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The Government could be forced to cancel almost £30m of taxpayers’ money lent to sporting bodies, clubs and the arts during the Covid-19 pandemic.
The figures, revealed today by the National Audit Office, provide a grim update on the £474m aid package provided by the Department for Culture, Media and Sport.
Rugby union was the biggest beneficiary with £139 million, while £24.2 million went to rugby league, £25.1 million to horse racing and betting and £14.3 million in tennis.
Football received just £13.4 million, with other sports also receiving a mix of grants and funding.
But the National Audit Office has sounded the alarm for rugby union, which has seen three clubs go bankrupt since the loans were granted.
Worcester Warriors, Wasps and London Irish received 90 per cent of the £46.1 million awarded to the now insolvent clubs and businesses. So far, £29m is expected to be written off due to insolvencies.
Sir Geoffrey Clifton-Brown, MP and chairman of the Public Accounts Committee, said: “While progress has been made in recovering initial repayments, it is concerning that up to £29 million of the money taxpayers could be lost to borrowers who have since gone bankrupt.
“DCMS should continue to closely monitor English rugby clubs which are on the brink of collapse. Given the public money at stake, the ministry still has a long way to go to show it has a long-term plan to manage and recover loans across all sectors.
The report says Worcester Warriors have received £15.7m, with just £9.8m recouped so far, while Wasps have received £14.1m, including £300,000 recovered to date.
DCMS “expects to receive an additional £7.2 million to £11.1 million from all loan portfolio defaults 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 and monitoring of rugby union loans given the ongoing financial challenges for the sport.
“Recognizing the failures of some clubs and the wider financial challenges facing rugby union, including those arising from the pandemic, the Government appointed two independent advisers in June 2023 to assist the Rugby Football Union and the Premiership Rugby League to stabilize the future of sport.
“Recognizing its current role as a key stakeholder, DCMS is closely monitoring the remaining Premiership clubs to identify those who may be behind on their repayments and facing financial difficulties. In doing so, DCMS monitors the risks it faces to protect its investment on behalf of taxpayers.
Additionally, which will be of concern to the taxpayer, the report states that two cases of possible fraud were identified among the borrowers.
