Source · Select Committees · Public Accounts Committee

20th Report - DCMS management of COVID-19 loans

Public Accounts Committee HC 364 Published 2 April 2025

Report Status

Government responded

Conclusions & Recommendations

25 items (1 rec)

Source

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Government Response

AI assessment · 25 of 25 classified

Accepted 12

Acknowledged 4

Deferred 6

Rejected 3

Government response

Treasury minutes: Government response to the Committee of Public Accounts on the Twentieth report from Session 2024-25 · published 10 Jul 2025

Read the government response ↗ Response on the Index

Recommendations & Conclusions

6 items

7 Conclusion Deferred

Department learned lessons, improved loan management staffing and governance.

Conclusion

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. … Read more

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.

HM Treasury

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8 Conclusion Deferred

Loan agents initially lacked expertise, prompting appointment of specialist provider.

Conclusion

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 … Read more

Government Response Summary

HM Treasury

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14 Conclusion Deferred

Department conducted minimal analysis of future loan management costs beyond March 2025

Conclusion

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 … Read more

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.

HM Treasury

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15 Conclusion Deferred

Department reviewing strategic options for loan book, including sale or consolidation with other loans

Conclusion

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; … Read more 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, 72 26 Q 80; C&AG’s Report, paras 10 and 2.9 27 Qq 73–75, 81–82; Letter from DCMS Permanent Secretary, 25 February 2025 28 Q30; C&AG’s Report, paras 17 and 3.3 29 C&AG’s Report, paras 17 and 3.4 30 Q 28; C&AG’s Report, para 3.3 31 Q 29 12 a review of its strategic options for the future of the loan book.32 The Department had undertaken such a review in 2021 and into 2022 when PwC had given it advice on all its options for the loan book, including the current hybrid approach to its management and its sale.33 It told us that it intends to undertake a similar review later in 2025–26 once all borrowers have made at least one repayment and the scheme is in a steady state with a solid operating model, experience of operating the loan management system, and a track record of repayment in place.34 The review will include more detailed costings and a review of various options.35 The Department said that it was keen to look at as many scenarios as it could think of. Future options include: the current arrangements for managing the loan book; the loan book’s sale; its consolidation with other government loans; or the appointment by the Department of specialists to manage its loans.36 The Department informed us that it had obtained an indicative range of the sale price back when PwC had advised it on its options in 2021 and 2022.37 We noted that an up–to–date valuation of potential receipts from the loan book’s sale will form an essential benchmark for this review.38 32 Qq 30, 31 33 Q 35; Letter from DCMS Permanent Secretary, 25 February 2025; C&AG’s Report, para 3.5 34 Qq 10, 12, 29–32 35 Qq 28, 30 36 Qq 31, 33, 35 37 Q 36 38 Q 33 13 2 Managing future risks Future repayment and insolvency levels Show less

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.

HM Treasury

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17 Conclusion 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 … Read more

Government Response Summary

The department will be undertaking further cost, repayment and insolvency modelling through the department’s strategic review.

HM Treasury

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18 Conclusion Deferred

Department has not updated borrower failure assumptions since December 2022 despite new insolvencies

Conclusion

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 … Read more

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.

HM Treasury

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