Recommendations & Conclusions
4 items
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 …
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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 sport. The Department told us that there had been no special treatment and it had used the same requirements for all applicants when awarding the loans. Applicants had to be financially solvent before COVID–19 and be able to repay the loans, they had to have exhausted all other commercial support, and they had to be important for the sustainability of their sector.50 We questioned whether clubs were financially solvent, given rugby’s financial problems at the time and the investment by CVC Capital of £200 million in 2019 in the Premiership Rugby League to keep clubs going but the Department assured us that there was an independent board responsible for deciding on loans to the sports sector, which included external members, and that this had assessed the clubs as being financially solvent. The Board had also received information after the loans had been made to keep them abreast of the performance of its loans to the League.51 45 Qq 16, 20, 24–27, 39, 105, 125 46 Qq 119 – 121; Letter from DCMS Permanent Secretary, 25 February 2025 47 C&AG’s Report, para 2.22 48 Qq 3, 44–46 49 C&AG’s Report, paras 1 and 7 1.8 50 Qq 95–98; Letter from Director General for Policy at DCMS, 25 February 2025 51 Qq 96–101, 116; Letter from Director General for Policy at DCMS, 25 February 2025 15
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Government response AI summary
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.
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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 …
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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 Curtis, highlighted that, in 2022–23, seven of the remaining ten top–tier clubs could be classed as balance sheet insolvent, meaning they were reliant on financial support from their owners, as they were loss–making businesses.53 We therefore sought assurance from the Department that it was taking a hard line in getting the money from the rugby clubs that was still owed. It said that it would do exactly the same as with all its loans; it would do whatever it needed to do to get the maximum of taxpayers’ money back, except if its policy objective outweighed its financial objective, where it would then be a decision for ministers.54
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Government response AI summary
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.
Read full response →
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 …
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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 rugby clubs and it had used its convening power to help with the financial sustainability of professional rugby union.55 In June 2023, it had appointed two independent advisors to work with itself, the Rugby Football Union (the national governing body for rugby union in England), the Premiership Rugby League and CVC Capital Partners, which owns a significant proportion of League assets.56 This work had resulted in the signing in September 2024 by the Rugby Football Union, Premiership Rugby League and The Rugby Players Association of a new Men’s Professional Game Partnership to create world–leading English teams and thriving professional leagues.57
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Government response AI summary
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.
Read full response →
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 …
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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 it was not for the government to intervene in commercial decisions, such as franchising, as these were a matter for the sport’s governing body.58 However, it would expect Sport England, as its loan agent, to be working closely with any clubs which felt they could not repay their loan.59 It highlighted that, of the 11 professional basketball clubs 52 Qq 23, 97; C&AG’s Report, paras 16 and 2.21 53 Leonard Curtis Rugby Finance Report 2024, 25 September 2024, pages 16, 34, 52 and 56 54 Q 105 55 Qq 91–93 56 Q 91; C&AG’s Report, para 16 and 2.23 57 Q 93 58 Qq 106–110, 114; Letter from DCMS Permanent Secretary, 25 February 2025 59 Qq 107–111; Letter from DCMS Permanent Secretary, 25 February 2025 16 that had received loans, seven had repaid these in full.60 The Department also told us that it was unclear as to what Sport England were doing with regard to the franchising issue other than that Sport England had an ongoing relationship with the Federation over funding and compliance with its Code of Sports Governance.61 However, in response to our request for more information, it subsequently confirmed in writing that it, UK Sport and Sport England were engaging on this issue as the British Basketball Federation was in the process of receiving government funding, and that, if it were concerned about any actions by the Federation which were detrimental to either the long–term financial sustainability of basketball or the ability of clubs to afford loan repayments, these issues would form part of discussions with UK Sport and Sport England.62 Management of a conflict of interest
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Government response AI summary
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.
Read full response →
HM Treasury