Source · Select Committees · Public Accounts Committee
Recommendation 17
17
Deferred
Department expects all remaining borrowers to make first loan repayment by September
Conclusion
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, had repayment holidays of up to four years to prepare for repayment.42 As a result, the Department assured us that it expected that all remaining borrowers will have made their first repayment by September
Government Response Summary
The department will be undertaking further cost, repayment and insolvency modelling through the department’s strategic review.
Government Response
Deferred
HM Government
Deferred
4.1 The government agrees with the Committee’s recommendation. Target implementation date: December 2025 4.2 Each year the department makes a number of adjustments as part of its Annual Report and Accounts to reflect each borrower’s individual circumstances and recognise an expected credit loss, in line with International Financial Reporting Standards (IFRS 9). This work considers a number of factors, including external probability of default scores obtained via a credit rating agency to assess how much we expect to recover on each loan. For 2024-25, the department has also manually adjusted the expected credit loss for borrowers where there are unique circumstances, not reflected in credit scores, that could impact on future repayment. 4.3 However, the end of the repayment holiday period in September 2025 for all borrowers provides the appropriate time to revisit the department’s strategic repayment forecasts. DCMS will be undertaking further cost, repayment and insolvency modelling through the department’s strategic review.