Covid loans: uncertainty over £ 400 million still to be repaid

There is a “high degree of uncertainty” on how many hundreds of millions of pounds lent to sports bodies during the Covidic pandemic will be refunded, says an influential group of parliamentarians.

In a report, the Committee of Public Counts (PAC) criticizes “serious weaknesses” in the way in which the Department of Culture, Media and Sport (DCMS) managed the loans and which was “excessively optimistic” on reimbursements.

Between 2020 and 2022, the DCMS gave £ 474 million to the bodies in the sports and culture sectors to help them survive blockage, £ 218 million were in sports bodies with £ 124 million in support of the Premiership Rugby Union Clubs.

But the Interpartyic PAC, which evaluates the value for taxpayers’ money, says that £ 400 million have not yet been reimbursed and less than half of the borrowers had started reimbursements.

Nine bodies, which had collectively received £ 46 million, became insolvent.

This includes three Rugby clubs – London Irish, Wasps and Wocester – with the DCMS that says it does not expect to recover up to £ 29 million £ 41 million that they have lent them.

Among the concerns about the finances of the remaining flagship teams, parliamentarians say that “the future reimbursement is at risk of the need for the department to maintain the financial profitability of the sectors to which he has granted loans”.

The CAP warned of a “gap in the responsibility towards Parliament” on the money lent to the union of rugby, due to “a conflict of interest” that involves the connections of a senior employee with sport.

The president of the PAC Sir Geoffrey Clifton-Brow-brown said that “it is right that the government has forwarded the necessary support (but) not to provide a lifetime guarantee to institutions such as Rugby Union which could find financial difficulties five years later”.

“DCMS is intrinsically in conflict in the management of his loan book Covido,” he said. “As a lender, his priority will be to guarantee the best value for the taxpayer by these loans. As a department, his priority is to make all the power to support a sector that has become his debtor.”

In a declaration, the DCMS has declared: “This government will always protect the money of the taxpayers and we commit ourselves to recover funds paid pursuant to the previous administration. We have recovered 97% of the reimbursements due and we are ready to see all the mutuails start their reimbursements by the end of the year.

“The ministers and the Department continue to actively interact with the managers of the Union of Football of Rugby, the Rugby of Premiership and the Rugby of the championship to support the sustainability of this sport.

“We will take some time to consider the entire content of the relationship and we will respond in debt time”.