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UK government urged to take 'tough approach' to Premiership loans

By PA
A Gallagher Premiership flag during the Gallagher Premiership Rugby match between Bath Rugby and Sale Sharks at the Recreation Ground on October 26, 2024 in Bath, England. (Photo by David Rogers/Getty Images)

The Government must take a tough approach to clawing back taxpayers’ money loaned to rugby union teams and other sports clubs during the COVID-19 pandemic, a select committee report has said.

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The Department for Digital, Culture, Media and Sport (DCMS) loaned £474million in total to 120 organisations in the sport and culture sectors to help them survive the impact of the pandemic, with £123.8m of that loaned to Premiership Rugby clubs.

DCMS admitted in a National Audit Office report issued last December that it did not expect to recover up to £29million of the £41.6m it had loaned to three Premiership clubs – London Irish, Wasps and Worcester – after they became insolvent.

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    It also said it would lose out on a further £11m in interest payments connected to those loans.

    Now, DCMS has been accused of being “overly optimistic” about the returns it expects on the remaining loans of over £400m in a report published by the Public Accounts Committee (PAC) on Wednesday.

    “(DCMS) expects repayment of all outstanding loans, but is unclear about the actions it would take for borrowers in financial difficulties,” the PAC report stated.

    The report said DCMS had received less than was due by October last year, and that the level of insolvencies among borrowers was higher than had been forecast.

    It urged DCMS to revise its expected repayment levels and insolvency rates by December 2025 “to reflect its experience once all borrowers have started making repayments”.

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    The PAC report also recommended DCMS “should demonstrate a tough approach on behalf of taxpayers to managing those borrowers in trouble, including when considering these borrowers for any future additional financial support, such as grant funding or further loans from the Department”.

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    The report identified “severe weaknesses” in how the loan book had been managed from the outset, adding: “There remains a high degree of uncertainty over how much of the loan book will ever be repaid.”

    DCMS was urged to review its options for managing the loan book, including selling it to “give the Government cash immediately and eliminate future running costs”.

    The report also accused DCMS of allowing a gap to arise in its accountability to Parliament over the rugby union loans because of a conflict of interest.

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    The report said the department’s Permanent Secretary Susannah Storey – whose husband is a managing director at CVC Capital Partners which owns a stake in Premiership Rugby – had declared the conflict of interest properly.

    However, it said the conflict meant the committee was unable to question her directly about the rugby loans, the area where the report said DCMS was most “heavily exposed” in terms of both the amount of loans it had made and the financial health of the sport.

    DCMS has been contacted for comment on the report.

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    Comments

    2 Comments
    T
    Timmyboy 3 days ago

    Plenty of money for the invaders to stay in hotels though. Country is completely F’d

    I
    IkeaBoy 3 days ago

    Maybe they could go after all the grifters the Tories gave billions to instead? For all the PPE gear that didn’t work?


    Or get their Russian donors to lend them a few quid?

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    fl 2 hours ago
    Why Les Kiss and Stuart Lancaster can lead Australia to glory

    “A succession of recent ex-players going straight back into the game as coaches in their early 40’s would prob be enough to kill it stone-dead. Innovation would die a death.”

    Would it? I do think one of the major differences between rugby and most other sports - which we’ve been overlooking - is the degree to which players are expected to lead team meetings & analysis sessions and the like. Someone like Owen Farrell has basically been an assistant coach already for ten years - and he’s been so under a variety of different head coaches with different expectations and playing styles.


    “The most interesting ppl I have met in the game have all coached well into their sixties and they value the time and opportunity they have had to reflect and therefore innovate in the game. That’s based on their ability to compare and contrast between multiple eras.”

    I don’t doubt that that’s true. But having interesting insights doesn’t necessarily mean you’ll be the best able to inspire a team, or the best at managing the backroom staff.


    “Wayne Smith winning the WWC in his mid sixties three years ago prob means nothing to you but it meant a lot to him. It took him back to the roots of is own coaching journey.”

    I don’t doubt that! But I don’t think coaches should be hired on the basis that it means a lot to them.


    “The likes of Carlo Ancelotti and Wayne Bennett and Andy Reid all have a tale to tell. You should open your ears and listen to it!”

    I agree! Never have I ever suggested otherwise!

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