Government officials say they are increasingly pessimistic about the financial stability of the professional rugby coalition, as they defended loans given to sports organisations during the pandemic.
The National Audit Office (NAO) report, released last year, said the total £474 million loans that were loaned to sports organisations during the pandemic will not be recovered. At the heart of the defaulters were three rugby clubs: Worcester, Hornet and London Irish, who joined in management after lending £41.6 million with public funds.
Speaking before the Congressional Public Accounts Committee on Monday, Polly Payne's Policy Director, Media and Sports Bureau (DCMS), said the government is currently monitoring financial risks not only to clubs but also to the premiership itself. He said he is doing so. , and concerns about its financial viability were growing.
When asked by MPS he hopes Rugby Club will manage in the future, Payne said: Are we more or less pessimistic than when we gave the loan? Given everything that's happening in sports, I think we're even more pessimistic than we were back then. I don't want to talk about our individual borrowers, but absolutely we keep it during reviews and really care.
“In rugby, when we were thinking about possible bankruptcies and the financial strength of individual clubs, we also thought about the financial situation throughout the Premier League,” she continued. “We are not only taking that into consideration, but we are using the government's convening power to support financial sustainability. We take this very seriously.”
Payne defended the decision to award a total of £123.8 million to the Premiership Club, a quarter of the total loaned at the time. “There wasn't a special treatment and I wasn't thinking about sports in sports,” she said. “I think it's worth saying that [total amount] We may have spent so it wasn't like we missed out on other sports. ”
Payne also claimed that the club had shown it was a solvent before Covid, a key requirement of the lending system, hit. “Unfortunately, within the next three years, [those assessments were proven wrong] …However, there is no reason to believe that the information given at the time was inaccurate,” she said.
DCMS officials also said that money has been recovered from more than £10 million so far, with nine people between £7.3 million and £11.1 million. It was noted that it is expected to be recovered from nine recipients of Covid Lawn. Going bankrupt.
Also speaking before the committee, Secretary Susanna Story, DCMS's most senior civil servant, defended the Covid Lawn system, calling it a “relatively robust” approach.
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“These were very effective interventions,” she said. “We were very cautious when loans were given to borrowers to have a specific due diligence. So we knew who they were. As a result, [NAO] The ratings showed that the fraud levels were relatively low. So we definitely learned a few lessons. We codified this process and we definitely made some improvements. But I think it was a relatively strong intervention in hindsight. ”
