Independent Football Regulator

Wednesday 28th October 2026 Lords Chamber

Question

15:37

Asked by

[Lord Harlech]

To ask His Majesty’s Government what oversight they intend to exercise over the budget of the Independent Football Regulator following its proposal for a levy of £20.3 million a year, around double the amount originally estimated.

[The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Baroness Lloyd of Effra) (Lab)]

My Lords, the Government are proud of the success of football in this country, so I start by congratulating England captain Harry Kane on winning the Ballon d’Or this week.

The Independent Football Regulator, led by its board, rightly sets its budget independently of government. The regulator is currently consulting on its proposed levy, and we encourage football to engage fully so that the levy is shaped by those paying it. The proposed levy represents 0.2% of football’s annual revenues of £9 billion last year. As a public body, the regulator is subject to standard guidance and controls and will lay its annual report before Parliament.

[Lord Harlech (Con)]

My Lords, the regulator’s proposed operating costs have doubled already, and it is not even operational yet. That is together with a set-up cost of £45 million over 10 years, which was in no part of the original estimate. These are exactly the kind of problems that these Benches raised during the passage of the Bill and we were admonished, in this House and in the press, for slowing the Bill down. What powers do the Government hold to challenge the regulator’s budget before the levy begins next season and how will Parliament be able to scrutinise those costs once central funding ends?

[Baroness Lloyd of Effra (Lab)]

As I mentioned before, the proposed levy represents 0.2% of football’s annual revenues of £9 billion last year. We believe that this is affordable by football. The budget is set by the regulator as an independent regulator. It will lay its report to Parliament to allow scrutiny of that. The State of the Game report, published only recently, underlines the need for change and for this regulator.

[Lord Grantchester (Lab)]

My Lords, along with the Prime Minister, I am proud to declare my interest in and support for Everton Football Club. To clarify how costs have risen, can my noble friend the Minister outline the action the independent regulator has taken to establish itself since its creation last year? It may be helpful to understand what engagement the regulator has had with every regulated football club about this proposed levy.

[Baroness Lloyd of Effra (Lab)]

My noble friend is right to highlight the action that has been taken since the regulator has been set up. The regulator has already published its State of the Game report, begun testing owners, directors and senior executives, protected club heritage by ensuring that fans are consulted on key decisions, and issued 10 consultations alongside final rules and guidance. The regulator’s CEO has written to all clubs ahead of the levy consultation, which will run until 4 December, and we encourage all clubs to respond and help shape the methodology that will determine the levy they pay.

[Lord Addington (LD)]

My Lords, we are looking at an industry that has 116 units being regulated, generates £9 billion and has 94% of its units operating at a loss. Can the noble Baroness think of any industry that is actually calling out more for regulation?

[Baroness Lloyd of Effra (Lab)]

The noble Lord makes a point that I heartily agree with. The State of the Game report underlines the issues with financial stability, governance and the structure, and underlines the need for the Independent Football Regulator to operate and use the powers it has in the three objectives of club financial soundness, working on the systemic financial resilience of the whole football pyramid, and safeguarding club heritage for fans.

[Lord Londesborough (CB)]

My Lords, let me put this £20 million into context. Although we have heard that the top five tiers of the football league generate some £9 billion in annual revenues, almost every club is deep in the red, losing money year after year. As we know, one club, Man City, has been found guilty of 114 financial breaches totalling £900 million over a period of eight years—eight unregulated years. That is the point. Does the Minister agree that the £20 million cost of the new regulator may well be over budget but is hardly excessive?

[Baroness Lloyd of Effra (Lab)]

I absolutely agree with the point that the noble Lord makes. The structure and methodology that the Independent Football Regulator is consulting on puts the burden, as it were, on Premier League clubs with a higher cost. National League clubs will pay much less per season because it is a revenue-based model.

[Lord Hayward (Con)]

My Lords, will the Minister please write to the House, and particularly to my noble friend Lord Harlech who asked the Question, explaining how the Government managed to produce an impact assessment that is already more than 100% inaccurate? At the same time, could she please write to the smaller clubs that are going to face the costs associated with this regulator and apologise to them for the answers that were given so often during the passage of the Bill that they would not face more than the £10 million that was identified in the impact assessment in the first place?

[Baroness Lloyd of Effra (Lab)]

I stand to be corrected by noble Lords who were here during the initial phases of the Bill, but I believe that the impact assessment was published under the previous Government. Indeed, that impact assessment was heavily caveated. It was decided during the passage of the Bill setting up this independent regulator that it should set its own budget, and that is the way that we have proceeded.

[Baroness Taylor of Bolton (Lab)]

My Lords, does the Minister agree that the Independent Football Regulator has shown great willingness to engage with Members of this House and the other place, and that that is quite unusual for many regulators? Does she also agree that his interventions so far have been constructive in saving at least one football club?

[Baroness Lloyd of Effra (Lab)]

My noble friend is right to highlight the engagement that the Independent Football Regulator has had, although I stress that the regulator remains independent and is taking operational decisions, as he makes clear.

[Lord Evans of Rainow (Con)]

My Lords, I associate myself with the Minister’s comments on Harry Kane and congratulate him. From Leyton Orient on loan to the Ballon d’Or—what a player and what a role model for our young people.

During our debates on the Bill, noble Lords on this side of the House repeatedly raised concerns that this regulator would not be light touch, as the Government claimed, and that it would be captured by scope creep. Given the levy rate and the larger budget recently announced, does the Minister agree that these Benches were right and the Government were wrong?

[Baroness Lloyd of Effra (Lab)]

I cannot agree with that. State of the Game underlines the need for reform, the parlous state of the financial sustainability, the governance failings and the systemic resilience of the game, and it underlines the need for action. The Independent Football Regulator has a tightly defined scope. It has three objectives and it needs the resources to operate as it does, but it will do so in the most efficient and expedient way.

[Lord Razzall (LD)]

My Lords, in the light of the Minister’s answer on the earlier question, will she confirm that this means that the Government and the Prime Minister will not attempt to intervene in the Manchester City story that the noble Lord, Lord Londesborough, mentioned, thereby avoiding the resignation of the regulator?

[Baroness Lloyd of Effra (Lab)]

The case involving Manchester City is an independent process concerning a breach of the Premier League’s rules. It is not for the Government to intervene, particularly as we know that an independent commission is currently considering the appeal lodged by Manchester City Football Club.

[Baroness Debbonaire (Lab)]

My Lords, as my noble friend the Minister mentioned, but it is worth repeating, the cost of the regulator is 0.2% of the value of a £9 billion industry, but the clue is in the name: it is an independent regulator. It was originally a Tory Bill but during the wash-up it failed to get through before the election. I am proud of the fact that a Labour Government have brought this in. I am sure that the noble Lord, Lord Harlech, like me, has read all 245 pages of the State of the Game report—as every noble Lord should; it is weekend reading. It provides crystal-clear evidence of why we need this regulator. It will be getting on with licensing in the coming weeks, which is a huge piece of work. I invite my noble friend the Minister to congratulate the Independent Football Regulator and the Secretary of State on bringing it in.

[Baroness Lloyd of Effra (Lab)]

I am only too happy to accede to my noble friend’s request to congratulate the Independent Football Regulator on its report and the Secretary of State for her work in bringing this in.