There's a lot about Chelsea I don't like, but their system I believe has still created a more capable youth team than ours. The fact that we are overhauling ours at the moment is testament to the fact that it has not been good enough. Chelsea may not be giving their youngsters opportunities, but the players coming out of their academy (whether home-grown or originally) bought are highly sought after in the PL and lower divisions. I believe the quality of their coaching is at youth level is top notch, but the downside is that I hate that they can stockpile so much talent as well. I have read that there are people in the league who want to reform the loan system including Scudamore, but they are currently being outvoted by PL club representatives in their pursuit of reform. It seems to me that club managers such as Martinez etc are just as guilty in allowing the system to continue as they see the loan system as a means to get players which they think they can't afford rather than see it as prime reason why they can't afford these players in the first place.
I think PL clubs should be banned from loaning players out to anyone in the same division and that loans out should be restricted to 5 per season. For anyone beyond those 5 who are at the stage of looking for first team minutes, they should be sold. If we think those players have potential but are not yet ready for our first team squad, they should perhaps be sold cheaply but with the buy back option. That way the buying team has a vested interest in the long-term development of the player so are more likely to play them like Carlos Vela.
What for me is a tragedy is that FFP is doing nothing for clubs like Southampton who, on the back of largely home-grown players and a few smart foreign signings, are now seeing their team being decimated rather than seeing it as the launching pad to challenge the elite.