• £474 million lent to 120 borrowers from the sports and culture sectors during the pandemic – first time DCMS has managed a significant loan book.
  • 45% of solvent borrowers made at least one repayment by October 2024 – all solvent borrowers should make a first repayment by September 2025.
  • DCMS has recovered 97% of repayments scheduled to date – but does not expect to collect up to £29 million in loans issued to now-insolvent borrowers.

Government has made progress in collecting repayments of COVID-era support loans issued to the sports and culture sectors – although risks remain to future recoveries and whether the repayments can be managed at scale, according to a new National Audit Office (NAO) report.1,2

Between October 2020 and March 2022, the Department for Culture, Media & Sport (DCMS) lent £474 million to 120 borrowers operating in the sports and culture sectors to help them weather the financial shock of forced closure during lockdown.3,4

£145.1 million of the culture loans went to performing arts organisations. The top tier of English rugby union received £123.8 million of the sports loans – equivalent to 26% of the total loan book value.

DCMS issued the loans on favourable terms: an average term of 15 years, with three loans running for 25 years; repayment holidays, on average for three years, where no repayments were due; and almost all loans charged at 2% simple interest for the whole loan period.

By October 2024, 45% of solvent borrowers had made at least one repayment, with DCMS receiving a total of £40.9 million – 97% of the repayments it had scheduled by that date. Eleven borrowers have repaid their loans in full ahead of schedule, totalling £3.8 million.

However, DCMS does not expect to recover up to £29 million of the loans issued to borrowers who subsequently became insolvent. The taxpayer will also miss out on a further £11 million in future interest. As at October 2024 – four years after the first loan was issued – nine borrowers with loans totalling £46.1 million had fallen into insolvency,5 representing 7.5% of the total number of borrowers. DCMS expected 5% of borrowers to fail in the first three years of the loans, with up to 14% failing after ten years.

A further 61 borrowers are scheduled to start repaying during 2025, and all borrowers should make a first repayment by September 2025. As such, DCMS may be required to respond to a greater number of difficult cases. This increases the need for it to improve its approach to managing the loan book.

DCMS is also closely monitoring the situation of top tier English rugby union clubs given the need to protect its investment on behalf of taxpayers. By June 2023, three of the 13 clubs in the Premiership Rugby League had become insolvent,6 highlighting the sport’s financial difficulties.7

The NAO recommends that DCMS models its expected costs for managing the loan book over its lifetime, to include planning for future scenarios where the loss of public money may be a risk. It should also establish a strategy to evaluate its loan book and engage with borrowers, as well as develop its approach to learning lessons from its own loan book and from other government departments and organisations operating loan schemes.

“Government issued loans to the culture and sports sectors in extremely demanding circumstances, helping many organisations survive the immediate threat of the pandemic.

“It has since made progress in achieving 97% of the repayments scheduled to date.

“However, with all borrowers scheduled to start repaying next year, and ongoing risks to future recoveries, government should strengthen its longer-term plan for protecting taxpayers’ exposure.”

Gareth Davies, head of the NAO

Read the full report

DCMS’s management of its COVID-19 loan book

Notes for editors

  1. The report can be accessed here: https://www.nao.org.uk/reports/dcmss-management-of-its-covid-19-loan-book/
  2. The report examines whether DCMS is delivering value for money through the management of its loan book. Its decision to use loan funding alongside grants in the original support packages and individual award decisions are not within the scope of the report.
  3. DCMS manages the loan book. Two of its arm’s-length bodies, Arts Council England and Sport England, are the loan agents responsible for the day-to-day monitoring and management of the schemes, including relationships with borrowers.
  4. £256 million of the loans went to 37 culture bodies. The remaining £218 million went to 83 sports bodies.
  5. As at October 2024, DCMS had recovered £10.1 million from two of these insolvencies and expects to recover a further £7.3 million to £11.1 million from all the loan book insolvencies so far.
  6. The three clubs were London Irish, Wasps and Worcester Warriors. These clubs received 90% of the £46.1 million issued to now insolvent borrowers.
  7. 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.

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