David Conn: Stockport's guilty plea protects FA's secret system

After years of persistently denying any wrongdoing and even claiming they had been cleared by the Football Association, Stockport County finally admitted this week that they improperly obtained more than £18,000 of public money from the Football Trust by inflating an invoice for a public address system in 1995.

An Football Association disciplinary committee ordered the club to pay £20,000 to the Trust – now reconstituted as the Football Foundation – fined them £10,000, "reprimanded" and "warned them as to their future conduct".

The outcome again highlighted some of Stockport's recent history under their chairman, the Sheffield landlord and property developer Brendan Elwood. However, it is difficult to contemplate the FA's handling of the affair, from the yawning length of time taken to investigate it, to Thursday's sodden squib of an outcome, without being overcome by the utmost gloom.

The FA investigation into Stockport followed a BBC Radio 5 On the Line programme broadcast as long ago as July 2000, which I co-produced with the broadcaster and author Chris Green. The BBC immediately turned the files over to the FA, which had requested them and said they would investigate.

We had revealed that in 1995, when Stockport applied to the Football Trust for a grant to aid the installation of a new PA system at their Edgeley Park ground, they encouraged the supplier, Delta Telecoms, to inflate the invoice from £41,750 to £59,999, £18,249 more than the true price of the job. The figures, extraordinarily, were set out in a memo, which we obtained and later passed to the FA. The Trust duly paid Stockport 75 per cent of the claim: £44,999, in fact £3,000 more than the total cost of the system. Delta's proprietor, Alan Ratcliffe, said Stockport paid him the full £59,999, but he was immediately required to send £18,000 back.

The club's secretary, Gary Glendinning, claimed that £59,999 was the true price for the job, and that Delta's profit was £18,000 – a 30 per cent margin – which Delta "chose to reinvest" by way of a two-year sponsorship agreement. Stockport had maintained that stance until Thursday, when they admitted the charge, and they must now repay the excess public money which they improperly obtained.

The PA system grant was one of the smaller ones paid to Stockport. In the 1990s, three sides of Edgeley Park were refurbished, including the £1.1m rebuilding of the all-seat Cheadle End, for which Stockport received around £750,000 from the Trust. That stand and all the other major building work was carried out by Ellenby Construction, a company belonging to one of the club's own directors, Mike Baker. He described it, particularly the Cheadle End, as "our breakthrough" – establishing Ellenby's name and enabling his company to earn many millions of pounds building stands at Bradford City, Rochdale, Mansfield and elsewhere.

Baker, who is based in Bolton, said his first contact with Stockport was in 1987 when his then modest company did some work on the Railway End terrace for which Stockport had not paid. He moved to put the club into liquidation, issuing a winding up petition. He was invited on to the board, "almost as an overseeing role until the club were able to pay us".

After the 1989 Hillsborough disaster, the Government required all football grounds to be improved and made public money available to clubs via the Football Trust. At Stockport, Baker wanted the work. To ensure that public money was properly spent, the Trust required a club to seek "three properly authenticated competitive tenders" for any job. If there were any connections between a director of a club and a building contractor, they had to be disclosed to the Trust.

We found that for two of the jobs, in 1995 and 1996, one for re-seating the Hardcastle Road stand, the other for extending a car park, Baker's company won the work after a tender in which the other two companies did have links to him. One had a director who once worked for Baker. The other was Field Acre Construction, its proprietor named as Tony Marland, an old college friend of Baker's. The company itself, we found, was dissolved and struck off the company register in 1987 – eight years before bidding for the work. Baker told us he had called Marland beforehand to tell him he had suggested Field Acre to the club's architects, and even gave Marland a rough figure for the job, "less than £100,000 or something of that order". Baker's company came in cheaper than both other companies and won both jobs.

He told us he had done nothing wrong and that he understood that Marland was looking to restart Field Acre. "There has been no collusion. We are submitting our prices in a bona fide way... I am not going to apologise for being successful," Baker said.

The programme also revealed Stockport's dismal employment record, with four Employment Tribunal cases having been brought against them including the sacking in 1995 of the Uruguayan manager beloved of the fans, Danny Bergara.

Bergara won his case for unfair dismissal, after the tribunal found that Elwood had twice misled Stockport's own board of directors, including, according to the tribunal, one clear "untruth".

Elwood, they found, had attempted to assault Bergara at a club function and the finance director, David Jolley, had told Bergara to come to his office the following day where he would, "tear up his contract and shove it up his arse".

Quite what the FA was doing in the two-and-a-half years between being handed the files and last Thursday is unknown. The FA's spokesman responsible for the case would not give details. Nobody from the FA would confirm officially what the charges were. The FA will not even say who was on the three-man panel, which means that they are not accountable publicly for their decisions.

The hearing was held behind closed doors and there is no information available about what was discussed, or said, or how the decision was made.

Following a similarly closed hearing into allegations of wrongdoing at Chesterfield in 2001, David Burns, then the chief executive of the Football League and a lawyer, concluded that such hearings had to be conducted in public to ensure fairness and accountability. Burns has gone and no such reform is on the horizon.

On Thursday the FA made a statement that: "Stockport County FC today admitted breaching FA misconduct rule E1 in relation to a Football Trust application made in respect of the club's PA system in 1995."

Nobody, even the most zipped-up football anorak, can possibly know what on earth that means. Certainly Stockport fans are bemused. Further clarification with the FA elicited that rule E1 turns out to require "participants" not to act "in any manner which is improper or brings the game into disrepute".

An FA spokesman argued that the £30,000 financial penalty meant that the club was repaying all the money it had improperly gained.

While the club must pay the penalty, no individuals are to be charged. One FA official said the governing body is loath to challenge individual directors because clubs are often in their financial debt, and the director could walk away leaving the club in crisis. This calls fundamentally into question the FA's ability to be a proper, independent regulator while also being responsible for clubs' welfare.

The Football Foundation said it took the matter "extremely seriously". A spokesman said Stockport have been prohibited from receiving any grants pending the outcome, and the Foundation's board will now consider whether they should take further action. Many sanctions are available, including, he said, a blanket ban on Stockport receiving any further grants.

After years of denial, there is some justice in Stockport's admission – although the absence of publicly available detail seriously undermines it. Of graver concern is the FA's secrecy, delay and evasion over the case, and the impression it has unavoidably given, of football's governing body, currently rudderless, drifting towards chaos.

davidconn@independent.co.uk