Derby County Football Club

– in Westminster Hall at 4:27 pm on 28th June 2022.

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Photo of Philip Hollobone Philip Hollobone Conservative, Kettering 4:27 pm, 28th June 2022

We are going to move straight on to the next debate, so would all those Members who are not participating please be courteous enough to leave quickly and quietly because we come on to the important issue of the administration of Derby County football club.

Photo of Pauline Latham Pauline Latham Conservative, Mid Derbyshire

I beg to move,

That this House
has considered the administration of Derby County Football Club.

It is a pleasure to serve under your chairmanship again, Mr Hollobone. At the outset, I would like to thank the Minister for his support and for his willingness to discuss this issue with local MPs. That has really been appreciated.

Last week marked nine months since Derby County entered administration on 22 September 2021—nine months of pain and uncertainty for Rams fans, who have shown so much devotion and dedication to the club during this, the toughest of all seasons. Since September we have seen a string of deadlines set, and missed, by Derby administrators Quantuma and the English Football League. We had an urgent question on the Floor of the House in January because the EFL had set a deadline of 1 February for the club to exit administration. That, like every other deadline throughout the process, was missed and the administrators were allowed to delay again.

In April we finally got the news we were waiting for: a preferred bidder, Chris Kirchner, was announced. We were told on 3 May that it was “almost done”, on 14 May that it was “almost complete”, and on 27 May that they would be closing by the end of the month. On 2 June, we were told that the delays were nothing to worry about and that UK and US bank holidays were preventing the bank transfer, which no one on either side of this multimillion pound deal had apparently foreseen or planned for. All along, the administrators had assured Team Derby—made up of Members of Parliament, councillors and local stakeholders—that nothing was wrong and that Kirchner’s deal would be completed.

Two weeks ago, it was announced via the media, rather than a direct communication from the administrators, that Kirchner had pulled out. Quantuma had made a terrible miscalculation in giving Chris Kirchner 65 days of exclusivity, which could have been spent seeking other, more credible buyers. Those 65 days have come at an absolutely crucial time for the club. We really are at one minute to midnight. Derby has only seven players contracted for next season, and the EFL has not yet lifted the transfer ban. Derby needs to be able to sell season tickets and agree sponsorship and commercial deals, and there are just weeks to go until next season.

In a spark of good news, local businessman David Clowes has been announced as the new preferred bidder and, crucially, has already acquired Pride Park, the stadium, so he is in a good place to finalise his deal. We very much hope he is able to conclude the sale of the club by tomorrow, Wednesday the 29th, but Derby fans have been here before and will not believe it is over until the ink has dried on the contract.

However, it was also announced this week that our inspirational manager, Wayne Rooney, who has given his all to the club over the past year, has left. He fought against all the odds to rescue us from relegation. Despite a transfer ban and a 21-point deduction, he very nearly achieved that feat. Without our points deduction, Derby would have finished comfortably out of the relegation zone, in 17th place. I thank Wayne for all he has done for Derby County. We understand the difficulties and challenges he faced. Rams fans will be giving all our support to interim manager, Liam Rosenior, who has supported Wayne throughout the past year and now has the chance to lead the team forward and hopefully eventually back to the championship and beyond.

With all that context in mind, I have three main points I would like the Minister to respond to. My first relates to the conduct of the administrators, Quantuma. For some time, I have been very concerned about its competence in handling a business of Derby’s size. It took more than a month to work out that Kirchner was not able to provide the funds he promised. There are reports that it failed to communicate effectively with other interested buyers, and it has therefore run the club dangerously close to the edge of liquidation over the past nine months.

Furthermore, Quantuma’s manner of communication with local stakeholders through Team Derby has been incredibly poor. It has constantly told us that it is on the edge of breakthroughs, which never materialised. Our weekly updates barely had any new information. Quantuma refused to discuss key matters, on the grounds of commercial sensitivity, only for those matters to appear in the newspapers the next day. It is reported that Quantuma racked up more than £2 million in costs in the first six months of the administration. Its latest response to supporters’ groups assures us that no fees have been drawn so far, but not that it will not be taking them out of the sale proceeds.

It appears to me that the conduct of the administrators has fallen far short of what Derby County has a right to expect. However, there are no fans’ voices in this process. Fans have had no say in who the new owners of Derby County will be, and the administrators have failed time and again to communicate clearly with the fans.

Photo of Daniel Poulter Daniel Poulter Conservative, Central Suffolk and North Ipswich

I congratulate my hon. Friend on securing this debate and on her and other local MPs’ tremendous efforts and leadership in championing the needs and future of Derby Town. This fate could befall any football club or any large sports club. She reflected on the conduct of the administrator. Does she have some suggestions for the Minister about how the process could be improved? We all look at our local football clubs and do not want to see a similar situation occurring. If it does, we want to make sure that the situation can be remedied as quickly as possible.

Photo of Pauline Latham Pauline Latham Conservative, Mid Derbyshire

I thank my hon. Friend for that contribution. I must correct him: it is Derby County, not Derby Town. Yes, this is a problem that could happen to any club at any time and in later remarks I will address what could be done.

The fans and the club deserve so much better. Can the Sports Minister update us as to how best we can hold Quantuma to account? In particular, how would he expect administrators to consult and communicate effectively with fans during a sale process? Furthermore what, specifically, will the Sports Minister do to ensure that Quantuma is acting in the best interests of Derby’s fans? The club is not out of the woods yet and I have lost all confidence in Quantuma. Therefore, I call on the Sports Minister and the Secretary of State to take a close interest and ensure that the interests of Derby fans are represented in what are hopefully the very final stages of the sale to Clowes Developments Ltd.

My second point relates to the English Football League, which has an important role in saving Derby County. It is responsible for the particular set of insolvency rules that govern football clubs and for resolving disputes between clubs. Unfortunately, its apparent desire to take a back seat has been very damaging to Derby County. The well-publicised claims by other clubs made Derby a much less appealing prospect for potential buyers, particularly given the EFL’s refusal to confirm that those claims did not amount to football debts, which need to be paid in full. It was only after Chris Kirchner pulled out of the process two weeks ago that the EFL finally announced it would amend its position and become fully involved in the process of finding a buyer alongside Quantuma. That is far too late and should have taken place much earlier in the process.

In addition to assisting with the negotiations with interested parties, there are other key actions that the EFL can take that would help Derby County fans. First, it must lift the ban on Derby signing and re-signing players. With just weeks until the start of the season, Liam Rosenior has only seven players to choose from. The EFL must immediately allow Derby to sign players or at least to re-sign existing squad members to contract extensions. Secondly, fans have been squarely behind Derby County throughout the whole process. They have turned up to matches, and the grounds have been at capacity. However, fans have not yet been able to buy season tickets for next season, which not only hurts them but reduces the income for the club at a time when it is so desperately needed.

Derby County is a founder member of the English Football League, which has treated our club and our fans poorly, when it should be doing everything possible to ensure that the club is not liquidated and has enough players to compete in League One next season. What discussions has the Sports Minister had with the EFL to ensure that Derby fans are not punished, that they will be able to get season tickets for the upcoming season and that the club will be able to field a full side for its opening games? The EFL has been incredibly slow to step in and oversee Quantuma’s work. What assurances has the Minister received that it will be much more active in securing the future of one of its member clubs going forward?

My final point relates to the actions that we can take in this place. So much of the situation could have been avoided if the recommendations from the fan-led review into football governance, which my hon. Friend Tracey Crouch has championed, had been implemented already. The hon. Lady sends her apologies; she desperately wanted to be here and support Derby and its fans, but she has been held up.

Creating a new independent regulator for football governance requires primary legislation. An independent regulator is needed so that fans’ voices are heard throughout the process to ensure that the right people are in charge of football clubs. Football clubs are not just commercial assets or businesses; they are community assets of huge sporting, cultural, economic and historical value to the local area—no club more so than Derby County, an historic founder member of English football. It has fans not only across the region, but across the world, and its game days provide an economic boost to Derby and the east midlands.

All too often in recent years, we have seen the effect on the local area of a football club going into administration. My hon. Friend James Daly made the point eloquently during my urgent question in January about Bury football club. An independent regulator is desperately needed to ensure that the right people are in charge of football clubs and are meaningfully taking the views of fans into account. Please, for the sake of Derby fans, Bury fans and so many more, will the Minister confirm that that crucial legislation will be brought forward?

In conclusion, I have concerns—to which I would like the Minister to respond—about the administrators, the EFL and the fan-led review of football governance. I thank right hon. and hon. Members for their participation in the debate. I know that the Minister will be able to see the strength of support for Derby County here in the Chamber. I also want him to be aware that other colleagues would have liked to contribute to the debate, but cannot because they are Whips or Ministers. None the less, they are still local Members of Parliament who have also been involved. Many Members support our cause, because if these things can happen to a club such as Derby County—a founder member of the Football League—they can happen to anyone.

I look forward to the Minister’s response and hope for assurances that he and the Secretary of State will be taking a keen interest in the resolution of the administration over the next day or two—a resolution firmly in the interests of Rams fans.

Photo of Philip Hollobone Philip Hollobone Conservative, Kettering

The full-time whistle on this debate goes at 5.30 pm; the half-time whistle, when we switch from Back Benchers to Front Benchers, is 5.07 pm. The guideline limits for the Front Benchers are 10 minutes for Her Majesty’s Opposition, 10 minutes for the Minister and three minutes at the end for Pauline Latham to sum up the debate. So, for Back-Bench time until 5.07 pm, there will be a time limit of six minutes, which means that you all get to contribute. We are led to the kick-off by Dame Margaret Beckett.

Photo of Margaret Beckett Margaret Beckett Labour, Derby South 4:43 pm, 28th June 2022

It is a pleasure to take part in this discussion under your chairmanship, Mr Hollobone. I am particularly mindful of your observations about time. Not least because of the admirably comprehensive case made by Mrs Latham, I shall be extremely brief.

My purpose in contributing to the debate is partly to express a degree of sympathy with the Minister, who has had his ear bent extensively over the weeks during which these unfortunate events have taken place. I say that not least because, in the circumstances in which we find ourselves, and given the existing legislative framework, he might feel that there is a limit to what he can contribute. However, primarily, I want wholeheartedly to endorse the remarks of the hon. Member for Mid Derbyshire in calling for changes in the structures of football governance of the kind that have been recommended, which could make a considerable difference to how such events are handled.

I am one of the Members of this House who is not a lawyer, so it is always a bit of a surprise to discover to what extent, in handling legal matters, people are confined and restricted. It has certainly been a revelation to me to hear about the power that rested with the administrators and about the incapacity of any other player in this dispute to influence them in any way or even to gain reliable information.

I will not withhold from Members present that I for one—I am not alone in this—have grown impatient to a degree with the lack of information that has been made available. I recognise, of course, and I am very conscious of, the need for information to be properly held, maintained, respected and all of that. I do not need any lectures about that, but I would almost say that those who have sought on a cross-party basis to work with and support the club and its fans have on occasion been treated with contempt by a variety of people taking part in these discussions. That has been quite alarming, and I have every sympathy with those affected. The fans’ organisation has been very powerful and enthusiastic—and, on the whole, incredibly polite, given the level of frustration the fans and all of us have experienced. They have held the interests of Derby County close to their heart, and I am sure they have bitten their tongues on many an occasion when they would have wished to express themselves forcefully.

As the hon. Member for Mid Derbyshire said, it is a source of great regret to us all that Wayne Rooney has not felt able to stay with the club. There is no criticism of any kind implied in that remark; I think we all recognise the debt owed to him and honour his willingness to stay for so long and to see the club through so many difficult times. I share the concerns that have been expressed about the role of the EFL, which has not always acted as one might hope.

In the early days, when we first became involved as a cross-party group in trying to support the club to move forward, it was often with, and in conversation with, the EFL that we got bogged down and not really able to make progress, because of considerations other than the specific circumstances of Derby County. I will not say any more about that, except to pick up on what was mentioned a few minutes ago about fans not being punished. I certainly felt during a large part of these proceedings that there were those who had various reasons for resentment against Derby County, including some who had been involved with it in the past. That is perhaps understandable, but it is a matter for them. I certainly felt that there was a very real likelihood—a danger, as we said—right at the outset of our involvement in all this of Derby County being the inadvertent victim of people’s wish to penalise others for what they felt were their offences. That may or may not have been understandable, but the club and the fans were put at risk in a way that was inappropriate.

I share the view that we should look at football governance, and I hope the Minister will be able to tell us that that is something he and his colleagues can do.

Photo of Mark Fletcher Mark Fletcher Conservative, Bolsover 4:49 pm, 28th June 2022

It is a pleasure to serve under your chairmanship, Mr Hollobone, and to follow Margaret Beckett. I find myself wanting to agree with pretty much everything my hon. Friend Mrs Latham said in her opening remarks. I thought she gave an eloquent and helpful walk-through of the timeline we have experienced in Derbyshire. I have to praise her in particular for never accepting no as an answer and for demanding constant meetings and updates. I think she has spearheaded the campaign on behalf of her constituents, Derby residents and all Rams fans. I cannot thank her enough on that front.

I sympathise with fans of Derby County, because it has been an incredibly stressful and difficult experience. I find myself wondering who puts fans first. We have talked about the administrators, and perhaps they have a particular job. We have talked about the fan-led review, which I will return to later. I also look at the EFL and ask: why is it there, who is it for and what does it do? I remember that in the urgent question the right hon. Member for Derby South hinted in that direction, and I agreed with her at the time. What would be the Minister’s best defence for the EFL’s existence? It feels like it puts fans at the bottom of the list. It has been a constant issue to get information and comms from it, and to try to work out what it is there for. I look optimistically to the fan-led review and a new regulator, as mentioned previously, in the hope that we may see something.

Football clubs up and down the country keep coming back to financial security issues and poor ownership. When I have a spare moment, I love football. I want football to thrive. Our communities all love football and love watching it. But we see the same situation over and over again, of teams that have been around for a long time—as my hon. Friend the Member for Mid Derbyshire outlined, founder clubs that have been around forever are pillars of their community—being completely undermined by unfit owners or unsuitable financial arrangements. We find ourselves in a very difficult cycle.

I look to the Minister and plead, as have others, for progress on legislation. We are in the right place, and the Minister in particular deserves considerable credit, and not only for what he has done with Derby County—not an insignificant amount—but because a lot of the information we have had is as a result of his efforts. I do not think it is a secret that he has joined meetings from the car, going from visit to visit, to try to keep us up to date. I praise him for his involvement, but we are in a slightly unsustainable position. For those of us who love the beautiful game, it is one that we do not want and that it is difficult to defend.

When this debate was originally called for, the situation on the ground was slightly different from where we are now. Other than Wayne Rooney’s departure as manager, we have a greater sense of optimism about the purchase of Pride Park and the preferred buyer. That should be reflected in the situation. We may have cause for hope—I really hope that is true.

I come back to the fans, the EFL and the financial situation because, as my hon. Friend the Member for Mid Derbyshire outlined, the number of players that Derby has for next season, the lack of season tickets and the lack of certainty is unfair. The Rams need whatever is left of the summer to build up, because they are not and should not be a league one club. They did not deserve to be relegated last season—it was unjust.

I find myself in total agreement with my colleagues, but perhaps with a harsher emphasis on the fact that I do not understand what the EFL does, why it does it and who it is for. I hope that the Minister will take that on board.

Photo of Andrew Bridgen Andrew Bridgen Conservative, North West Leicestershire 4:53 pm, 28th June 2022

It is a pleasure to serve under your chairmanship, Mr Hollobone. I commend my hon. Friend Mrs Latham for securing this debate of huge local interest.

At this stage, the most constructive way to deal with this matter is to look at how we got here and what we can do to ensure that no club and no fans end up suffering the anguish that Derby fans have had to suffer over many months. We have to look at the historical actions of the English Football League, as mentioned by colleagues. There have been significant issues with its regulations. In 2016 an absolutely nonsensical regulation change relaxed the rules in order to allow clubs to sell their stadiums and still comply with the financial fair play regulations. I ask the Minister, what consideration did the English Football League give to the idea that owners that were looking to gamble would use this loophole to abuse the system, allowing them to spend huge amounts of money and separate the club from its stadium?

The history of football is littered with examples of the consequences of a club being separated from its stadium, and the financial problems that inevitably follow. Indeed, Wimbledon lost its entire club from the borough as a result of that loophole. The loophole has now been closed, but had the Derby County owner not had the option of selling the stadium in order to circumvent the financial fair play rules, then I do not think we would be having this debate today. There is no doubt in my mind that this presents a huge failing in regulation by the English Football League.

I turn next to the football creditor rule, of which Derby County also fell foul. Many weeks of the administration were spent dealing with legal claims against Derby County by Middlesbrough football club and, to a lesser extent, Wycombe Wanderers football club. During that time I spoke to both Her Majesty’s Revenue and Customs and the Middlesbrough football club owner about what, to many people, was a fairly opportunist and spurious claim that was undoubtedly causing huge problems for the sale of the club, because the claims for so-called cheating were categorised as a football debt by the English Football League, with a potential liability of over £40 million. That understandably made interested parties rather nervous, as no one can ever predict the outcome of any litigation with 100% certainty, and this was during an administration.

With the delays caused by this action, the value of the club decreased day after day and cost the creditors money, including the taxpayer through the liability to HMRC. This example will surely put pressure on the football creditor rule, a point about which I warned various regulators, including the English Football League, while we went through this very painful process.

My hon. Friend the Member for Mid Derbyshire has been particularly critical of the administrator, Quantuma. Some of her criticism is valid, and certainly the naivety and the failure of due diligence on the Kirchner bid was particularly erroneous. Quantuma has certainly been poor on communication, but I reserve some judgment. The administrator will be able to put its side of the story only when the Derby County sale is successfully completed and explain why certain actions had to be taken. We should be cautious about pre-judging that and give Quantuma the opportunity to defend itself.

However, it is certain that many Derby County supporters have suffered considerable distress over the past nine months or more, and many creditors have been left out of pocket. With a resolution looking likely, it is important that Members of this House take the necessary action to ensure that the Government do everything they can to learn from this painful process so that the same mistakes are not made again. I wish Derby County and its many supporters across the midlands the very best for the future, and I hope the new owners will cherish it.

Photo of Nigel Mills Nigel Mills Conservative, Amber Valley 4:58 pm, 28th June 2022

It is pleasure to follow my hon. Friend Andrew Bridgen, and I congratulate my hon. Friend Mrs Latham on securing the debate.

If someone had told me 30 years ago, when I watched Notts County cruelly deprived of a championship play-off place by a late own goal at the old Baseball Ground, that I would have some role to play in trying to save the club, I might have expressed some doubt, but it is at this sort of time that the football family comes together. The only reason we have rivalries is because our rivals stay in existence; no one wants to see any club go out of business, least of all a club with the size and history of Derby County.

If I knew 20 years ago, when I watched my team, Notts County, spend three seasons in administration, that we would still have situations where owners could recklessly gamble the future of a club by overspending, in the hope of promotions that do not turn up, and that the club then ends up in a lengthy, expensive administration with preferred bidders who turn out not to have the money they said they had and those deals never quite complete, and we end up with millions of pounds still owed to HMRC, I would not have believed that we would not have found a way of fixing those problems. However, here we are again, with the same situation of a club effectively allowed to overspend, despite financial fair play rules being introduced in the meantime, and somehow racking up tens of millions of pounds of debt to HMRC when the Football League had procedures in place that meant if it did not pay one month’s pay-as-you-earn or one quarter’s VAT, it would receive a transfer ban so that debts could not be racked up to that size. That was to prevent that sort of situation.

I know that covid was one of the excuses, but somehow we have all of those situations still in play. That does not suggest that the financial regulation of football is anywhere near where we want it to be. We want that regulation so that we do not risk losing clubs in this situation because they have been allowed to recklessly overspend in an attempt to get a promotion to the promised lands and fortunes of the premier league, thinking, “Well, somebody else will pick up the bill at the end of the day.”

What thoughts does the Minister have on how we can further strengthen the rules that were meant to be in place to stop this, so that, finally, we can say that it cannot happen again. We could actually get the real-time monitoring in place. We could get advance approval of a budget. We could get advance approval of decisions. Perhaps we could say something like, “If you want to sign a player on ridiculously high wages, you must put the money in the club to pay the transfer fee and those wages in advance before the Football League will sign off the transfer”, so that the money is there to pay those wages all the way through to the end of the contract, and we do not find out, halfway through, that they cannot afford those players’ wages after all.

Perhaps such ideas should be in place to ensure that clubs have the money before they embark on ridiculously extravagant transfer operations or the situation we saw with Derby County. Otherwise, we will have all of these warm words and will slightly tweak a regulator, or get a new one, but fundamentally there will always be this temptation, and supporters will always want it—“Oh, if only we could just sign a striker in January, we could get in the play-offs this year and get promoted.” They then end up spending £25,000 a week on wages for a four-year contract that they cannot really afford because of the £100 million bonus. The temptation will always be there.

As a football fan, I want the dream that some very rich person will come and buy my football club and get me four promotions straight to the premier league, and that we can be in the champions league. That dream has worked for Man City, Newcastle, Chelsea, and for Blackburn a few years ago. We all want that dream, I suppose, so we do not want to stop any chance of somebody coming along and putting loads of money in. However, we must ensure that it is done in a sustainable way, and that it is that person’s money at risk, not the future of the football club. I would urge the Minister to focus on that, and on how we can get the regulations working, whoever the regulator is.

I am afraid that these situations will never be easy, because we have the cold, hard reality of insolvency law coming into play with the emotion of football, and those two things will never work in that situation. If we are being frank, the mess that Derby County was left in would have sent any ordinary business into bankruptcy. The only reason football clubs survive is the loyalty, history, tradition and community links that they have. Derby was unviable as a business, given the amount of debt it had racked up, which was almost more than its underlying value. That is why we must get this right.

Perhaps one other lesson we have learned from this process is that we do not want litigation getting into sporting competitions. We have had the Middlesbrough and Wycombe claims against Derby, and the rumours that Burnley or Leeds were going to take legal action against Everton because of its overspending. We want to know who has won the title or been relegated on the last day of the season, not four years later at the end of a court process.

I urge the Minister to look urgently at ensuring that, whoever the football regulators are, they have the real-time monitoring enforcement of the rules in place and can take quick decisions. When these issues come around, they should be resolved quickly, not several seasons later, issuing a points deduction that means not that Wycombe stays up, but some team three seasons later, which was not even in the league at that time or was in relegation trouble. It is completely unfair for those sanctions to come in years and years later. As we saw with Derby, the point deductions that got it relegated this season were for offences that were seasons and seasons before. It makes a mockery of the integrity of sporting competition if we cannot get the financial aspects of these rules right, and not only to protect clubs but to ensure that we have an actual competition with a fair result at the end of the season.

Photo of Jeff Smith Jeff Smith Shadow Minister (Digital, Culture, Media and Sport) 5:04 pm, 28th June 2022

It is a pleasure to see you in the Chair, Mr Hollobone. I congratulate Mrs Latham on securing the debate and very clearly setting out the history and importance of this issue, as well as the pressure of the deadline; I think she used the phrase “one minute to midnight”, and that is how it feels with the deadline coming up tomorrow. Both the hon. Lady and my right hon. Friend Margaret Beckett set out the concerns and frustrations of people in Derby and fans of the club. They particularly mentioned the issues with the EFL’s behaviour, as well as that of the administrator; we hope that after tomorrow we will be able to look at those questions with more time to judge them. They also expressed praise for Wayne Rooney, and I echo that praise, although as a Manchester City fan I do so through gritted teeth—a Manchester City fan living the dream, as was said earlier.

We also send our best wishes to Liam Rosenior and the limited band of players he now has to work with. We wish them well for the new season, because the last 300 days have been a tough time to be a Derby County fan. A club such as Derby is the heart and soul of its community, a source of pride and identity for its supporters, and to see your club in administration and on the brink of going out of business—to see your team relegated, not because the players were not good enough, but because of points lost due to bad administration—is tough.

For hope to be raised, as it was when a deal seemed to have been struck with Chris Kirchner, and then dashed as that deal fell apart, is also tough. The uncertainty that has prevailed until recently, when the David Clowes bid was accepted, has been a very difficult time for supporters to endure. Let us hope that the fans’ ordeal is now coming to an end and that the deal goes through tomorrow. It is very positive that Mr Clowes is already involved in actively supporting the club. He is a genuine supporter of Derby County, and it is good news that he now owns the stadium, Pride Park. As we heard from Andrew Bridgen, it is never good when the ownership of a club and its stadium are separated.

We all hope that Mr Clowes will be the owner that Derby needs, and will be able to stabilise that club and return it to its former glories, because it is hard to overestimate the importance of a football club to its local community. The loss of a club would leave a hole in people’s lives, which is why it is so important that we protect our football clubs with a governance framework that safeguards those clubs for future generations. That is why I join other right hon. and hon. Members in urging the Government to move quickly and bring forward detail on the future of football governance, because this situation is just the latest crisis that demonstrates that we cannot afford to wait. It is yet more compelling evidence that the Government need to act quickly to implement the recommendations of the fan-led review and ensure that football has a governance regime that is fit for purpose, safeguards our great clubs and our national game, and—as the hon. Member for Mid Derbyshire pointed out—gives fans a voice.

On the subject of fan and stakeholder voices, Tracey Crouch —sadly, she is not present today—did a fantastic job of consulting all the stakeholders in football to set out a recipe for the future of football. Her set of proposals would put much-needed independent regulation in place, protect the heritage of our clubs and, vitally, create a structure of financial and governance oversight that would mean club owners would not be able to risk the future of their clubs in pursuit of success.

I remind Members that when the football review panel led by the hon. Member for Chatham and Aylesford met Mel Morris, the previous owner of Derby County, shortly after her interim recommendations were published, that panel asked him specifically whether he thought the club would be in a different situation if an independent regulator and real-time financial monitoring had been in place. He said, “Yes, without a doubt.” To me, that shines a light on the need for independent regulation and a governance structure that is fit for purpose. Nigel Mills is absolutely right: we do not want football to be ruled by litigation in future

The case is clear, and the Government have accepted that case and the need for change—I have welcomed the Minister’s assurances on that point on a number of occasions—yet the Bill is delayed and a White Paper is due. I appreciate that the Government say that it is a complicated issue, which it is, and that we need to get the details right. However, the longer we leave it, the more likely it is that another club will be in crisis like Bury or Derby, so I seek some reassurances from the Minister. When are we likely to see more detail and the White Paper? Importantly, what is the timescale after that for implementation? It is looking increasingly unlikely that we will see a Bill before the next election, whenever that might be. I hope the Minister is able to correct me on that, but it just feels and looks unlikely at this stage, and fans and stakeholders in the game are all frustrated at the slow progress on this issue. We need to see action to safeguard our clubs and to make sure that the situation with Derby does not happen again.

I want to finish by wishing Derby good luck. We all have our fingers crossed that the deal will go through tomorrow and give their fans some comfort that the club is now safe, and that they can look forward to the new season with optimism. Let us make sure that this does not happen to any other clubs in the future.

Photo of Nigel Huddleston Nigel Huddleston The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport 5:10 pm, 28th June 2022

It is a pleasure to serve under your chairmanship, Mr Hollobone. I thank my hon. Friend Mrs Latham for securing this important debate on the administration of Derby County football club, and I thank all of those who have participated, including my hon. Friend Dr Poulter, Margaret Beckett, my hon. Friends the Members for Bolsover (Mark Fletcher), for North West Leicestershire (Andrew Bridgen) and for Amber Valley (Nigel Mills), and Jeff Smith.

It is also important to stress, as my hon. Friend the Member for Mid Derbyshire did, that several other colleagues have played very close attention to the club’s situation, particularly my hon. Friends the Members for Erewash (Maggie Throup), for Derby North (Amanda Solloway) and for South Derbyshire (Mrs Wheeler), and Mr Perkins, who have had frequent conversations with me, my officials and others. As we get to the final stretch, it is important that our constituents are aware of how much time, attention and effort has been put in by all the right hon. and hon. Members I have mentioned, because they recognise how important the future of Derby County is to their constituents. I applaud everybody I have mentioned for their efforts, which show the House at its best. Along with all Members present, I am hopeful about the recent positive developments, and I hope that the matter will soon be resolved to the betterment of the club. I hope that any future parliamentary engagement we have about the Rams will not be in the face of such jeopardy.

Like many Members of this House, particularly those who have joined today’s debate, I know that football clubs are at the absolute heart of our communities, and it is incredibly worrying to see them at risk. That is why the issue is so high on the political agenda here in Parliament and in so many constituencies, especially when there are significant shocks to clubs’ financial security. Match days are days of pride and community and of bringing people together, and the ongoing success of clubs affects the local economy and the wider finances of the football ecosystem overall. The Government understand the importance of this, as does the whole House. That is why we have had the fan-led review of football governance, which has received strong support from all parties.

We are working at pace on the White Paper, which will set out further details on how we will implement wide-ranging reforms in this area. My opposite number, the hon. Member for Manchester, Withington, has asked me on many occasions to confirm when it will be published. He knows that it will be in the summer, although there is often parliamentary debate about when the summer starts. I can assure him that my officials are moving at pace, and I appreciate that he recognises that this issue is complex. It is one thing to say, “Let’s set up a regulator,” but the devil is in the detail. The scale, scope of responsibilities, location and financial support of the regulator all need quite a lot of work, but we are working on them.

Turning to Derby County football club, the situation has for too long remained worrying for fans, the local community and the football ecosystem alike. I know that this environment of uncertainty is frustrating for all stakeholders. That the club has kept its focus, and that the fans have been so loyal despite this uncertainty, is a huge credit to them. Along with colleagues, I praise Wayne Rooney, who confirmed this weekend that he will be leaving the club with immediate effect, one year earlier than planned. I pay tribute to his efforts and those of the wider team on and off the field.

No one wants to see a founding member of the Football League in administration and facing threats to its survival. I am sure that the team’s efforts this season have made an extremely positive contribution to securing this historic club for years to come, for the Derby County fans of the future. We remain clear that the governance surrounding the administration of Derby County is a matter primarily for the English Football League, the administrator and the club. I thank the right hon. Member for Derby South for understanding that there are things I can control and have influence over, and other things that I cannot. These are self-organising private sector entities that are making commercial decisions.

However, as all hon. Members have said, this is an issue that everybody is interested in. The Government take an interest in the very real concern of Derby County fans, particularly because the club has endured such a long period of risk and uncertainty—so long, in fact, that it has recently begun to threaten the club’s place in the EFL next season, and there are potentially greater ramifications for the club as a whole, as several hon. Members have pointed out. For that reason, I have been receiving regular updates for some time. Most recently, I convened the EFL, the administrators and many hon. Members here today to receive reports on progress. I hear hon. Members’ comments about the frustrations they have experienced with the EFL and the administrators. I will ensure that I communicate those frustrations to those stakeholders.

It would be inappropriate for me to comment on all the points that my hon. Friend the Member for Mid Derbyshire made, but I will always call on all stakeholders to be pragmatic, act at speed and put the interests of fans at the heart of everything they do. As several hon. Members said, I have regularly called on the administrators and EFL to keep MPs and other stakeholders updated. I specifically said, “If you don’t, I will be called to the House in Westminster Hall debates and others to answer on your behalf,” and here we are, so that point is particularly relevant. I am somewhat disappointed to hear the frustration of many hon. Members, who said that they do not believe they were appropriately updated. There are potentially lessons to be learned for the future if such a situation were to arise again.

Similarly, I have had regular engagement with the EFL, and I will pass on hon. Members’ comments. The EFL has many stakeholders, and of course its responsibility is not to support one club, but to work on behalf of all its members. That sometimes causes contradictions and conflicts that are difficult for the supporter of any individual club to understand, but if we were in a slightly different situation, mindsets might change. As I say, I will pass on all those comments.

My hon. Friend the Member for North West Leicestershire raised the Middlesbrough issue, which was obviously resolved by the clubs Middlesbrough and Derby County themselves. I am afraid that I do not necessarily agree with his suspicions about ulterior motives. I was glad that the situation was resolved, and I believe that the EFL acted in good faith. There were also concerns about legal issues, and they were matters to be resolved directly between the clubs. As I say, I will pass on the concerns that hon. Friends and others raised.

The collapse of the purchase by the previous preferred bidder, Chris Kirchner, was a very difficult moment for the club, but I was reassured that other parties remained interested in it. The EFL also set out that there were a number of ways in which the club could continue in the 2022-23 season, with or without a long-term buyer in place. However, there have been numerous developments in the past week, which I hope are broadly welcomed by the fans. As we speak, Clowes Developments has issued a loan to the club to demonstrate the funding necessary to start the next season. Its chair, David Clowes, has purchased the stadium and had an offer for the club accepted by the administrators. As hon. Members have noted, there are hopes that the purchase of the club could be completed this week, and I certainly hope that that will be the case.

Of course, the sale raises questions about the wider financial sustainability of football, which was focused on by my hon. Friend the Member for Amber Valley. I can give him the reassurances he was looking for. If everything was right in football, and all the regulatory frameworks working as they should, we would have had no need to implement the fan-led review. We did so because there were failings across the board in football. Financial sustainability and financial regulation are at the heart of the role of the regulator, to do precisely the things that my hon. Friend called for. The finances of too many clubs are unsustainable. Consistently spending greater than 100% of revenue is not a viable long-term business model, but for some reason that seems prevalent in football. Ongoing financial monitoring will be a key role of the regulator. The Government accepted all 10 recommendations made by my hon. Friend Tracey Crouch. As I have said, we are proceeding at pace with the White Paper, which we will provide more information about soon.

Our plans amount to very significant reform in our national game, and our vision sets a clear direction for that reform, which will reduce the likelihood of financial distress and make football more resilient and sustainable in the long term. I understand that the conversation with Mel Morris was very stark. He did say that, had we had the proposed system in place, Derby County might not have been in the situation it finds itself in now. I think that probably applies to several other clubs that have been in financial distress.

We will publish the White Paper, setting out more details on the breadth of changes that we will make via legislation. I am fairly confident that we will get the support of most, if not all, of the House for that legislation. At the core of those reforms will be an independent regulator for English football. As I have said, the regulator will focus on financial sustainability, overseeing a licensing regime, which covers the top five leagues in English football. We will also act on our view that the current owners’ and directors’ tests do not go far enough and must be strengthened. That will include enhanced checks on the source of funds and the strength of business and financial plans.

The Government are fully committed to reforming football governance, to enable a long-term, sustainable future for the game. Accepting all the strategic recommendations within the review is the next step to do exactly that, and will represent a wholesale change in the way in which football is governed in England. In the meantime, the Government will continue to engage closely with the EFL, the administrators and, of course, hon. Members, until it is confirmed that this fantastic club has been saved. I hope to hear very good news very soon.

Photo of Pauline Latham Pauline Latham Conservative, Mid Derbyshire 5:23 pm, 28th June 2022

I thank the Minister for his remarks, and I look forward to seeing the proposed legislation. I hope that it will go a long way to solve the problems at Derby County. I also thank right hon. and hon. Members who have contributed to the debate. It is interesting that there are not many debates where Members on both sides of the House completely agree on what has gone wrong and where we need to move forward. That is because this is more important than party politics. It is about the heart of Derby and the heart of Derby County. Even Notts Forest fans would like Derby County to continue because, if it does not, who will they hate in future?

We are not having this debate just for the fans; it is for the whole community of Derby. The fans are very important and have been left out, but this is about the economy of the city of Derby and the jobs that big clubs such as Derby County bring. Those poor, uncertain people who work at the club still do not know, and have not known for months, whether they will have a job at the end of this. It is important that we do not forget those people, who in some instances have given many years of their lives to Derby County. That is so important, because they are relying on the future of Derby County and its new owner. I sincerely hope we will see the solution in the next day or so. If we do not, I really do not know what Derby will do.

I have to say that I never thought that my time in Parliament would end up with me knowing so much about football and even leading a debate on it. It is not my specialist subject, although it has become much more specialist than I ever thought it would.

David Clowes has come in at the last minute and acted quickly and honourably. I do not know him personally, although I did know his father. However, I know that, as a fan, he has a drive to get this issue sorted and to get it right. It is really important that he is allowed to do that so that he can bring Derby County forward and ensure we continue to be successful and go back up into the next league, which is what Derby County fans want. They want us to be up, not down. They would like to be further up still, as we were in the days of our former manager. It is really important for Derby that we are successful.

I worked for Midland Bank years and years ago. I remember that, if we lost on a Saturday, people were depressed on the Monday morning at work, but if we won, the whole atmosphere was different. It is no different now. This is such an important event for Derby to be successful—having David Clowes at the forefront, as a local person and a fan who does have the money. That is an important thing to recognise. I would like to wish him good luck. I also wish enormous good luck to the interim manager, Liam Rosenior, who has a huge job to follow after Wayne Rooney, who has been so loyal and so fantastic. I am really sad to see him go.

Thousands of my generation go to see Derby County, but it is not just them—it is my children’s generation and my grandchildren’s generation, too. They all turn up to fill that stadium week after week after week, even during this time of uncertainty. It is important that Derby County survives. I know that Steve Bloomer continues to watch over Derby County.

Question put and agreed to.

Resolved,

That this House
has considered the administration of Derby County Football Club.

Sitting adjourned.