Ministers have formally backed 10 recommendations set out in a fan-led review published in November.
This also includes more fan consultation via shadowboards and a fairer distribution of money from the top of the game down.
The Government commissioned the review, led by former Sport Minister Tracey Crouch, a year ago in the wake of the European Super League scandal.
Ministers support the idea of a statutory regulator of football in England, giving it statutory powers to license and sanction clubs and financially monitor their activities.
Football finance experts Deloitte found that in 2018/19, before the Covid-19 pandemic, second division championship clubs spent 107 per cent of their revenues on wages – well above UEFA’s new financial target of 70 per cent.
The Government supports the idea of the regulator introducing extended tests for owners and directors to replace the tests carried out by the Premier League, English Football League and the Football Association, including a stricter new “integrity test” for owners.
It comes amid the ongoing sale of Chelsea by Russian owner Roman Abramovich, who was targeted with British sanctions last month after Russia invaded Ukraine.
Rights group Amnesty has raised concerns about the ownership of the Stamford Bridge club and also slammed the October purchase of Newcastle by a Saudi-backed consortium, saying it was an attempt to “sports launder” the Gulf kingdom’s human rights record.
It is not yet clear whether an integrity test would include human rights issues within its scope.
Prime Minister Boris Johnson said the independent regulator would “help supporters defend their interests and the interests of historic clubs”, adding he hoped there would be rapid progress towards new legislation.
Sport Minister Nigel Huddleston said radical changes were needed to secure the future of the game.
“We will work expeditiously to build a strong, independent regulator,” he said.
“However, football authorities can now take action to address issues football is currently facing such as:
The Premier League accepted the need for reform but said a “legislatively backed regulator” was not needed.
“We welcome the government’s clarity on their position and commit to working with them in this next phase of consultation, although we will remain adamant that there is no need for there to be a legally backed regulator,” she added.
Crouch said the government’s endorsement of her review was “a huge step forward” for major reforms in football, but the uncertain timeframe for implementing changes was “concerning” for clubs and fans.
Julian Knight, the leader of the House of Commons’ Digital, Culture, Media and Sport Committee, also criticized the lack of a definitive timeframe for the legislation.
“Without a firm timeline to address the deep-rooted issues plaguing the game, and no attempt to establish the regulator in shadow form ahead of legislation, it feels like the government has parked the bus when it should be flat-out attacking.” deliver in the best interests of the fans,” he said.
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