Recommendations & Conclusions
25 items
2
Conclusion
20th Report - DCMS management of COVID-…
Accepted
The Department’s management of its contract with PwC has been poor. The Department originally appointed PwC to advise on options for the management of its loans. After PwC identified the need for a managed service provider, the Department appointed PwC to this position after a competition, with a contract running …
Government response. The government states that PwC delivered the full additional functionality for the loan management system in March 2025 for under £300,000. They have extended PwC's original contract for a year for business continuity and a strategic review will inform the …
HM Treasury
3
Conclusion
20th Report - DCMS management of COVID-…
Accepted
The Department does not yet know which options for the loan book’s future management would provide best value for the taxpayer in the long term. The costs of managing the loan book to date have been significant, at about £17 million over three years. The Department has not forecast the …
Government response. The government states it will undertake a strategic review of the loan book programme, to be completed this financial year (2025-26), to re-assess its strategic options, including a sale or partial sale, once all borrower repayment holidays end in September …
HM Treasury
4
Conclusion
20th Report - DCMS management of COVID-…
Accepted
The Department is being overly optimistic in the management of its loan book in the face of continuing uncertainty over future repayments. The Department, as at October 2024 had received less in repayments than was due, the level of insolvencies among its borrowers had been higher than it forecast, and …
Government response. The government agrees to safeguard taxpayers' money and maximise financial returns, stating it has no current plans to provide further direct loans to sport and culture organizations. They reiterate that grants are awarded for specific projects.
HM Treasury
5
Conclusion
20th Report - DCMS management of COVID-…
Accepted
The Department is displaying an inconsistent approach to its engagement with professional sports. The majority of the Department’s loans to sport bodies went to professional sport. For example, 57% (£124 million) of the Department’s sports loans went to top–tier, professional rugby union clubs in the Premiership Rugby League. The Department …
Government response. The government is developing a comprehensive borrower engagement plan that will build on existing strategies and be guided by core principles to ensure consistent and fair engagement with different sports and borrowers.
HM Treasury
6
Conclusion
20th Report - DCMS management of COVID-…
Rejected
Owing to a conflict of interest, the Department has allowed a gap to arise in accountability to Parliament for a significant amount of public money relating to the loans it made to rugby union. Since her appointment as Permanent Secretary in 2023, the Department’s Accounting Officer has had a conflict …
Government response. The government disagrees with the recommendation, stating that accountability is best achieved by delegating Accounting Officer decisions for Rugby Union to a Director General within DCMS. The Director General for Strategy and Major Events has been appointed as Additional Accounting …
HM Treasury
1
Conclusion
20th Report - DCMS management of COVID-…
Accepted
On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department for Culture, Media and Sport (the Department) on the management of its COVID–19 loan book.1
Government response. The government will undertake a strategic review of its loan book management in the current financial year, including an external evaluation and consideration of alternative management options.
HM Treasury
7
Conclusion
20th Report - DCMS management of COVID-…
Deferred
We therefore asked the Department what it would have done differently if it had to set up a similar loan scheme again. It told us that it had tried to build in lessons learned as it went through the process. For example, it had been optimistic about the number of …
Government response. The department will be undertaking a strategic review of its loan book management this financial year, including an external evaluation of the current operating model and alternative management options.
HM Treasury
8
Conclusion
20th Report - DCMS management of COVID-…
Deferred
During 2020, the Department had appointed two of its arm’s–length bodies, Arts Council England and Sport England, as its loan agents for the day–to–day monitoring and management of the loans, including relationships with borrowers. However, both Arts Council England and Sport England were new to loan management on this scale …
Government response. The department will be undertaking a strategic review of its loan book management this financial year, including an external evaluation of the current operating model and alternative management options.
HM Treasury
9
Conclusion
20th Report - DCMS management of COVID-…
Accepted
The Department did not employ a specialist loan management company. It told us that it adopted a hybrid approach, with separate loan agents for culture and sport and a managed service provider, to the management of its loan book in line with a recommendation from PwC.10 The Department also said …
Government response. The government agrees to undertake a strategic review of its loan book management by March 2026 including an external evaluation of the efficiency and effectiveness of the current operating model, and will consider alternative management options.
HM Treasury
10
Conclusion
20th Report - DCMS management of COVID-…
Accepted
The Department originally commissioned PwC in 2022 to assess the different options for the long–term management of its loan book. In line with PwC’s advice, the Department decided to retain management of the loan book in–house, with day–to–day management through the loan agents, supplemented by appointing a managed service provider.15 …
Government response. The department took steps to ensure it had a robust model in place, and has received 97% of the repayments scheduled at the date of the NAO report.
HM Treasury
11
Conclusion
20th Report - DCMS management of COVID-…
Accepted
We observed that the above arrangements appeared favourable to PwC and that it was not unheard of for government to appoint consultants to implement the advice they have given and for the scope of such implementation work, and therefore its costs, to increase subsequently. The Department pointed out that it …
Government response. The full Loan Management System (LMS) Version 2 (V2) functionality was implemented in March 2025 for under £300,000 and the original PwC contract has been extended to preserve business continuity.
HM Treasury
12
Conclusion
20th Report - DCMS management of COVID-…
Accepted
The Department planned to have the original data platform in place in March 2023. However, the loan management system only went live in June 2024, 15 months later than originally planned. The Department’s decision to increase the scope of PwC’s work to develop the system contributed to it taking longer …
Government response. The full Loan Management System (LMS) Version 2 (V2) functionality was implemented in March 2025 for under £300,000 and the original PwC contract has been extended to preserve business continuity.
HM Treasury
13
Conclusion
20th Report - DCMS management of COVID-…
Accepted
The Department recognised, at the time of the system going live, that it had to resolve a small number of issues to ensure the system was operating as intended, and it planned further improvements to functionality around, for example, automatic reprofiling.26 It told us that it had entered into another …
Government response. The full Loan Management System (LMS) Version 2 (V2) functionality was implemented in March 2025 for under £300,000 and the original PwC contract has been extended to preserve business continuity.
HM Treasury
14
Conclusion
20th Report - DCMS management of COVID-…
Deferred
The Department has conducted minimal analysis of the costs of managing the loans over their lifetime, with no assessment of the factors that might increase costs or reduce income. It forecast that it would spend £17.3 million over the three years to March 2025, which we calculated would already represent …
Government response. The department will be undertaking a review of the programme to re-assess its strategic options, which will assess options including a sale or partial sale of the loan book.
HM Treasury
15
Conclusion
20th Report - DCMS management of COVID-…
Deferred
We therefore asked the Department how, if it did not have estimates of future costs beyond 2025–26, it was modelling the expected balance of costs against income in future years. It replied that it was conducting 24 Qq 62, 73; C&AG’s Report, paras 10 and 2.9 25 Qq 67, 71, …
Government response. The department will be undertaking a review of the programme to re-assess its strategic options, which will assess options including a sale or partial sale of the loan book.
HM Treasury
16
Conclusion
20th Report - DCMS management of COVID-…
Accepted
By October 2024, 45% of solvent borrowers had made at least one repayment on their loans, with the remaining 55% yet to make a repayment. The 45% had paid the Department £40.9 million in total, less than the £42.1 million it had scheduled to receive by then (97%).39 However, nine …
Government response. The department makes annual adjustments to reflect borrowers' circumstances and recognises an expected credit loss, and will revisit its strategic repayment forecasts after the repayment holiday ends in September 2025, undertaking further cost, repayment and insolvency modelling through the department’s …
HM Treasury
17
Conclusion
20th Report - DCMS management of COVID-…
Deferred
The Department told us that, to some extent, the fact that some borrowers had become insolvent was outside its control.41 However, it considered that it has a good degree of financial information about borrowers and therefore has a good sense of their financial positions. Borrowers had also, in some cases, …
Government response. The department will be undertaking further cost, repayment and insolvency modelling through the department’s strategic review.
HM Treasury
18
Conclusion
20th Report - DCMS management of COVID-…
Deferred
The Department has not updated its assumptions on borrower failure since December 2022, for example, in light of the number of insolvencies to date.44 We therefore asked what actions it would take for borrowers in financial difficulties. The Department told us it would need to make decisions on a 39 …
Government response. The department will revisit its strategic repayment forecasts and undertake further cost, repayment and insolvency modelling through the department’s strategic review by December 2025.
HM Treasury
19
Recommendation
20th Report - DCMS management of COVID-…
Accepted
As at December 2024, the Department had identified two possible incidents of fraud among its borrowers, relating to loans valued at £2.2 million.47 It told us that it considered the level of fraud in its COVID–19 loans to be relatively low, compared to other COVID–19 schemes, but that it was …
Government response. The government agrees to develop a comprehensive borrower engagement plan by November 2025 that builds on existing strategies, guided by core principles and medium-term strategies that link key borrower and loan characteristics to appropriate engagement methods.
HM Treasury
20
Conclusion
20th Report - DCMS management of COVID-…
Acknowledged
The Department loaned £218 million in total to 83 sports bodies. Of this £124 million (57%) was loaned to the 13 clubs in the Premiership Rugby League, the top division of professional rugby union.49 We asked the Department whether it was appropriate to give so many loans to one professional …
Government response. The department is developing a comprehensive borrower engagement plan, building on existing strategies implemented by Loan Agents, guided by core principles that define the department’s approach to borrower engagement.
HM Treasury
21
Conclusion
20th Report - DCMS management of COVID-…
Acknowledged
We noted, however, that, by June 2023, three of these clubs had become insolvent before they had made any repayment of the loans of £41.9 million they had received (London Irish £11.8 million; Wasps £14.1 million; and Worcester Warriors £15.7 million).52 Written evidence we received from professional services group, Leonard …
Government response. The department is developing a comprehensive borrower engagement plan, building on existing strategies implemented by Loan Agents, guided by core principles that define the department’s approach to borrower engagement.
HM Treasury
22
Conclusion
20th Report - DCMS management of COVID-…
Acknowledged
We asked the Department if it thought about the financial sustainability of sectors as a whole, and not just of individual borrowers, when considering future insolvency projections. It confirmed that it did and cited the example of rugby union. It told us that it cared deeply about the insolvencies of …
Government response. The department is developing a comprehensive borrower engagement plan, building on existing strategies implemented by Loan Agents, guided by core principles that define the department’s approach to borrower engagement.
HM Treasury
23
Conclusion
20th Report - DCMS management of COVID-…
Acknowledged
We asked the Department what it was doing with regard to professional basketball and the proposals by the British Basketball Federation to franchise out the running of the professional league which some have claimed is putting at risk the Department’s loans to some of the clubs. The Department replied that …
Government response. The department is developing a comprehensive borrower engagement plan, building on existing strategies implemented by Loan Agents, guided by core principles that define the department’s approach to borrower engagement.
HM Treasury
24
Conclusion
20th Report - DCMS management of COVID-…
Rejected
Since her appointment as Permanent Secretary in June 2023, the Department’s Accounting Officer has had a declared conflict of interest regarding rugby union.63 The Department told us that it has put in place arrangements to handle this conflict whereby its Director General for Policy is responsible for decisions and advice …
Government response. The government disagrees with the committee's recommendation and believes accountability is best achieved by having a Director General within the department as an Additional Accounting Officer, rather than a Permanent Secretary from another department.
HM Treasury
25
Conclusion
20th Report - DCMS management of COVID-…
Rejected
The conflict of interest meant that we could not question the Permanent Secretary directly about the £124 million that the Department had loaned to top–tier rugby union clubs and its subsequent management of these loans. Instead, we had to direct our questions to the Director General for Policy.65 Professional rugby …
Government response. The government disagrees with the Committee’s recommendation and believes that accountability is best achieved by having a Director General within the department as an Additional Accounting Officer.
HM Treasury