Wasps, Worcester and London Irish owe more than £30m in unpaid Covid loans
The financial crisis at London Irish, Wasps and Worcester has cost the taxpayer more than £30m in uncollected Covid loans.
The three Premier League clubs are suspended during the 2022-2023 season after receiving £41.6 million in emergency funding from the Department for Culture, Media and Sport (DCMS) to make up for lost revenue from matches and broadcast deals affected by the pandemic.
Worcester Warriors are owed a total of £15.7m, but club administrators will repay £9.8m in June 2023.
According to a National Audit Office (NAO) report, Wasps administrators have repaid £300,000 of a £14.1m loan, while London Irish’s £11.8m loan has yet to be returned to the public purse.
DCMS said it expected to recover a further £7.3m to £11.1m from the trio and six other borrowers who have gone bankrupt since receiving their loans.
London Irish, Wasps and Worcester When the number of teams in the Championship expands from 12 to 14 next season, all teams will apply to return to the Championship.
Although all rugby creditors will need to be repaid in full before professional rugby can return, government debt may still be on the books.
Sir Geoffrey Clifton-Brown, chairman of the Public Accounts Committee, said: “While progress has been made in recovering initial repayments, there is concern that borrowers who have since gone bankrupt could have lost up to £29m. Taxpayer Funds.”
Clifton-Brown added that DCMS should set out more detailed plans to recoup the remainder of the £123.8m lent to Premier League clubs during the pandemic.
“DCMS should continue to keep a close eye on those English rugby league clubs that have been teetering on the edge,” he added.
“Given the threats to public funding, the department has more work to do to show it has a long-term plan to manage and recover loans across sectors.”
“DCMS acknowledges that some borrowers already had financial risks before the outbreak,” the NAO said in its report.
“Nevertheless, it still believes that loans need to be made available to some organizations in the culture and sport sector, despite their fragile financial situation, without which these institutions will almost certainly fail, with the primary purpose of protecting these sectors through the pandemic.”
During the pandemic, Premier League clubs accounted for 57% of DCMS sports loans, with the Rugby League taking a total of 64% of total loans.
Rugby union (£24.2m), horse racing (£21.5m) and tennis (£14.3m) were the second biggest beneficiaries, while non-league football clubs received £13.4m.
