PARLIAMENTARY DEBATE
English Football League Governance: Derby County FC - 18 January 2022 (Commons/Commons Chamber)
Debate Detail
I turn to Derby County. The situation is worrying for fans, the local community and football alike. No one wants to see a founding member of the Football League in administration and facing threats to its survival. Of course, Derby County has won silverware in the past, and I pay tribute to Wayne Rooney for his sterling work as manager this season—I never thought I would hear myself saying those words in the House of Commons.
We should be clear that the governance surrounding the administration of Derby County football club is a matter for the English Football League, the administrator and the club. However, the Government take a close interest and are receiving regular updates. The sports Minister spoke to the English Football League last night to understand exactly what is going on, and to urge all parties involved to take a pragmatic approach to securing the future of the Rams. I call on the English Football League, the club and the administrators to play an active and urgent role, within their remits, in seeking to facilitate an urgent solution to the situation.
The EFL has asked the administrators for details of a funding plan that will enable the club to complete this season. The administrators have tabled some options that are available to them, and the EFL has extended the deadline for proof of funding, in line with its regulations and policy. I understand that some bidders are interested in purchasing the club, and I very much hope that those conversations reach a fruitful conclusion as quickly as possible. Yesterday, the EFL issued an extensive and transparent update on its handling of the matter, which I commend to the House.
Of course, this matter raises questions about the wider financial sustainability of football. The fan-led review made a number of proposals directly addressing how to prevent clubs ending up in such situations, and the Government are considering them carefully. We have however endorsed in principle the review’s primary recommendation, which is that football requires a strong, independent regulator to secure the future of the national game. In the meantime, the Government, and my hon. Friend the sports Minister in particular, will continue to engage closely with the EFL and Members—particularly those who represent the fine county of Derbyshire—and call for urgent pragmatism from all parties involved, so that they find a solution quickly and save this fantastic club.
These clubs are so much more than businesses. They represent the heart and soul of communities, nowhere more so than in Derby, and they are huge drivers of economic growth and part of the cultural fabric of our country. Can the Minister assure me that in his discussions with the EFL he has been reassured that it is acting in the best interests of Derby County’s fans?
I understand that there are ongoing legal proceedings between Derby and other clubs, but the reason the potential takeover cannot happen is that the EFL is refusing to rule on whether those claims could constitute football debts—a matter for EFL rules, not for the courts. Will the Minister confirm why the EFL is refusing to rule on the matter? If the EFL cannot or will not rule on it, Derby County believes that it could rely on new insolvency rules, approved by this Parliament, to exit administration. Will the Minister please confirm that he will investigate why the EFL’s insolvency guidelines are not up to date, which is causing such difficulties for Derby County?
Furthermore, although the EFL’s delay is effectively holding up the takeover, it appears to have set an arbitrary deadline of 1 February, at which point it can remove Derby from the league. Is the Minister convinced that the EFL is acting fast enough to resolve the football debts issue before the deadline, or will it extend the deadline accordingly?
Finally, I would like to mention the administrators of the club. Fans have no accountability mechanisms over those individuals, who themselves have no connection to the club. Will the Minister please assure me that he is in constant contact with the administrators to ensure that they are acting in the fans’ best interests and as quickly as possible?
The sports Minister has been in close contact with the English Football League. We want to see it working urgently, pragmatically and rapidly to resolve the outstanding issues standing in the way of a takeover by a new owner, who we hope can invest the money needed to turn the club around. The sports Minister is pressing the English Football League very hard on these points; I am sure that he will do so again and that the English Football League will be listening to our proceedings this afternoon, hear the message from this House and act accordingly.
On my hon. Friend’s final point, I am afraid that I do not know whether the sports Minister has spoken to the administrators yet, but since she has raised the point so forcefully and eloquently, I will certainly ask him to do so as soon as I leave the Chamber.
We appreciate that the specifics of the current situation at Derby County are complex and that there are a number of parties involved—the EFL, potential buyers, administrators and other clubs making claims to legal challenges. Labour urges all those parties to work together to sort this out. But even bearing that in mind, may I urge the Minister and the sports Minister to do everything in their power to secure the club’s future for the sake of fans, players, staff, the city and the wider community?
The question that many fans will be asking is “How did we get here again?” The review by the hon. Member for Chatham and Aylesford has already put forward a strong set of recommendations that would overhaul football governance for the better. Introducing a new statutory independent regulator requires new legislation, but a shadow regulator fulfilling the same function could be introduced straightaway. Such a regulator could have flagged up the issues that put Derby County in jeopardy long before we got where we are today.
The Government have said that they will respond fully to the review’s recommendations in the spring, but does the Minister accept that this latest crisis demonstrates that that is just too long to wait? Is the crisis not 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 safeguards our great clubs and our national game?
I would add two points. First, I would not tar all football owners with the same brush. Those clubs I know about, particularly Palace, have been well managed, so it cannot be said that football owners as a whole conduct themselves badly. Secondly, the problems at Derby County are long-standing, and long predate the fan-led review. We are moving at pace to make sure that the fan-led review is implemented, and that work will happen as quickly as possible.
My inbox is full of Rams fans who are understandably concerned by the perilous situation the club is in. The football review panel met Mel Morris near the end of the process and after the interim recommendations were published, and I asked him specifically whether he thought that the club would be in a different situation if an independent regulator and real-time financial monitoring had been in place. His answer was, “Yes, without a doubt.” Given that clubs think that the recommendations in the review would lead to greater sustainability in football, will the Minister—I appreciate he is standing in for the sports Minister—give a bit more detail about the pace at which implementation of the report’s recommendations is being considered and will be responded to? Many would argue that they are urgently needed so that no other club and its loyal, committed, lifelong fans will suffer the threat of ceasing to exist.
On the timing, a number of details clearly need to be worked through. The fan-led review’s recommendations were very detailed, and primary legislation will be required. As my hon. Friend will know, the Government need to work through a number of pressing legislative priorities. I cannot make a commitment on behalf of my colleague the sports Minister—it would be wrong to commit a fellow Minister in respect of his portfolio—but I will ask him to speak to my hon. Friend, as well as to my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch), to discuss the timing.
The Minister has spoken about the problems that Crystal Palace had previously, but one thing about this situation is different: the threat of legal action from Middlesbrough and Wycombe and the impact of commitments that may exist in the future on the possibility of a takeover happening now. Will the Minister tell us what the sports Minister is doing to ensure that Middlesbrough and Wycombe’s claims against Derby County’s previous owners do not prevent the club from being purchased? When clubs have debts in the future, they go out of existence altogether, as we saw with Glasgow Rangers and Bury; if clubs have debts in the past, it can be resolved. That is the key issue we need to hear about today.
On the other football clubs, legal proceedings are currently pending, but I think a pragmatic solution should be found. I know the sports Minister has been in touch with the English Football League about finding a pragmatic solution. There were similar issues with Crystal Palace 11 years ago—I think it was to do with Lloyds Bank—and a pragmatic solution was found; I expect the same pragmatism to be displayed in this situation.
Finally, the fan-led review touched on some of the issues in respect of debts. When that review is implemented, it will address the issues that the hon. Member raised.
I know the Minister is a keen football fan; does he, like me, remember how close Middlesbrough came to going out of business until Steve Gibson saved the club a few decades ago? Would it not be ironic if Steve Gibson’s claim, which many of us think is probably a stretch, was what now pushed Derby County over the edge? Will the Minister urge Middlesbrough and Wycombe, in the spirit of football solidary that fans are showing, not to press their claims and to let new owners be found? Does he agree that the Government may need to act because we cannot have, in our elite professional leagues, one club suing another because it does not like the outcome of the season? That is no way to have a sports competition with integrity. If we are going to have legal cases to decide things after the fact, we will not know what the final title decider would have been until the years go by.
This is really just another example of the complete mess that is football finance. Why are the rules about administration in place? It is because a few years ago Leicester City deliberately went into administration to get rid of its debts to enable it to be promoted to the premiership at the expense of Sheffield United. It is a complete mess. There are two issues that arise: get the Crouch fan-led review in place as quickly as possible to sort out football finances; and in the meantime get the EFL—I have some sympathy for it because of the difficulties it faces—to give a proportionate and proper response to Derby to make sure that club survives.
“is happy to be realistic in its expectations in order for Derby County to exit administration.”
I encourage the Minister to encourage the EFL to encourage the administrator to engage with Middlesbrough, which is very realistic about how it can assist in this process, but at the moment is being met with silence.
It is time for the English Football League to show that it cares, and not do what it did with Bury. It destroyed a club and nearly destroyed a town. I am not underscoring that; that is how much of an impact it had. I urge the Minister to do whatever is necessary to protect the fans of Derby. I have seen on a daily basis in my constituency what such a situation does to the fans of a football club who care about and love their club, and care about and love their town. That is bigger than all the rules in the world. The situation has got to be sorted out. Please do everything possible to protect Derby fans and please do not make the mistakes that happened with Bury.
We have had statements at different times, but in the future on such matters, which are of such importance to people, can we ask the Government to try to find a way to work with the Opposition, either to delay the Bill Committee or to delay the statement, so that the Minister can be here to respond? For the sake of my constituents, who are incredibly worried about the future of Derby County FC, I feel we would have had a different response if the sports Minister had had an opportunity to respond. I do not mean to be mean to anyone, but in the future can the Government and the Speaker work together to try to ensure the relevant Minister can be here to respond on matters of such importance?
I thank the Under-Secretary of State for Digital, Culture, Media and Sport, my hon. Friend the Member for Croydon South (Chris Philp), for standing in for me. As I hope I have proven over the past two years in this role, I am always open to discussion with any colleagues, on any side of the House. I have had many conversations with colleagues relating to Derby County FC, and I would happily speak to the hon. Member for Chesterfield (Mr Perkins) . There is nothing party political about the issue and we all need to work together.
We should now have the presentation of a Bill, but I do not see the Member present, so we will move on to the ten-minute rule Bill.
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