Source · Select Committees · Public Accounts Committee
20th Report - DCMS management of COVID-19 loans
Public Accounts Committee
HC 364
Published 2 April 2025
Conclusions (6)
7
Conclusion
Deferred
We therefore asked the Department what it would have done differently if it had to set up a similar loan scheme again. It told us that it had tried to build in lessons learned as it went through the process. For example, it had been optimistic about the number of …
Government Response Summary
The department will be undertaking a strategic review of its loan book management this financial year, including an external evaluation of the current operating model and alternative management options.
8
Conclusion
Deferred
During 2020, the Department had appointed two of its arm’s–length bodies, Arts Council England and Sport England, as its loan agents for the day–to–day monitoring and management of the loans, including relationships with borrowers. However, both Arts Council England and Sport England were new to loan management on this scale …
Government Response Summary
The department will be undertaking a strategic review of its loan book management this financial year, including an external evaluation of the current operating model and alternative management options.
14
Conclusion
Deferred
The Department has conducted minimal analysis of the costs of managing the loans over their lifetime, with no assessment of the factors that might increase costs or reduce income. It forecast that it would spend £17.3 million over the three years to March 2025, which we calculated would already represent …
Government Response Summary
The department will be undertaking a review of the programme to re-assess its strategic options, which will assess options including a sale or partial sale of the loan book.
15
Conclusion
Deferred
We therefore asked the Department how, if it did not have estimates of future costs beyond 2025–26, it was modelling the expected balance of costs against income in future years. It replied that it was conducting 24 Qq 62, 73; C&AG’s Report, paras 10 and 2.9 25 Qq 67, 71, …
Government Response Summary
The department will be undertaking a review of the programme to re-assess its strategic options, which will assess options including a sale or partial sale of the loan book.
17
Conclusion
Deferred
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, …
Government Response Summary
The department will be undertaking further cost, repayment and insolvency modelling through the department’s strategic review.
18
Conclusion
Deferred
The Department has not updated its assumptions on borrower failure since December 2022, for example, in light of the number of insolvencies to date.44 We therefore asked what actions it would take for borrowers in financial difficulties. The Department told us it would need to make decisions on a 39 …
Government Response Summary
The department will revisit its strategic repayment forecasts and undertake further cost, repayment and insolvency modelling through the department’s strategic review by December 2025.