Parliamentary committees slam racing levy plan

7 December 2018

The UK government has been accused of “vague assessments” of the benefits of changing the way horseracing is regulated in a scathing report issued by two Parliamentary committees.

The committees questioned the financial and regulatory benefits, which include a saving of more than £3m over 10 years in administrative costs, identified by the government in its proposals to redistribute the Horseracing Levy Board’s powers to the Gambling Commission and a yet-to-be designated body to be created by the horseracing industry.

The House of Lords Delegated Powers and Regulatory Reform Committee and the House of Commons Regulatory Reform Committee also urged the government to amend its method of delivering the changes. They argued that only a bill introduced in Parliament will ensure effective scrutiny of the legislation itself and the future running of the industry. The committees also noted that a planned Legislative Reform Order (LRO) would replace a statutory body with a non-statutory body, the appointment of which would not be subject to parliamentary scrutiny and outside the scope of Freedom of Information legislation.

MP Stephen McPartland, chair of the Commons committee, said it was essential the changes are delivered properly as they could have a wide-reaching impact on a major sport that is hugely important to the economy.

“The government must not try to avoid scrutiny by using delegated rather than primary legislation to pass these proposals,” he said. “Ministers should now reflect on the views expressed by the committees of both Houses and bring forward a Bill instead. Parliament and those involved in horseracing must be given the chance to properly consider the changes.”

The government's first stage of levy reform, which extended the funding system to betting operators based overseas, came into force in April 2017. However, plans to then divide the Levy Board's collection and distribution duties between the Gambling Commission and a new Racing Authority respectively were delayed by the 2017 general election, with the draft Legislative Reform (Horseracing Betting Levy) Order 2018 introduced by the Department of Department of Digital, Culture, Media and Sport (DCMS) in October this year.

According to the government, the new arrangements will save on administration costs and ensure more funding is available for the British horseracing industry and horse welfare. An impact assessment issued by the DCMS estimated a total saving in administrative costs of £3.35m over 10 years.

The changes are broadly backed by the racing industry, with the support of groups such as the British Horseracing Authority and Arena Racing Company. The Association of British Bookmakers has also publicly backed the changes, in particular the Gambling Commission’s expanded role.

The Parliamentary committees held a joint meeting on November 21 to take evidence on the draft Order, taking testimony from Sports Minister Mims Davies among others. 

The government must now consider the two committees’ reports and decide whether to amend their proposals and submit to further scrutiny or follow the recommendation of both committees that this proposal should be brought forward as a Bill.

Both committees have indicated that, should the government attempt to bring back the draft Order, they would use their formal veto to block any further progress.

However, Davies, writing to the committees last week, said she maintained that an LRO is “appropriate” and that the proposals “will reduce burdens in a number of areas, including by reducing reporting requirements on bookmakers.”