Source · Select Committees · Public Accounts Committee
Recommendation 21
21
Acknowledged
Three Premiership Rugby clubs receiving loans became insolvent, others remain financially fragile
Conclusion
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
Government Response 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.
Government Response
Acknowledged
HM Government
Acknowledged
5.1 The government agrees with the Committee’s recommendation. Target implementation date: November 2025 5.2 Every borrower is treated in line with the department's loan book objectives. The 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. 5.3 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.