20th Report - DCMS management of COVID-19 loans
Select Committee
Public Accounts Committee
HC 364
2 April 2025
No response data available yet.
Government response
Treasury minutes: Government response to the Committee of Public Accounts on the Twentieth report from Session 2024-25 · published 10 Jul 2025
Recommendations & Conclusions
25 results
2
Conclusion
Ensure PwC delivers full loan system functionality by September 2025 and prepare for contract end.
Conclusion
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 …
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3
Conclusion
Department lacks understanding of long-term value for money for loan book management options.
Conclusion
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 …
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4
Conclusion
Revisit loan repayment estimates and demonstrate tough management of troubled borrowers.
Conclusion
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 …
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5
Conclusion
Compile a strategy for consistent and fair engagement with different sports borrowers.
Conclusion
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 …
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6
Conclusion
Consider alternative arrangements to fill accountability gap for rugby union loans.
Conclusion
Owing to a conflict of interest, the Department has allowed a gap to arise in accountability to Parliament for a significant amount of public money relating to the loans it made to rugby union. Since her appointment as Permanent Secretary …
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1
Conclusion
Evidence gathered on Department's management of COVID-19 loan book.
Conclusion
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
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7
Conclusion
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. …
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8
Conclusion
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 …
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9
Conclusion
Hybrid loan management approach caused integration issues and objective tension.
Conclusion
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 …
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10
Conclusion
Department increased PwC contract scope for loan management system, raising costs.
Conclusion
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 …
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11
Conclusion
Department justified increased PwC contract scope for system functionality and future flexibility.
Conclusion
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 …
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12
Conclusion
Loan management system launched 15 months late with ongoing functionality concerns.
Conclusion
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 …
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13
Conclusion
Department spending additional £300,000 to resolve loan management system functionality issues
Conclusion
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 …
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14
Conclusion
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 …
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15
Conclusion
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; …
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16
Conclusion
Nine borrowers became insolvent, defaulting on £46.1 million in loans, exceeding expectations
Conclusion
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 …
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17
Conclusion
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 …
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18
Conclusion
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 …
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19
Recommendation
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 …
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20
Conclusion
£124 million of sports loans (57%) allocated to Premiership Rugby League clubs
Conclusion
The Department loaned £218 million in total to 83 sports bodies. Of this £124 million (57%) was loaned to the 13 clubs in the Premiership Rugby League, the top division of professional rugby union.49 We asked the Department whether it …
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21
Conclusion
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 …
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22
Conclusion
Department considered sector financial sustainability and actively supported professional rugby union's recovery.
Conclusion
We asked the Department if it thought about the financial sustainability of sectors as a whole, and not just of individual borrowers, when considering future insolvency projections. It confirmed that it did and cited the example of rugby union. It …
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23
Conclusion
Department engaging with British Basketball Federation regarding franchising, funding, and loan repayment risks.
Conclusion
We asked the Department what it was doing with regard to professional basketball and the proposals by the British Basketball Federation to franchise out the running of the professional league which some have claimed is putting at risk the Department’s …
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24
Conclusion
Department established arrangements to manage Accounting Officer's conflict of interest in rugby union matters.
Conclusion
Since her appointment as Permanent Secretary in June 2023, the Department’s Accounting Officer has had a declared conflict of interest regarding rugby union.63 The Department told us that it has put in place arrangements to handle this conflict whereby its …
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25
Conclusion
Conflict of interest prevented direct questioning on Department's substantial rugby loans and financial exposure.
Conclusion
The conflict of interest meant that we could not question the Permanent Secretary directly about the £124 million that the Department had loaned to top–tier rugby union clubs and its subsequent management of these loans. Instead, we had to direct …
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