The government has been forced to write off nearly £30m of taxpayers’ money loaned to sports bodies, clubs and the arts during the Covid-19 pandemic.
The figures, revealed today by the National Audit Office, provide a stark update on the £474m aid package provided by the Department of Culture, Media and Sport.
Rugby union was the biggest beneficiary with £139m, while £24.2m to rugby league, £25.1m to horse racing and betting, and £14.3m to tennis.
Football received just £13.4m, with other sports also receiving a mix of grants and funding.
But the National Audit Office has sounded the alarm for rugby union, which saw three clubs go under since the loans were issued.
Worcester Warriors, Wasps and London Irish received 90 per cent of the £46.1m issued to clubs and companies which are now insolvent. So far, £29m has been written off due to insolvencies.
Sir Geoffrey Clifton-Brown MP, Chair of the Committee of Public Accounts, said: “Although progress has been made in recovering initial repayments, it is concerning that up to £29m of taxpayer money could be lost from borrowers who have since gone under.
“DCMS should continue to keep a close eye on English rugby union clubs that have been teetering on the edge. Given the public money at stake, the department has more to do to show it has a long-term plan for managing and recovering loans across the sectors.”
The report states that Worcester Warriors received £15.7m with only £9.8m recovered thus far while Wasps received £14.1m with £300,000 recovered to date.
DCMS “expects to receive further £7.2m to £11.1m from all the loan book insolvencies so far… between 39 per cent and 48 per cent of the amount loaned”.
The National Audit Office report adds: “DCMS has had to increase its engagement with and oversight of loans to rugby union given ongoing financial challenges for the sport.
“Recognising the failures of some clubs and the wider financial challenges facing rugby union including those stemming from the pandemic, in June 2023, the government appointed two independent advisors to help the Rugby Football Union and the Premiership Rugby League stabilise the future of the sport.
“Acknowledging its ongoing role as a key stakeholder, DCMS is closely monitoring the remaining Premiership clubs to identify any which may be behind on their repayments and facing financial difficulties. In doing so DCMS is monitoring the risk it faces to protect its investment on behalf of taxpayers.”
Additionally, in what will be of concern to the taxpayer, the report states that two cases of possible fraud have been identified amongst the borrowers.
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