Academies the latest to feel the game's chill winds

The parlous state of rugby's finances is threatening to undermine the next generation of English Grand Slam winners. While the Rugby Football Union insist their £78m World Class Performance Plan is on track, managers of the academies based at the Zurich Premiership clubs are reeling from a double whammy of cuts in their central funding.

There are 14 regional academies – one at each of the 12 Premiership clubs, with the others on split sites in the West Midlands, and Devon and Cornwall. Last week their managers were informed by the RFU's director of academies, David Shaw, of a change in the method of funding. Instead of per capita amounts based on the number of potential stars in each academy, the money will come in a lump sum. An academy like Leicester's, who believed they had met the target of 25 "élite players" in the 16 to 21 age group, are expecting a cut in RFU contributions from £208,000 to £172,000.

"In simple maths," said Andy Key, the manager of the Leicester Tigers-England Rugby academy, "we as a club might have funded a strength and conditioning coach jointly with the RFU. Now we would have to fund that person, or whatever resource it may be, completely."

Or, potentially, not at all. Premier Rugby, alarmed at the continuing losses suffered by most of their member clubs, have implemented a tighter salary cap on players and ancillary staff. Gloucester cited this when they laid off their first-team manager, Pete Glanville, and second-team coach, Ian Smith.

It is bound to add fuel to the club v country debate over the merits of developing England-qualified talent. Leicester's director of rugby, Dean Richards, has blamed the Tigers' relatively poor season on his squad's international commitments, while Newcastle signed five players from overseas after the quota of English players per match squad was abandoned in the face of a legal challenge from another Premiership side. "The pressure results in all clubs looking for quick-fix answers," said Wasps' academy manager, Rob Smith.

The academy element of the eight-year World Class Performance Plan got a kick-start of £8m Lottery money from Sport England, front-loaded with £4m in 2001-02, £3m in 2002-03, and £1m in 2003-04. In the current year, clubs have been told to slash their invoices for the third quarter after Shaw admitted "too much was shelled out" in the first two quarters. "Everything expanded a little quicker than was anticipated," he said. "But we committed to a spend on the academies this year of £2.1m, and have spent £2.6m."

Shaw rejected the suggestion that the plan is in danger from the combined effect of no income from autumn internationals at Twickenham in this World Cup year, the failure of England's bid to host the tournament in 2007, and the Sport England cash running out next season. The RFU are predicting an overall loss of £4m in 2003-04. "I wouldn't be doing this job unless I could find the money," Shaw said. "Next year is difficult, but I'm confident funding will go up the year after next."

The clubs' struggles are another matter. "The Premiership agreed their new salary cap," said Shaw. "This is nothing to do with that. We are continuing to support academy managers and assistant managers, and the EPDCs [élite player development centres]." On the question of whether clubs chasing trophies would persist with home-grown talent, he added: "If we reach the target of 300 world-class players in the programme, the clubs will have much less need for foreign imports."

Key is confident that Leicester's academy will continue to produce the likes of Ollie Smith, the 20-year-old centre capped by England during the Six Nations, but warned: "We are an individual business in a market place. It is up to each club's owners or directors to agree or disagree with what the Rugby Union have done. To have a certain amount of money taken away during a budgeted year, I don't think it could have come as any more of a shock."

As things stand, Clive Woodward's world-beaters at senior level are not matched in the junior ranks. In June, the RFU will host the second World Under-21 Championship, having placed seventh last year. The opening match, at Oxford's Iffley Road, is between England and Australia. Whereas the junior Wallabies, like their Springbok and All Black counterparts, are the four-minute milers of the Under-21 and Under-19 categories, England have trudged along like the marathon runner in the diving suit. At the World Under-19 Championship in France last month, England finished sixth for the third year in succession.

Shaw says the Performance Plan, aimed at winning the 2007 World Cup, will change all that. "England are getting more interest in this from other countries than anything we have ever done," he said. "They're all frightened to death."

How the Academy system is working

National Academy

Elite players prepared for international duty by ex-England coach Brian Ashton, getting one-to-one coaching and mentoring.

Target: 30 players to win the 2007 World Cup. Currently: 13 players either in or on fringe of full England squad.

Regional Academies

Network of 14 based at 12 Zurich Premiership clubs plus two in Worcester-West Midlands, and Devon-Cornwall. Players are England-qualified, and have their potential assessed in four categories: skills and elements of competence; fitness; tactical and game awareness; personal attitude. Target: 300 élite players aged 16 to 21, up to 25 players in each academy. Currently: on average, each has about 15.

Elite Player Development Centres

Each regional academy supported by approximately four EPDCs.

Target: to step up the country-wide search for future England players. Currently: where the 14 Regional Academy managers must co-operate with the RFU's existing network of constituent bodies (eg, counties), regional development officers, junior clubs and schools.