Source · Select Committees · Public Accounts Committee
20th Report - DCMS management of COVID-19 loans
Public Accounts Committee
HC 364
Published 2 April 2025
Recommendations
19
Accepted
Department identified two potential fraud incidents totaling £2.2 million in COVID-19 loans
Recommendation
As at December 2024, the Department had identified two possible incidents of fraud among its borrowers, relating to loans valued at £2.2 million.47 It told us that it considered the level of fraud in its COVID–19 loans to be relatively …
Read more
Government Response Summary
The government agrees to develop a comprehensive borrower engagement plan by November 2025 that builds on existing strategies, guided by core principles and medium-term strategies that link key borrower and loan characteristics to appropriate engagement methods.
HM Treasury
View Details →
Conclusions (11)
2
Conclusion
Accepted
The Department’s management of its contract with PwC has been poor. The Department originally appointed PwC to advise on options for the management of its loans. After PwC identified the need for a managed service provider, the Department appointed PwC to this position after a competition, with a contract running …
Government Response Summary
The government states that PwC delivered the full additional functionality for the loan management system in March 2025 for under £300,000. They have extended PwC's original contract for a year for business continuity and a strategic review will inform the future requirement for a Managed Service Provider, with re-tendering planned if needed.
3
Conclusion
Accepted
The Department does not yet know which options for the loan book’s future management would provide best value for the taxpayer in the long term. The costs of managing the loan book to date have been significant, at about £17 million over three years. The Department has not forecast the …
Government Response Summary
The government states it will undertake a strategic review of the loan book programme, to be completed this financial year (2025-26), to re-assess its strategic options, including a sale or partial sale, once all borrower repayment holidays end in September 2025.
4
Conclusion
Accepted
The Department is being overly optimistic in the management of its loan book in the face of continuing uncertainty over future repayments. The Department, as at October 2024 had received less in repayments than was due, the level of insolvencies among its borrowers had been higher than it forecast, and …
Government Response Summary
The government agrees to safeguard taxpayers' money and maximise financial returns, stating it has no current plans to provide further direct loans to sport and culture organizations. They reiterate that grants are awarded for specific projects.
5
Conclusion
Accepted
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 …
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.
1
Conclusion
Accepted
On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department for Culture, Media and Sport (the Department) on the management of its COVID–19 loan book.1
Government Response Summary
The government will undertake a strategic review of its loan book management in the current financial year, including an external evaluation and consideration of alternative management options.
9
Conclusion
Accepted
The Department did not employ a specialist loan management company. It told us that it adopted a hybrid approach, with separate loan agents for culture and sport and a managed service provider, to the management of its loan book in line with a recommendation from PwC.10 The Department also said …
Government Response Summary
The government agrees to undertake a strategic review of its loan book management by March 2026 including an external evaluation of the efficiency and effectiveness of the current operating model, and will consider alternative management options.
10
Conclusion
Accepted
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 …
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.
11
Conclusion
Accepted
We observed that the above arrangements appeared favourable to PwC and that it was not unheard of for government to appoint consultants to implement the advice they have given and for the scope of such implementation work, and therefore its costs, to increase subsequently. The Department pointed out that it …
Government Response Summary
The full Loan Management System (LMS) Version 2 (V2) functionality was implemented in March 2025 for under £300,000 and the original PwC contract has been extended to preserve business continuity.
12
Conclusion
Accepted
The Department planned to have the original data platform in place in March 2023. However, the loan management system only went live in June 2024, 15 months later than originally planned. The Department’s decision to increase the scope of PwC’s work to develop the system contributed to it taking longer …
Government Response Summary
The full Loan Management System (LMS) Version 2 (V2) functionality was implemented in March 2025 for under £300,000 and the original PwC contract has been extended to preserve business continuity.
13
Conclusion
Accepted
The Department recognised, at the time of the system going live, that it had to resolve a small number of issues to ensure the system was operating as intended, and it planned further improvements to functionality around, for example, automatic reprofiling.26 It told us that it had entered into another …
Government Response Summary
The full Loan Management System (LMS) Version 2 (V2) functionality was implemented in March 2025 for under £300,000 and the original PwC contract has been extended to preserve business continuity.
16
Conclusion
Accepted
By October 2024, 45% of solvent borrowers had made at least one repayment on their loans, with the remaining 55% yet to make a repayment. The 45% had paid the Department £40.9 million in total, less than the £42.1 million it had scheduled to receive by then (97%).39 However, nine …
Government Response Summary
The department makes annual adjustments to reflect borrowers' circumstances and recognises an expected credit loss, and will revisit its strategic repayment forecasts after the repayment holiday ends in September 2025, undertaking further cost, repayment and insolvency modelling through the department’s strategic review.