Enterprise and Culture Committee, 18 Jan 2005

Meeting date: Tuesday, January 18, 2005

Official Report 302KB pdf

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Scottish Rugby Union

Item 8 is consideration of the proposal to take evidence on the current developments in the Scottish Rugby Union. I will hand over to Susan Deacon, who initiated this agenda item, and ask her to explain the background to it.

I will start by again declaring a registered interest: I served as a member of the strategic advisory group that was established by David Mackay, the previous chairman of the Scottish Rugby Union, to develop a strategic framework for the future of Scottish rugby.

I am grateful to you, convener, for agreeing to put this item on the agenda for today. In a sense I do not think that I need spend long explaining the background because, in the space of just a week, everybody around this table and in Scotland more widely has seen played out in full public view the sequence of events that has occurred in Scottish rugby.

To summarise, the situation began with a motion of no confidence in the chairman, David Mackay, which was passed by the SRU's general committee. Subsequently, David Mackay resigned. After that, three non-executive directors of the executive board also resigned. That all happened over three or four days. Finally, there was the resignation of the chief executive, Phil Anderton. That has resulted in what is essentially a vacuum at the top of the organisation of one of our major national sports.

As colleagues will know, there is to be a special general meeting at the end of this month. Trying to be relatively neutral, I would say that many people were surprised about the fact that that meeting was pre-empted by the no confidence decision; nonetheless, the meeting will go ahead at the end of the month and the representatives of Scottish rugby will debate the issues in full. In particular, they will have an in-depth discussion about the proposals in the strategic review. The main question that seems to be testing everyone's minds in the rugby world is that of governance.

I think it right and proper for the Enterprise and Culture Committee to take an interest in the situation. Rugby is one of Scotland's major national sports. Moreover, it is in receipt of substantial public funds, to the tune of about half a million pounds per annum.

Colleagues might have caught the statement that sportscotland put out at the weekend. It said:

"Future funding revolves around the independent strategic review … as of this week, all decisions regarding funding have been put on hold."

That is a serious situation. The strategic review exercise that was being progressed under the previous executive team had a great deal riding on it. Colleagues might recall that the then chief executive of sportscotland, who came before us last year, made repeated references to the fact that sportscotland was hoping that that piece of work would allow a substantial funding package and plans for the future of Scottish rugby to be put in place. That all hangs in the balance now.

I am sure that other members will have views on the events that have taken place. My suggestion is that the committee, taking evidence from the appropriate individuals at the appropriate point—it is rather difficult at this stage to say who those might be—ought to consider where Scottish rugby goes from here.

I am happy simply to go round the table—I think that everybody has a comment to make. We will start with your good self, Christine.

I do not think that it is appropriate for the committee to involve itself in the minutiae of the dealings between the various clubs that make up the SRU. However, it is appropriate for the committee to do exactly as Susan Deacon has said and to consider what the future holds for one of our key sports. Rugby union is potentially in receipt of a large amount of public money and it has the potential to generate significant revenues for tourism and business in Scotland. I would like us to be able to speak with the people concerned when they are in a position to tell us whither now—that is the important thing for Scotland and for the committee's interest.

I agree with what has been said so far. The committee has a responsibility to scrutinise the governance of sporting bodies in general and of the SRU in particular, given that the SRU is in receipt of more than half a million pounds of public money each year from sportscotland. As a category 1 national governing body, the SRU has a specific remit to ensure that its governing structure ensures the betterment and proper development of the sport. My understanding is that some of the changes were proposed as a result of recommendations in a Deloitte & Touche report to UK Sport on governance within national governing bodies.

I agree with Christine May that we should not get involved in the minutiae of developments within the SRU but that we should hear evidence on the wider matter. I can suggest a number of individuals from whom the committee should hear. Should I offer some names now?

We will deal with the issue in principle today and have further discussion later.

We need to be a bit careful. Over the weekend, I was contacted by people in club rugby who made representations asking why the committee is getting involved in a matter that is entirely for the clubs. I am conscious of the fact that the Scottish Rugby Union is a private organisation. Susan Deacon has expressed a firm view, both today and in the motion that she lodged, on what should be done. To an extent, therefore, her contribution is compromised by her partisan viewpoint.

Having said all that, I accept that rugby is a major national sport and that it is in receipt of large sums of taxpayers' money that we have a duty to ensure is properly spent. I believe that we should keep a watching brief on the issue rather than rush in at this stage. Let us see how things settle down over the next few weeks. We can consider how to take the issue forward in a month or two.

I agree with Susan Deacon that we should take evidence on the matter. We all have pre-stated opinions on other issues on which the committee takes evidence and the SRU will be no exception to that. As I argued in the context of our football investigation, the fact that an organisation is an important national sporting body that has knock-on effects in many other areas of Scottish life is a valid enough reason for us to take an interest in it. The Parliament has a duty to consider the issue on that ground alone. Given the involvement of public funds, we have not just a locus but a responsibility to look into the matter. I believe that the course of action that Susan Deacon recommended is absolutely appropriate. We do not need to look into the details, as the issues are quite clear cut. Our involvement could be beneficial, as we might shed some—perhaps more impartial—light on events in the SRU.

I have little to add, other than that it would be wrong for us to do anything before 30 January, which is when I hope Scottish rugby will sort its house out one way or the other, although I fear that that will not happen. We cannot get into who are the good guys and who are the bad guys in the two sides of the argument. It is possible that they are all bad guys or—[Interruption.] Members must let me finish the sentence. It is also possible that they are all good guys.

Certainly, we need to ask questions about the use of public money. I agree with Christine May that we need to consider the value of international rugby to Scotland's economy and tourism industry. I seem to recall that the money that is generated from a six nations game in Edinburgh is in the region of £20 million to £25 million. However, that is not likely to come to a stop. I am also concerned about Scotland's stature. Rugby is one of the main ways in which our country is projected worldwide and is given status and standing. Even before the events at the SRU, the message that was being sent through rugby was not particularly positive. As the committee with responsibility for sport in Scotland, we have a duty to examine what is happening within rugby to ensure that the best use is made of public money and that a positive image of Scotland is projected through Scottish rugby.

That brings us back to the need to ask about Scottish rugby's future, which involves what is happening in youth and development work. The only people whom we can ask about that are those who are involved in the game. We should not just go for people at the top or for whatever committee is arguing with whatever other committee. The discussion will be about the future of Scottish rugby and how the present situation will affect it—I suspect that the effect will not be positive, but we may be of assistance in drawing out some of the issues. I agree with Richard Baker that, given that public money is involved, we have a duty to ask the people who are entrusted with that money what is happening.

We must be clear about the objectives of the evidence-taking session. The actions that the committee can take to sort out Scottish rugby's immediate problems are probably relatively few. I suspect that the matter is more down to sportscotland in the immediate couple of weeks. However, we can try to find out what has gone wrong, what lessons can be learned and what future direction we want Scottish rugby to go in from a political point of view. We should have the evidence-taking session in about a month, just after the February recess, when some of the dust will have settled and what is going on will be slightly clearer.

We are nearly at one on the issue, although obviously there are worries and reservations. I will give my sense of members' thoughts. The first is that the committee can legitimately take an interest in the issue and should do so. The second is that the format of that interest should be along the lines that Susan Deacon suggested of a one-off hearing rather than an inquiry. The third is that, as Chris Ballance said, the most appropriate timing would be to let any heat from the special general meeting of 30 January die down a bit—we should not rush in too quickly. I suggest that the earliest and most appropriate date for the session is 22 February—the first meeting after the February recess—which will give a three-week gap after the special general meeting. Another advantage of that date is that it allows us, either on 1 February or 8 February, to discuss whom to invite to give evidence. That will give the clerks time to invite those people and, I hope, ensure that they attend the meeting.

The final point that members have made is that we must be clear about what we are trying to achieve. I underline Mike Watson's comments on that. Our hearing should concentrate on the future, rather than on trying to apportion blame for the past. Are those suggestions generally agreed to?

Members indicated agreement.

Your summary is fair, convener. One point that none of us has factored into the discussion is that, as well as public funding, there is also a major issue about corporate support and sponsorship for the sport. That is another reason why restoring stability, in whatever shape or form that might take, is so important. I hope that we can, as Richard Baker suggested, add value to the process by having in that timescale a discussion that, as you outlined, starts to look to the future so that progress can be made.

I am always reluctant for the committee to get involved in the operational matters of any organisation, let alone one that is entirely independent. We all agree that the importance of rugby is such that there is a legitimate public interest for a host of reasons, but we will not get involved in the SRU's operational issues, which are entirely a matter for that organisation, its sponsors and other stakeholders. Do members agree to that?

Members indicated agreement.

We should now move into private session, but it would be daft, given the time, to start our discussion on our report on the Transport (Scotland) Bill. We still have plenty time to report back to the Local Government and Transport Committee, so we can have that discussion next week. I apologise for the length of today's agenda, but we were trying to accommodate the two ministers. We had to extend the agenda—as happens from time to time—because the Minister for Enterprise and Lifelong Learning is going to China on Saturday. Nevertheless, we got through a fair amount of work and we can fit in the discussion of our report on the Transport (Scotland) Bill next week. Do members agree to have that discussion next week?

Members indicated agreement.

Meeting closed at 16:49.