MARK DODSON is coming under mounting pressure from clubs to explain why they have not yet received any money from the £15 million Covid support grant awarded to Scottish Rugby from public funds.
The governing body’s chief executive said earlier this year that the grant from the Scottish Government – plus another £5m loan – was meant to “repair the damage to our revenues created by the pandemic [and] allow the Union to resume its core functions with its workforce intact.” However, a letter from the government which has now been made public following a Freedom of Information request said the money is designed “to assist rugby clubs and organisations across Scotland”.
The letter was accompanied by an application form designed to be completed by clubs seeking a grant. There is no record to date of any club being offered an opportunity to apply for a grant, far less actually receiving any money.
Dodson will address a meeting of the SRU Council (which represents the member clubs) on Wednesday night, when he expects to allay fears that the club game is being bypassed.
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The letter which has triggered this situation was sent by an unnamed (redacted) Scottish Government official to former Scottish Rugby Chief Operating Officer Dominic McKay on 20th January. It states:
“I am pleased to be able to confirm funding to support rugby clubs across Scotland that have been affected by the COVID-19 pandemic.
“The funding approved by Scottish Ministers is intended to ensure rugby clubs at all levels of the game across Scotland are better able to cope with the financial challenges that COVID-19 has brought until such a time as spectators are able to return safely to sports events in larger numbers.
“Scottish Ministers in exercise of their powers under Section 23 of the National Heritage (Scotland) Act 1985 hereby offer to give to Scottish Rugby Union (“the Grantee”) a grant of up to £15,000,0000 (fifteen million) STERLING, payable over the financial year 2020/2021 to support rugby clubs across Scotland that have been affected by the COVID-19 pandemic, which is more particularly described in Part 1 of SCHEDULE 1 (“the Project”) and subject to the following terms and conditions.
“I hope this funding demonstrates the Scottish Government’s commitment to both men and women’s rugby across Scotland across all levels of the game.”
SCHEDULE 1 (“the Project”) is attached. It states:
“The purpose of this funding £15,000,000 (fifteen million) is to assist rugby clubs and organisations across Scotland in dealing with the financial impact of the COVID – 19 pandemic.
“This funding should be used to support rugby activity in order to protect jobs and infrastructure across all funding recipients.
“Rugby Clubs receiving funding hereby provide an undertaking to the Scottish Rugby Union that the full grant amount will only be used to support ongoing Club rugby related operations, will not be used to fund any player transfer fees prior to the end of the 2020/21 season, and will not be withdrawn from clubs by Owners or Directors.
“A grant approval form for completion by Rugby Clubs (on the onward disbursal of funding) is included overleaf.”
Having been made aware of the letter by concerned club members, SRU President Ian Barr requested clarity on the situation from Dodson, and a remote meeting of the Council was arranged for last Tuesday [13th April] so that the Chief Executive could give a presentation on the matter.
Barr requested that the Council should have sight of any other relevant paperwork related to the grant before the meeting. However, it appears that this information was not forthcoming, as the meetingwas cancelled at late notice. Barr subsequently told the Midlands clubs’ Forum meeting last Thursday [15th April] that the paperwork has now been fully released to the Council and a new meeting date of Wednesday [21st April] has been set.
Meanwhile, a further Freedom of Information request has been made by a club official to uncover all relevant information pertaining to the grant, and it will become a major bone of contention if it emerges that Murrayfield did manage to retroactively negotiate out the clear intent to provide direct support to member clubs.
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The concern is that rather than being used to support all areas of the sport, the money has been absorbed into Murrayfield’s cashflow, perhaps helping secure the £20.3 million in bank borrowing facilities required to finally get the 2019-20 accounts signed off by auditors PWC, and maybe even providing the basis for an aggressive recruitment drive which has seen Scotland’s two pro teams responsible for just under 50 percent of all new [non-Academy] signings so far by European-based PRO14 teams ahead of next season. Edinburgh have announced six new signings, Glasgow Warriors have announced 10, from the current total of 34 for the league.
It is worth noting that the letter in question is dated 20th January, which is 41 days after the Scottish Government’s emergency funding for sport package was announced, and 29 days after Dodson told the third and final instalment of the last year’s SRU AGM that:
“We have not yet been presented with the detailed terms of the government support package or a date for distribution. But it is clear that this funding is to be used to repair the damage to our revenues created by the pandemic. In short, there is an expectation that this emergency funding is intended to allow the Union to resume its core functions with its workforce intact. It is not there to support new or expanded projects, specific programmes, or particular sectors of the organisation.”
By the 24th February, Dodson was telling journalists that the grant money had been received in full, and that:
“We have had a material grant from government that has allowed us to repair our balance sheet to a certain extent and that has been enormously helpful.”
The Scottish Government’s emergency funding package for sport raised more than a few eyebrows after it was announced on 10th December that Scottish Football was getting £20 million loan funding for the Scottish Premiership and £10 million in grants for all other levels out with the Premiership, while rugby was getting £5 million in loans and £15 million in grants.
“What was striking was that half the grant funding was for rugby – and only a third went to football,” said Lewis Macdonald, chair of Holyrood’s Health and Sport Committee.
Scottish Rugby’s Club Hardship Fund, which was launched just a few weeks after lockdown and paid out almost £400k last June, pre-dates the Scottish Government grant.
WHAT HAPPENED TO THE SG / SRU LOAN TERMS & CONDITIONS?
6 years loan duration suddenly becomes 20, and the interest rate drops from EU base of 1.9% to zero%!
LETTER DATED 18 January 2021 from MINISTER FOR PUBLIC HEALTH, SPORT and WELLBEING to LEWIS MACDONALD, MSP, CONVENOR, HEALTH and SPORT COMMITTEE’s LETTER OF 22 December 2020 (subject – Scottish Government Covid Emergency Financial Support for Sport Bodies)
Q. “What is the duration of these loans, including those available to rugby? ”
A. “It is anticipated that loans arrangements will be consistent between rugby and football and we have indicated to them that the loan period will likely be a maximum of six years, however, the discussion on this matter is still ongoing. Draft terms of loan have been issued to the Scottish FA for consideration.
We have provisionally indicated that loans will be charged at base rate interest that is currently 1.9%, which is an EU rate. This rate should be used despite the UK leaving the European Union and is part of the EU Exit transition agreement. However, further analysis is required of the subsidies chapter of the UK-EU Trade and Cooperation Agreement, which came into force on 1 January 2021, before confirmation that this is the interest rate which will be offered.”
EXTRACT FROM MINUTES OF SRU BOARD MEETING ON 25 March 2021
“Scottish Government Loan:
Reference was made to the Chief Executive’s paper on the Scottish Government loan funding of £5m. It was explained that the loan was interest free and for a period of 20 years. The main conditions of the loan agreement and intended uses to support strategy proposals and member clubs were highlighted in the paper and then discussed. It was also noted that because public money was involved there would be increased scrutiny and requirements for detailed reporting to the Scottish Government.”
“Cashflow:
Cashflow continued to be monitored very tightly. There continued to be some uncertainty around the timing for receipt of future distribution payments from Pro14 and EPCR due to the disruption experienced in those tournaments during the pandemic. A more detailed cash management strategy would be brought to the Board after the conclusion of the budget process. This would include reviewing the credit facilities with Bank of Scotland.”
So Dodson has again been found unfit for office. How many times is that? Must be double figures at least.
There are three distinct issues at play here:
1. Was the application to the government fraudulent in nature as this was to be distributed to clubs and not withheld by the union?
2. Did the withholding of information around what those funds were intended to be used for, from the union clubs, constitute moral turpitude in relation to the duties and legal obligations of disclosure a director of a company is governed by?
3. What effect has the withholding of funds to those clubs have on employment, debts, balance sheets and ability to survive within a community?
The above, if correct, constitutes at the very least morally questionable behaviour and at worst criminal deception of both a government and a union.
I’m just waiting or the “let the pro’s do their jobs” crowd to chime in and tug their forelocks.
I will reserve judgement until a more balanced understanding of the situation is brought to light from the SRU, as of right now there is only suspicion raised by a journalist who is clearly biased against the current regiment (no better than Stephen Jones imo). If something dodgy is going on then fair enough, hell should rain down upon them, however lets wait until we know all the facts shall we?
Or continue with the bashing of others who participate on this blog and ridicule the SRU, your choice folks.
My choice would be, don’t bank on the money until the cheque has been cashed, if you get my drift.
Oh dear Neil.
“suspicion raised by a journalist who is clearly biased against the current regiment”. I assume you mean regime?
It’s a fact that the award letter from the Scottish Goverment states:
“The funding approved by Scottish Ministers is intended to ensure rugby clubs at all levels of
the game across Scotland are better able to cope with the financial challenges that COVID-19
has brought until such a time as spectators are able to return safely to sports events in larger
numbers.
The Scottish Ministers in exercise of their powers under Section 23 of the National Heritage
(Scotland) Act 1985 hereby offer to give to Scottish Rugby Union (“the Grantee”) a grant of up
to £15,000,0000 (fifteen million) STERLING, payable over the financial year 2020/2021 to
support rugby clubs across Scotland that have been affected by the COVID-19 pandemic,
which is more particularly described in Part 1 of SCHEDULE 1 (“the Project”) and subject to
the following terms and conditions:
I hope this funding demonstrates the Scottish Government’s commitment to both men and
women’s rugby across Scotland across all levels of the game.”
Rugby clubs at all levels of the game!
Now contrast that with what’s been said from Murrayfield. Up till yesterday it was being used to repair the balance sheet.
I’m struggling to see what is biased about producing the article given the context of the award letter. I expect David has seen the document and the article is based on it.
Perhaps best to let journalists do their job?
@Neil – No one is “bashing” anyone. What we are looking for is sadly lacking transparency & accountability for the state of our union. Its not unreasonable with the initial evidence at hand to have grave concerns about how this was handled.
To blindly trust the incumbents to “bring to light” their understanding is naïve at best. Do you think they are going to come out and say “fair cop guv”?
They have already attempted to spin this with the announcement yesterday, which was hastily put together after this became evident. Dodson is well known for loving a PR opportunity and yet yesterday it was rushed out without fanfare or ceremony for such an example of largesse.
The clubs have a right to know what’s going on within their union. Its not Dodson’s choice whether or not that is the case. It is a legal right of any club or member to ask those questions.
If their is evidence of malfeasance or fraud then its the Financial Crime Unit of the Lothian Constabulary that the clubs should be going to as the first port of call.
This is how these situations occur when people “let the pro’s do their jobs” or have you forgotten Lehman Brothers and the global financial crash. Accountability and transparency are everything when taxpayers or consumers money is involved.
I think you should ask those pros you visit to explain things to you Neil.
Grant – following receipt of all the relevant FOI responses plus active personal involvement at Holyrood (Health & Sport Committee scrutiny processes and Cross-Party Group on Sport dialogue) there certainly appear to be grounds for suspicion that the successive Sports Ministers were either misled as to the Union’s need for financial support or had misinterpreted / misunderstood the figures and rationale presented by the SRU and reviewed / endorsed by Sportscotland.
You refer to “fraud” at 1. in your comment. We possess all relevant items of correspondence and recorded communications between the SRU, Sportscotland and the Scottish Government, which are very revealing, although some key areas are redacted. Nevertheless, efforts continue through appropriate legal channels to uncover the precise details of the submissions that persuaded the SG to advance such unusually significant and (relative to other sports) substantial, emergency funding assistance to the SRU, packaged as it was.
What we do know for sure is that neither the grant (£15m) nor the loan (£5m) was intended simply to provide the Union with additional unconditional largesse, from the public purse. The loan was to have carried similar terms & conditions as that awarded to the SFA for football – repayable over a term of 6 years, at 1.9% per annum interest (EU base rate). The grant reporting and observance obligations are to extend over 6 years. Interestingly, while the grant awarded to football (SFA) is quite specific and prescriptive in detailing where and how the grant monies are to be disbursed across the football landscape**, the same is not true or well-defined in the case of rugby (SRU).
——————————————————-
**”Emergency grants worth £10 million were provided to the Scottish FA on 29 December, and will be split between football clubs and Associations as per the distribution mechanism agreed between the Scottish FA and the Scottish Government. The funding will support clubs below Premiership level after the loss of spectator revenue due to the coronavirus (COVID-19) pandemic, with £10 million coming from the Scottish Government’s emergency sports package that was announced earlier this month. This does not include a further £1.35 million from the National Lottery.
Championship clubs will receive an equal share of £5 million, League One will receive £1.5 million and League Two will receive £1 million, with the remaining funds split between the lower leagues, women’s football and the affiliated national associations. The grants will be administered by the Scottish FA. In particular, (£20,000 to Scottish Women’s FA – £150,000 to Scottish Women’s Football League 1 and £20,000 to Scottish Women’s Football League 2).”
@ron – Thanks for the comprehensive update. Very informative.
so the SRU hardship fund has been paying out £400m. Before the govt grant, and with income stopped at that point. Which left a hole in the finances. And that was undersubscribed from clubs, there was £500m available. And a second phase to be considered.
Non story
Its 400,000 not 400 million. That’s spread across 241 union clubs and equates to an average payment of less than £2k per club.
If we are talking 15 million then at least 10 million of that should be for clubs. Not so Dodson and his team can be creative about credit line applications to banks. If this were the case then clubs, on average, would receive around £40k each which might be the difference between closure and survival for some.
Hardly a “non story” particularly if there has been any alleged malfeasance around what information was given to the government about the application, and then what has been stated to the clubs by the union.
yeah, 400k my error/typo
point remains, SRU set up a hardship fund when income had already been lost. It was undersubscribed. FACT
I’m curious about how much you think should have been for “clubs” – is that in the govt grant stipulation or is it your opinion?
Might also comment on whether clubs have applied directly for govt help via furlough (for employees), business help for loss of income etc.
It isn’t a non story if there is malfeasance; but there is none proved in that article – its the usual mud slinging by ToL and hoping enough sticks.
You are obviously one of the “let the pro’s do their jobs” lot.
You are the one without facts. FACT. Most were deterred from applying for the fund and it was by design. How Dodson and his crowd spin it is neither here nor there. They are amateur clubs, not commercial enterprises in the main, and run by volunteers. It is their money that is in the union which, unfortunately, has been trusted to these people who are consistently poor in judgement and could not give a curdy for the people who actually own the union.
The union is not a private enterprise owned by Dodson where he can do as he pleases. He is subject to scrutiny from anyone whop pays a membership/fees to said union.
Mud slinging occurs without fact. The facts are there to see.
No club has received any of the 15 million that was intended for them. The union made no attempt to make clubs aware of this money and its intended use. I am not sure what you think is unclear…or did you not read the article?
There is never one season with this lot whereby there is not some kind of financially related drama…what does that tell you?
But you knock yourself out. Keep on drinking the soup they give you and the rest of us will keep asking the difficult questions that need to be asked.
One of your more pathetic responses trying to defend the indefensible.
The fund was complex and very specific in what you could apply for. Many clubs, mine included, decided a) we wouldn’t get anything and b) the effort wasn’t worth it.
Do also remember that SRU limited is wholly controlled by the members of the union. They gave us our own money as a fund!
so you didn’t apply. Now moan about getting nowt.
What costs did you think should have been covered to help your club survive and help it get ready to return to rugby? I am genuinely interested
The unfortunate truth is that questions to certain individuals who are employed to answer questions rarely do without obfuscation or some would even suggest borderline mendacity.
This is not a case of ‘give a dog a bad name’ one particular Mutt in question appears more than capable of earning the ‘Tag’ for itself.
Sceptic9 you are deliberately conflating two very separate issues. Nice of you to try and muddy the waters though that seems to be your usual MO.
The club hardship fund was a useful support mechanism. You can find those clubs who were successful on the SR webpages. The awards ranged from £333 to £11k and typically was for loss of income. If you had sufficient funds in the bank it was unlikely you would get an award.
The second hardship fund was for restart. Specifically electrical testing and legionella disinfecting. We were successful with that award. For obvious reasons no one has drawn down that funding.
The Scottish Govt funding is a whole different issue. Mr Dodson is quoted as saying this will help repair the balance sheet. Now suddenly it was part of a fund all along. Amazing what happens when the details of the official award comes out isn’t it.
On the subject of other govt funds. That would be furlough as Scottish Rugby has claimed for? That would be hospitality funding which I extremely Murrayfield Experience has claimed for?
£400 million? Non post.
@Dom ward – where did the money for the SRU hardship fund come from? SRU income was decimated as well. The answer is it was debt, rebalanced by the govt grant/loans.
I’ve yet to see anyone one of the so called experts on here explain what re-start fund were needed and refused. What I am seeing is some sort of delusion that govt cash would just be a bung to clubs who asked for it.
@septic9
Perhaps go read the Annual Report? The debt financing you talk about was only agreed late last year.
I’m not sure what you are trying to argue here? That SR “found” £500k which wasn’t fully allocated. Or had to borrow that sum?
400 million?.
Dream on.
It was 400k across every club in scotland
I wouldn’t mind putting ‘Folding Money’ on Thursday mornings edition of OSL:-
‘On being questioned about the letter addressed to him from a Government source Mr.name redacted stated that “I am bound by the confidentiality agreement that I signed and as I am no longer employed by them I would need to refer your questions to them for any further comment”.
On being questioned about the above letter another ‘redacted name’ believed to be undisputedly his former Boss at a location somewhere close to a Rugby Stadium in Edinburgh an individual responded “I’m glad you asked me that I’m not sure that I recognise that particular bit of correspondence, in fact I’m not sure that it even reached my desk, so I would be surprised if I was involved with this, I will need to check my Diary and Notes and try and speak with …?… and see if he can refresh my memory, but in these difficult times it is very difficult to get a clear line on Skype or Whatsapp and I have been so busy trying to think of appropriate answers to all the previous questions on other matters that still require clarity or explanation”.
Of course that is all tongue in cheek and I fully expect that all the questions will have clear answers on the Thursday Edition of the OSL.
However just in case and for Health and Safety Reasons it is advised that Scottish Rugby Supporters do not hold their breath whilst waiting for answers of a clear and unambiguous nature.
You have to hand it to Dodson for managing to get such a great deal but it is concerning if the cash isn’t going where it should. Hopefully the money is just resting in the accounts…
Why?
Mr Dodson’s had nothing to do with this deal. Dom McKay led the Scottish Government liaison and discussion.
So nice attempt at giving kudos for something he didn’t do.
Good to see pressure for the truth being applied to Dodson and his cronies. With power comes accountability. Time to get real answers, not just evasive “fudges” from the SRU Executive
Another excellent piece of investigative journalism by David Barnes!
Mr Dodson the clubs are the Scottish Rugby Union.
We the clubs are now entering in what is now the close season with no rugby played.
The clubs need the money now without it sadly many clubs in there local community will not survive.
And the resources that Scotland has they simply can not afford to do that.
The £15 million was to help grassroots rugby survive.
Maybe at the council meeting on Wednesday you can start to allocate funds to grassroots clubs instead of the pro game .
Dodson has many questions still to answer regarding his conduct (as highlighted in the earlier employment tribunal featuring Finn Russell’s father). This just adds another level of concern, particularly for grassroots clubs who have heard many platitudes from him over the years with few discernible benefits. Let’s hope he is held to the fire this time and doesn’t wriggle out of giving some straight and supportable answers. What is really happening with the governance of our national body, The Scottish Rugby Union? Money certainly seems to be more at the core of it than the sport of rugby! Who is benefiting from all the deals being done? Some transparency and clarity would be welcomed by clubs and supporters.