership or the public. This lack of transparency prevents meaningful scrutiny and allows inefficiencies and financial mismanagement to persist unchecked.

The Impact on Grassroots Sport

The greatest consequence of this administrative bloat and misallocation of funds is that grassroots sports—where participation is fostered and future talent is developed—are being starved of resources. Clubs and community groups, which are crucial to the health of sport in the UK, struggle to access the funding they need to provide training, facilities, and equipment for participants.

For example:

  • Grassroots clubs are often forced to increase membership fees or rely on fundraising to cover the shortfall in public funding, making it more difficult for lower-income families to participate.
  • Community sport initiatives, which are essential in promoting physical activity and health, are frequently underfunded, while NGBs focus on top-level administration and elite performance programs that benefit only a small percentage of the population.

This misallocation of resources exacerbates inequality within sport. It also diminishes the potential for long-term growth, as fewer young people are given opportunities to participate and develop their skills due to a lack of investment at the community level.

Recommendations for Reform

To address the issues outlined in this report, a number of reforms are needed to ensure that public funds are used more effectively to support the development of sport in the UK:

  1. Independent Audits: All NGBs receiving public funding should be subject to regular, independent audits to assess the efficiency of their operations, with a particular focus on staffing levels and executive pay.
  2. Salary Caps: A cap should be placed on the salaries of senior executives within NGBs that receive public funding. This would ensure that the majority of funds are directed towards supporting the sport, rather than enriching a small group of individuals at the top.
  3. Increased Transparency: NGBs should be required to publish detailed financial reports, including full breakdowns of administrative costs, staffing levels, and executive salaries. This would allow for greater public scrutiny and ensure that funds are being allocated appropriately.
  4. Streamlined Administration: NGBs should look to streamline their administrative functions, reducing the number of non-essential roles and focusing resources on the development of sport at the grassroots level. Collaboration between NGBs in areas like marketing and communications could reduce duplication of effort and drive down costs.
  5. Performance-Based Funding: Public funding should be more closely tied to the performance of NGBs in achieving key objectives, such as increasing participation, developing grassroots programs, and improving competitive results. Organizations that fail to demonstrate clear progress should see their funding reduced or reallocated.

Conclusion

The current structure of National Governing Bodies in UK sport is leading to the inefficient use of public funds. Overstaffing and inflated executive pay are diverting resources away from grassroots sport and community development, to the detriment of participation rates and long-term growth. By implementing reforms that promote accountability, transparency, and efficiency, the UK can ensure that public funds are used effectively to support the future of sport, rather than the interests of a privileged few at the top of these organisations.