Source · Select Committees · Public Accounts Committee
Recommendation 5
5
Accepted
Compile a strategy for consistent and fair engagement with different sports borrowers.
Conclusion
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 insists that these clubs were financially viable when it awarded the loans, despite public reports at the time to the contrary and the subsequent insolvency of three of the clubs by June 2023, owing the Department £41.6 million. The Department says it took a common approach when lending to borrowers in different sports, but, in our view, its subsequent actions display different approaches in practice. It has appointed consultants and engaged with the Rugby Football Union, the Premier Rugby League and CVC Capital Partners on the future of rugby union. In contrast, the Department was less certain about the extent of engagement by itself and Sport England with professional basketball over proposed structural changes to the game that could put at risk repayment of the last outstanding loans from four of the 11 professional clubs that received loans. When the Department did provide us with more information, it was clear to us that it has been less engaged with basketball than with professional rugby union. recommendation The Department should work with Sport England to compile a strategy for engaging with borrowers in future in order to ensure that they engage consistently and fairly with different sports as more borrowers start to repay their loans. 6
Government Response Summary
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.
Government Response
Accepted
HM Government
Accepted
The government agrees with the Committee’s recommendation. department maintains regular communication with its borrowers through its Loan Agents. The department has tailored its approach to different borrowers to reflect their individual circumstances including the size of their loan and therefore impact on the Exchequer. In line with the NAO’s recommendation C (page 14), the department is developing a comprehensive borrower engagement plan that builds on existing strategies already implemented by Loan Agents. The plan will be guided by core principles that define the department’s approach to borrower engagement and will help to ensure decisions are applied appropriately across the loan portfolio. It will also include medium-term strategies that link key borrower and loan characteristics to appropriate engagement methods, aligned with the loan book’s current priorities and operating model.