Government officials have expressed growing concerns over the financial stability of professional rugby union, particularly in light of the pandemic loans issued to struggling clubs. Officials defended the decision to provide financial support to sports organisations during Covid-19, despite significant losses.
A report by the National Audit Office (NAO) last year revealed that up to £29m of the £474m lent to sports organisations may not be recovered. Among the primary defaulters were three rugby clubs Worcester, Wasps, and London Irish which collectively received £41.6m in public funding before entering administration.
During a recent parliamentary session with the Public Accounts Committee, Polly Payne, director general of policy at the Department for Culture, Media and Sport (DCMS), acknowledged that financial risks within the sport have increased. She stated that the government is actively monitoring not only the viability of individual clubs but also the overall stability of the Premiership.
When asked whether more clubs could face administration in the future, Payne admitted that the government’s outlook has become more pessimistic. “We are absolutely reviewing and updating our forecasts,” she said. “Are we more or less pessimistic than at the time when we gave the loans? Given everything that has gone on in the sport, we are more pessimistic than we were then.”
She emphasised that officials are continuously assessing financial risks and have used government influence to support the sport’s sustainability. Addressing concerns over the amount lent to rugby, Payne justified the decision to allocate £123.8m to Premiership clubs, arguing that no specific sport was given preferential treatment. She also noted that the total available funds were not exhausted, ensuring no other sport was deprived of support.
Payne further explained that clubs had appeared solvent before Covid-19, which was a key criterion for receiving loans. However, within three years, those assessments proved incorrect. Despite this, she maintained that the initial financial data provided by clubs was not misleading.
DCMS officials highlighted that efforts to recover funds have yielded some success. Over £10m has been retrieved from the three defunct clubs, with an additional £7.3m to £11.1m expected from nine loan recipients that have since become insolvent.
Susannah Storey, the most senior civil servant in the DCMS, defended the Covid loan programme, describing it as a “relatively solid” intervention. She stressed that due diligence was conducted before distributing funds and that fraud levels were minimal. While acknowledging lessons had been learned, she maintained that the financial support system was effective under the circumstances.
With rugby union still facing uncertainty, government officials remain focused on addressing financial risks and ensuring the long-term stability of the sport.
