There is a “high degree of uncertainty” over how much of the hundreds of millions of pounds lent to sports bodies during the Covid pandemic will be repaid, says an influential group of MPs.
In a report, the Public Accounts Committee (PAC) criticises “severe weaknesses” in the way the Department of Culture, Media and Sport (DCMS) handled the loans, and that it has been “overly optimistic” about repayments.
Between 2020 and 2022, the DCMS gave £474m to bodies in the sport and culture sectors to help them to survive lockdown, £218m was to sporting bodies with £124m supporting Premiership rugby union clubs.
But the cross-party PAC, which assesses value for taxpayers’ money, says £400m is yet to be paid back, and less than half of borrowers had started repayments.
Nine bodies, which had collectively received £46m, have become insolvent.
That includes three rugby clubs – London Irish, Wasps and Worcester – with the DCMS saying it does not expect to recover up to £29m of the £41m it lent to them.
Amid concerns over the finances of the remaining top-flight teams, the MPs say that “future repayment is put at risk by the department’s need to maintain the financial viability of the sectors to which it has given loans”.
The PAC warned of a “gap in accountability to parliament” over the money lent to rugby union, due to “a conflict of interest” involving a senior civil servant’s connections with the sport.
PAC chair Sir Geoffrey Clifton-Brown MP said it was “right that government came forward with necessary support [but] not to provide a lifetime guarantee to institutions like rugby union which may be experiencing financial difficulties five years later”.
“DCMS is inherently conflicted in the management of its Covid loan-book,” he said. “As a lender, its priority will be to secure best value for the taxpayer from these loans. As a department, its priority is to do everything in its power to support a sector which has become its debtor.”
In a statement, the DCMS said: “This government will always protect taxpayers’ money and we are committed to recovering funds paid out under the previous administration. We have recovered 97% of repayments due and we are set to see all borrowers begin their repayments by later this year.
“Ministers and the department continue to actively engage with the chief executives of the Rugby Football Union, Premiership Rugby and Championship Rugby to support the ongoing sustainability of the sport.
“We will take time to consider the full contents of the report and will respond in due course.”