Covid grant of £1.5m to Royal County Down Golf Club despite ‘significant bank balance’

A Covid-19 hardship fund for sporting organisations in Northern Ireland has been criticised for not taking bank balances and reserves held by applicants into account.

Tuesday, 22nd June 2021, 12:01 am
Updated Tuesday, 22nd June 2021, 1:35 pm

Auditor General Kieran Donnelly’s report highlighted how the largest grant of £1.5 million was paid to Royal County Down Golf Club, which had a “very significant bank balance and a high level of reserves”.

Mr Donnelly said while he appreciated the scheme had to be delivered in a “very short period of time and under considerable pressure”, he urged that lessons be learned by the Department for Communities and Sport NI.

The Sports Sustainability Fund (SSF) was one of a number of schemes delivered by Stormont departments to help various sectors deal with the financial impact of the coronavirus pandemic.

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The funding Royal County Down Golf Club received underwrote its profits for last year
The funding Royal County Down Golf Club received underwrote its profits for last year

Out of £25 million allocated by the Executive, grants collectively worth £23 million were handed to organisations.

Of the £23 million, £5.1 million was distributed across 22 sport governing bodies, including £1.5 million to Ulster GAA, £1.7 million to the IFA, £1.5 million to the IRFU and £0.4 million to 19 other sporting governing bodies.

Some £17.9 million was distributed across 430 sports clubs.

This breaks down as £5.9 million to 180 Gaelic games clubs, £4.9 million to 77 IFA clubs, £4.2 million to 25 golf clubs, £0.7 million to 26 rugby clubs and £2.2 million to 122 other sporting clubs.

The grant awards were calculated by comparing the income and expenditure for the Covid-19 year with the average income and expenditure for the previous three years.

Mr Donnelly’s report highlighted that there was no requirement in the scheme to consider the reserves or bank balances held by organisations and whether the losses incurred by the organisations would lead to the imminent risk of closure.

The report found that the largest grant paid under the scheme was £1.5 million to Royal County Down Golf Club, which it said had a “very significant bank balance and a high level of reserves”.

“In some cases, the impact of the scheme was to underwrite previous average profits. This would have been the case in all clubs who had made profits between 2017 and 2019. While this underwriting of profits is likely to have been unintended, the fact it has happened was not an appropriate use of public spending,” the report found.

“As an example of this, in the Royal County Down Golf Club application its accounts showed an average annual profit of £657,000 in the three years before Covid-19.

“In 2020-21 it projected a loss of £905,000 because of Covid-19.

“The grant payment made to it under SSF was £1,562,000, which not only paid for its projected loss for the year but returned it to the same profit level as in previous years.”

The report found that support for sport in Northern Ireland was broadly similar to the Republic of Ireland and “considerably greater” than in England, Scotland and Wales.

It also found that the scheme in Northern Ireland “particularly benefited the golf sector”.

“Northern Ireland Audit Office analysis shows that the golf sector in general received more in Northern Ireland than anywhere else in these islands,” it found.

Mr Donnelly acknowledged that the scheme was successful in providing funding to a wide range of sports which were in financial need.

He also described as “commendable” that the scheme sought to target support according to losses rather than simply allocated a fixed amount of funding.

“Nevertheless, I have identified some matters which are clear in hindsight and may be due in part to the pace at which the scheme was deployed,” he said.

“In particular, at the outset a better modelling of potential outcomes could have led to many of the issues in this report being identified and addressed before the scheme was finalised.

“The department and Sport NI should consider the lessons to be learned from this scheme and share these with the rest of the public sector. It should also discuss with counterparts in other parts of the UK and Ireland to identify what worked well in each jurisdiction and to share any learning.”