Source · Select Committees · Public Accounts Committee
Recommendation 10
10
Accepted
Department increased PwC contract scope for loan management system, raising costs.
Conclusion
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 7 Qq 3–7, 13, 21, 52, 83; C&AG’s Report, paras 11, 2.2 and 2.10 8 C&AG’s Report, paras 3, 9, 1.15 and 2.3 9 Qq 54, 55, 60; C&AG’s Report, paras 10 and 1.16 10 Qq 53, 54, 57 11 Q 43 12 Q 55; Letter from DCMS Permanent Secretary, 25 February 2025 13 Q 63; C&AG’s Report, para 2.7 14 Qq 3, 14–16, 20, 21, 27 15 Letter from DCMS Permanent Secretary, 25 February 2025; C&AG’s Report, paras 1.16 and 3.5 10 The Department subsequently appointed PwC as the managed service provider in February 2023, with a contract running to March 2025, with an optional extension period of up to an additional two years. PwC’s contract included, among other things, its development of a data collection and storage platform to help support management of the loan book.16 The Department subsequently decided to increase the scope of PwC’s work in October 2023, asking PwC to develop a loan management system. As well as supporting the collection and storage of borrowers’ data, it intended the system to build on existing work by Sport England and be rolled out to Arts Council England, to provide a better reporting experience for borrowers, and to include data analysis functions for the loan agents, producing a risk rating and dashboard for each borrower.17. This increase in scope contributed to an increase in the value of PWC’s contract of £900,000 (47%), from £1.9 million to £2.8 million.18
Government Response Summary
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.
Government Response
Accepted
HM Government
Accepted
1.4 The department took steps to ensure it had a robust model in place, having analysed a range of options and taken external advice. This has ensured that the department has received 97% of the repayments scheduled at the date of the NAO report, which demonstrates the positive performance of the department’s loan book management approach.