Official Report: Minutes of Evidence

The Chairperson (Mr Humphrey): I welcome to the meeting Ms Tracy Meharg, accounting officer and permanent secretary in the Department for Communities; Mr Tony Murphy, head of sport at DFC; Ms Antoinette McKeown, chief executive of Sport NI; Mr Ian Weir, performance governance manager, Sport NI; and Mr George Lucas, chair of the Sport NI board. Good afternoon, everybody. Thank you very much for taking the time to join us this afternoon. We very much appreciate it.

All our witnesses are joining us remotely. Ladies and gentlemen, Mr Donnelly and Ms O'Hagan are in the Senate Chamber, and Mr Bingham from the Audit Office is joining us remotely, as is Mr Stevenson. At this stage, I hand over to Ms Meharg and Ms McKeown to make opening comments, and then I will come to members for questions. Ms Meharg, would you like to go first?

Ms Tracy Meharg (Department for Communities): Yes. During the pandemic, the Department for Communities played a key role in the mobilisation of a relief support that went far beyond our normal operating procedures, even those designed for an emergency response. I am proud of what has been achieved in these unique times. As part of the Executive's response, my Department and its partners stepped up to the challenges and delivered over £300 million in support.

The Northern Ireland Audit Office (NIAO) report has provided an insight into the rationale for the sports sustainability fund, the development of the business case, the design of the scheme, how it was administered and the outcomes. The report recognises the challenging environment in which the fund was delivered. The sports sector was indicating that the speed of response was crucial, and a balance had to be struck between the money getting out where and when it was needed and the level of due diligence undertaken.

The report raises a number of matters that, it notes, are clear with hindsight and acknowledges that those are partly due to the pace at which the scheme was deployed. A key challenge was that the funding was not allocated until October and November. Undoubtedly, the late allocation presented challenges for planning, modelling and delivery.

The timescales also meant that the Department and Sport NI were working in parallel to develop the business case while developing the scheme, as opposed to the normal linear process over a much longer period. I recognise that that has resulted in the view that the intent laid out in the business case was not fully reflected in the scheme design. However, the objectives of the scheme, as clearly articulated in the business case, were to:

due to COVID and to enable clubs:

That policy intent has been achieved.

Had more time been available, we would have undertaken more comprehensive modelling to inform the scheme design and, for example, considered further the use of a cap. The scheme was not perfect. With hindsight, it could have challenged the sector more on evidenced need, particularly where organisations were receiving substantial sums. However, I welcome the Comptroller and Auditor General's (C&AG) acknowledgement of the huge pressure and significant urgency under which the scheme was developed; that it was successful in providing funding to a wide range of sports in financial need; that it sought to target support according to losses due to COVID, rather than simply allocating a fixed amount; and that it ensured that significant losses incurred by sport were addressed to allow sport with huge health and societal interests to continue post COVID.

We are already working to consider how conclusions reached by the report, along with our evaluations of other schemes, can inform the lessons learned. I will pass to Antoinette, who will say a few words.

The Chairperson (Mr Humphrey): Antoinette, can you hear us OK?

Ms Antoinette McKeown (Sport NI): I am sorry. I am having some technical difficulties.

The Chairperson (Mr Humphrey): We can hear you now.

Ms McKeown: Thank you, Tracy, and good afternoon, members. As you will be aware, sport is a huge part of society in Northern Ireland and makes a significant contribution to the local economy. For years, we have understood the value represented by the social infrastructure of sports clubs. When the pandemic struck, however, everyone saw that value. When government needed volunteers on the ground to deliver food parcels or medicines or simply to check on vulnerable people, sports clubs were to the fore in that effort.

To protect that infrastructure throughout COVID, Sport NI engaged extensively with all parts of the sector to understand the challenges that it faced on the ground. That included a co-design process for governing bodies, clubs and the Northern Ireland Sports Forum to help to inform the development of the sports sustainability fund. We recognise that some awards attracted media commentary, and, no doubt, members will wish to examine those in depth today.

Like Tracy, I welcome the C&AG's acknowledgement of the huge pressure and significant urgency under which the scheme was developed and that the scheme was successful in providing funding to a wide range of sports in financial need. The Northern Ireland Audit Office report also references how COVID funding schemes operated in other jurisdictions, and, of course, we considered those. However, this scheme, which was designed for sport in Northern Ireland, had to be specific to the evidenced need on the ground here.

Sport NI will complete a post-project evaluation of the scheme, and it will complement the lessons learned, as set out in the NIAO report. Sports organisations are certainly in a healthier position to support communities as they recover from the health and societal impacts of the pandemic. However, significant restrictions remain in place for sport. It is clear to us that challenges lie ahead and the resilience of our sporting sector continues to be tested, but we also see real opportunity, with the right strategic support, to pursue our mission of maximising the power of sport to change lives.

The Chairperson (Mr Humphrey): OK, thank you very much. Before I bring members in, may I ask how the fund arrived at the position of having £25 million? How did you know that £25 million was needed or could be spent?

Ms Meharg: There was a lot of engagement with the sector on that, including asking governing bodies to give us estimates of their financial need. We had to turn that work around quickly. We did not get inputs from all the governing bodies, so we uplifted our estimate of the quantum that would be required. That is how the level of need was defined in the business case. We acknowledge that the modelling was not perfect at that stage, but it was not that far away from where it landed.

The Chairperson (Mr Humphrey): You had conversations, meetings and whatever with the Gaelic Athletic Association (GAA), the Irish Football Association (IFA), Ulster Rugby, the Golfing Union of Ireland and so on.

Ms Meharg: Yes, there were meetings with a range of organisations or governing bodies throughout the process; indeed, over a longer period, some of those governing bodies were appearing in front of the Committee, and some were speaking to our Minister. When we were developing the business case, we asked for estimates. As you will note from the NIAO report, not all governing bodies gave us estimates in time to include them. The amount shown in the estimates was £19·7 million, but that was uplifted to £25 million to take account of governing bodies that had not come back to us.

Mr Hilditch: It is a pretty concerning situation and has achieved some public acknowledgement through certain media channels. A couple of clubs, including Malone Golf Club and Crusaders Football Club, while having done nothing wrong, have had an advantage over others. How was that allowed to happen? There seemed to be so many people involved in it: the Department, Sport NI and the governing bodies. When things seemed to be going wrong or maybe not achieving what was set out, was there any opportunity to draw back, recreate the criteria and have a look at the scheme, rather than handing out vast amounts of money that, most of the general public would say, were not necessary? That is particularly so in the golf club situation, and Crusaders were rewarded for not playing on the pitch. They did not get the European money; they got it directly from government instead.

Ms Meharg: I am comfortable that the objectives laid out for the scheme were achieved. The first of the two objectives set out in the business case was to:

The second objective was to:

The scheme was there to support them in a time of financial loss and prepare them for the future. To do that, we looked at the evidence of net losses over a three-year period. Sport NI designed a scheme whereby the net loss was evidenced by looking at three years of accounts. It was a transparent and consistent process.

The general public might have views on the amounts involved, and I will come to those. In some ways, it is not surprising that large clubs evidenced much larger losses. Take for example Royal County Down (RCD), which is mentioned in the media a lot. It gets a large proportion of its funding from incoming tourism. During this period, it lost in the region of £2 million. It was able to cut back on some of its operating costs

The Chairperson (Mr Humphrey): Tracy, can you hear me?

Ms Meharg: Yes, I can hear you.

The Chairperson (Mr Humphrey): Your sound was breaking up, and we lost you. Perhaps you would go back to where you began to talk about Royal County Down's income from tourism, if you do not mind. Please start from there, because the sound broke up after that.

Ms Meharg: OK, my apologies.

The Chairperson (Mr Humphrey): It is not your fault.

Ms Meharg: Royal County Down is, of course, a successful asset to have in Northern Ireland. It generates significant tourism. I understand that golf tourism alone is worth £56 million. The club could not furlough people or stop paying salaries. Had it stopped looking after its greens, for example, even for a short period, they would have taken years to get back to normal. There was criticism of the fact that the club had a significant bank balance. However, that money was not all distributable cash. A significant part, 40%, was prepaid green fees, which is, in fact, a liability, not an asset. Also, Royal County Down has a significant programme of capital investment that it started three years ago. Clubs of that sort need to make surpluses to reinvest. They are not profits in the traditional sense of the word; they are for reinvesting in the sports asset. Had the club not continued to invest during that period, there is little doubt that, at the end of it, the grounds could have been in such a condition that they would have caused the club to lose its position.

The point is that they might look like large sums of money, and they are, but the scheme was designed to deal with the very smallest club and the very largest club, so there is a large distinction between those amounts. However, when you look at the losses and at what was done, there is a strong rationale for it.

Mr Hilditch: I understand that. You have given a lengthy answer, and I appreciate it. However, the losses should have related to the COVID pandemic. We know that some of the moneys paid out on those three-year losses were related not to COVID but to more general usage. In one sport, where people had lost out on prize money on the pitch over the season, a club was able to claim that back through another source, thereby placing other clubs at a disadvantage. I can understand your going on quite lengthily about the pandemic, but money was built into those claims that should not have been. The initial criteria were such that anything could have gone in, and that is where the clubs did not do anything wrong. When and where did you see that going wrong, and who had an overview of it? It was always going to come out wrong at the end.

Ms Meharg: I have no evidence that things went wrong. If you are talking about Crusaders and the fact that money for European competition was included, I will pass over to Sport NI to give you that detail. My understanding is that the costs largely equalled the amount that they got in and that that was looked at over a three-year period. I will pass to Antoinette to give you a more detailed response, if that is OK.

Mr Hilditch: That is fine.

Ms McKeown: The treatment of Crusaders Football Club was consistent with that of every other football club. We looked at clubs' accounts over the preceding three years, and that is how we defined net losses. Those accounts included the prize money for accessing the Europa League. However, the Northern Ireland Audit Office report recognises that football clubs have to pay out a lot of expenditure to get their team to Europe, which includes chartered flights and a range of other expenses. We recognise that our programme was designed at pace in a highly dynamic environment. We wanted to remove as much subjectivity as possible. Alongside our key principle, which is value for money, we looked to factor in transparency, integrity and consistency. That consistency is really important. We also recognised that, had we had time for modelling, we would have been able to factor in or, indeed, factor out some of the idiosyncrasies of individual sports, such as that prize money. However, as Tracy said, we simply did not have time within the timescale, which was from getting the money late in the year to when we had to deliver the scheme. We recognise that.

Mr Hilditch: OK, thank you. At least that is recognised. I appreciate your comments.

Ms McKeown: Thank you.

Mr Muir: I thank everyone for joining us. Joining the meeting remotely can be a challenge, but we will try to work through that.

It is important that we have clear answers during the session and that there is no attempt at using smoke and mirrors. There is serious public concern about the scheme. It is important that, as the Public Accounts Committee and as Assembly Members, we are able to bring transparency and scrutiny to the issues.

I have a number of questions, some of which are closed and some of which are more open. The first is about the fact that it is clear that there was underwriting of profits in the scheme. In other schemes, that was clearly not the case; the focus was very much on dealing with hardship and the losses incurred as a result of COVID-19. In this scheme, there was underwriting of profits, and there is serious concern about that. Were the Northern Ireland Executive informed at any point that the scheme would involve underwriting profits?

Ms Meharg: You spoke about other schemes being different, and they were different. Even in my Department, we ran many different schemes that were co-designed with a range of sectors in different ways. You spoke about underwriting profits, but, in not-for-profit organisations, we talk about "operating surpluses", not "profits". Surpluses are used to reinvest in the sport. Where net losses led to some of the surpluses being recouped, that surplus was reinvested in the sport. That meets the criterion of enabling the sport to continue and to return to the pre-COVID situation. I will be clear: all of the losses that we looked at resulted from COVID. There is no doubt about that. The things that were taken into account, such as loss of ticketing, green fees, match days and hospitality, were all related to COVID.

Mr Muir: The scheme for charities that the Department brought forward was different from this scheme. What was the rationale for the difference between the two schemes in relation to underwriting what you describe as surpluses but others would commonly understand as profit?

Ms Meharg: The Department ran many schemes: charity schemes, art schemes, schemes for homelessness and schemes for lots of different things. Each scheme was developed differently, according to the needs at the time. There was some press comment that charities that had surpluses were not eligible for the fund. That is not correct; indeed, in the second part of the scheme, if charities had used their surpluses, they were able to recoup up to three months of surpluses from the scheme.

The schemes were delivered at different times during the year, and there were different estimations. I will take the charity scheme as an example. At one stage, there were estimates that we would need £150 million for charities, and we were given £15·9 million. We had to design a scheme that would go as far as possible to meet the needs of as many charities as possible, so a cap was set. I emphasise that no two schemes are exactly the same. Different schemes were delivered at different times, we had different information, we worked with different delivery partners, and there were different factors that we had to take into account.

Mr Muir: We need to be clear about why we are having the inquiry and why the discussion is occurring today. Many other organisations, businesses and individuals were experiencing real hardship. The response from Departments, including yours in some instances, was to say, "You have reserves, and you should utilise those reserves. That is the purpose of those reserves. Support will be given only when you face imminent risk of closure, and it will not underwrite surpluses from previous years". Yet, in this scheme, it seems that that rule book was cast aside. As you outlined, there was no three-month cap on reserves, the underwriting of profits occurred and significant payments went out. The scheme's original objectives, as it has played out, do not seem to have been focused on. There seems to have been a divergence from those. This question is for you and Sport NI: was there no point at which there was a sense check to realise that there was a divergence from the scheme's original objectives? Anyone processing such significant payments should have been able to see that there was something seriously wrong with the scheme.

Ms Meharg: I will answer that and then pass on to Antoinette, if that is OK. Let me be clear: sport plays a massive part in society. It is not just about sustaining

community and social. Therefore, whilst one of the outcomes that we wanted was to sustain organisations that were genuinely on the verge of closing, we also wanted to sustain the sector so that it was ready to play its part moving forward.

I will pass on to Antoinette and Sport NI on your other comment. Some of the sums were large. When we look at it now, I acknowledge that, right at the front end, if we were designing the scheme again, we would build in a stronger statement of need. We did not do that, and that is acknowledged in the report. The money paid against those surpluses is an investment in sport, in infrastructure and in making sure that sport can play its role in society moving forward. I will pass on to Antoinette.

Ms McKeown: Thank you, Tracy. Basically, Sport NI took on board the two key objectives that were set out in the business case clearly. The first was to:

The second objective was to:

Essentially, the fund sought to ensure that clubs were sustained and ready to open and support a return to sport. The £25 million secured from the Executive was to sustain the sports sector, which is, as Tracy said, a very diverse sector from grassroots sport through to professional teams. That recognised the vital role that the sector would play in recovery.

I hear what you say, Mr Muir, about the imminent risk of closure. That was not a scheme objective, nor was it used for assessment. We considered an imminent risk of closure to be a potential outcome if the funding was not provided. The business case considered the provision of grant funding at that time to make sure that clubs were no worse off and no better off, in order to sustain the COVID recovery. That is what we focused on.

Mr Muir: Thank you for that. I fully support sport. I am a member of North Down Athletic Club and North Down Cycling Club. I value sport greatly, but there is real public concern about the scheme. That concern and the reasons for it must be acknowledged. People feel that the significant sums that were paid out are difficult to justify when other organisations that were looking for support under different criteria were not given such a high level of it. Did no one in Sport NI, the Department, the governing bodies or the sports organisations raise concerns as the scheme was developing, before the payments were made, that there was something wrong and that the scheme needed to be re-evaluated? Was no warning raised by any of them that there was something wrong?

Ms McKeown: In a fast-moving environment, we decided to take the subjectivity out of it. You mentioned divergence. We looked at two questions side by side. We have been criticised in the media for not taking clubs at imminent risk of closure. At the same time, the NIAO report refers to no checks being made on payments to clubs that might have closed in any case. That was the dilemma. Those two considerations demonstrate the catch-22 situation that we were in in a very short time.

Of course, when we looked at the awards, we had not anticipated the largest sums of money going to individual clubs. If you look at the awards given out, you will see that they ranged from £42 to £1·56 million. That shows the diversity of the sector and the diversity of the

. I totally agree with Tracy that, if we were to do it again, we would include an additional challenge for substantial amounts of money. We in Sport NI have also recognised that we did not have, independent of the core team, that challenge function or sense check. We are designing that into future schemes.

In reality, the money that we gave out was evidenced against net losses across three years of annual accounts. When we came to the approval process, which went to our board, there was extensive discussion about particular awards to individual clubs. We had set design criteria from the outset, however. We recognised that, in Northern Ireland, sports can be contentious, and, in addition to the key principle of value for money that governs all our decisions, we decided to go for additional principles of integrity, transparency and consistency.

Royal County Down and other recipients of large amounts of funding met the criteria of the scheme. To decide in the middle of a process that we were not going to pay those sums out was contrary to the additional principles that we had set. We simply could not take a decision on the basis of negative media attention. Doing so might also have led to litigation. We talked about the consistency in scheme design, so, yes, there were concerns, Mr Muir, but, following extensive discussion and for the reasons that I have set out, the board approved and decided to make the awards.

Mr Muir: Thank you, Antoinette. That raises more concerns. If there was extensive discussion and concern about the level of payment and if people felt, "We have gone this far, so we have to complete it", at that point there should have been a sense check, and someone should have said, "We will have to stop this". You went ahead, however.

There is a relationship between the Department, Sport NI, as a non-departmental public body, and all the governing organisations. That relationship is meant to stop what happened. There is supposed to be feedback, scrutiny and challenge, and all failed. Payments went through. The fact that that relationship failed is a real concern. My question is more for Tracy: does that challenge function between the Department and Sport NI need to be reviewed? How did it work in that case?

Ms Meharg: We had a scheme, and we agreed its objectives. The way of measuring what we were paying was against net losses. That is what Sport NI did; indeed, the Department gave extra resources in the form of consultancy support to make sure that those net losses were evidenced.

I have said that, if we were starting the scheme from scratch, we would suggest building in something on evidenced need. For example, what would have happened if we had not given £1·5 million to Royal County Down? What would have happened if we had not given

That was not built into the application form. Having now looked at the applications in detail and at those organisations' financial position, however, I am comfortable that there is a strong additionality argument for the funding that went to them and what it leveraged for that community. The money has not gone to individuals as profit; it has gone to clubs for them to invest in sport and infrastructure. From that perspective, that is what the scheme was designed for. When people see £1·5 million, they say, "That is an awful lot of money". It would have been good to have had the evidence of need at the time that the application was being assessed. Certainly, the lesson that we have learnt is that any such scheme should have stronger challenge and additionality built in at that stage. All the diligence that I have looked at since, however, assures me that the funding was used for the purpose for which it was meant and met the scheme's objectives. It was used to invest in sport to ensure that it is in a better position moving forward.

Mr Muir: I have one last question. There was no ministerial direction on the scheme. It is exactly the type of scheme on which you would expect a ministerial direction, which we have had on many others. Are you still satisfied that it did not merit a ministerial direction and that you, as permanent secretary, can stand over the value-for-money judgement made on it?

Ms Meharg: As you are aware, a ministerial direction is normally made when a Minister makes a decision to move on with something against the accounting officer's advice. That normally happens when, for example, the accounting officer thinks that the Minister's decision does not represent value for money. In the scheme, as a Department, we

We assessed the need, and the need was there. We developed a business case, which I saw at the time and have since reviewed. The business case was proportionate to the time frame within which we were working. It set out the issues that one would normally look at in a business plan. I am comfortable that there was sufficient evidence of value for money and sufficient diligence applied to the scheme not to seek a direction.

It is not that I would be concerned about seeking a direction.

As you heard today, we had to seek a direction from our Minister around Supporting People, because we were unable to conclude on value for money for that. We felt, however, that we had sufficient information about this scheme. We felt that the business case was proportionate enough.

We on the board in the Department took the decision during COVID that our risk appetite would be higher than normal. We recognised that we had to respond really quickly and that, if we went through our normal processes for everything, we could not have delivered what we did within the time frame. I hope that that answers your question.

Mr Muir: Thank you.

The Chairperson (Mr Humphrey): Will you give the Committee a breakdown of the distribution of moneys across the sports? How much did rugby, football and so on get?

Ms Meharg: Certainly. As you know, £23 million altogether was paid out to 430 sports clubs and 22 sports governing bodies. If the figure that you are looking for is the aggregate of what was paid out to the sporting clubs and the governing bodies, it was £7·4 million for Gaelic games; £6·6 million for the IFA; £4·2 million for golf clubs; £2·2 million for rugby clubs; and £2·6 million for other sporting clubs. If you want, I can break that down further into the money that went to governing bodies and money that went to clubs. It is in the report.

The Chairperson (Mr Humphrey): If you could provide a further breakdown of the £2·6 million to the Committee, that would be helpful, but I am not asking you to do it now.

Did the Department and Sport NI take into consideration the capacity that there is across sports? For example, how many cricket clubs received money as opposed to Gaelic clubs?

Ms Meharg: I will ask Sport NI to answer the question on capacity. I am not an expert on sport, but we can tell you how much the various sports schemes got. Antoinette, do you want to answer on how we took account of the capacity out there?

Ms McKeown: Absolutely. It is a really good question, Chair. We recognise the diversity in the sector from very small organisations right up to, as we said, our big ball sports. If we had had the time, modelling would definitely have been the best approach to take. We recognise that the standard modelling frameworks that we applied may not have been fit for COVID purposes, if you know what I mean. Modelling would certainly have given us an opportunity to do more in-depth analysis, sport by sport. Remember that we have 78 recognised sports governing bodies in Northern Ireland. Capacity was considered. We gave a lot of human resource support to a lot of the smaller governing bodies that may not have had the level of paid, employed and professional staff that some of the bigger bodies, such as the IFA or the GAA, have.

I will ask my colleague Ian Weir, who worked on the implementation of the scheme and is currently working on due diligence, to set out exactly how many cricket clubs were funded as opposed to, for example, Gaelic clubs or IFA clubs.

Mr Ian Weir (Sport NI): Thanks, Antoinette. Twenty-three cricket clubs were in receipt of funding from us, while180 GAA clubs, I think, and 77 IFA-affiliated clubs received funding.

As Antoinette said, there is a real spread of capacity and capability across the sports sector, ranging from very small governing bodies up to large ones that have lots of paid professional staff. Sport NI engaged in a number of webinars to explain what we were looking for from the governing bodies and their affiliated clubs. The team working on that was available for the six or seven weeks for which the scheme was open, including over Christmas. It was essentially on call to answer questions from groups and one-to-one. We put up FAQs to assist the sector as much as we could to apply to a novel scheme. It was something that we had not put together before, certainly not in the time available. We did our best to help them through the process.

Ms McKeown: We worked through the governing bodies, so we relied on their intimate knowledge of their clubs. That was an added capability and capacity issue for governing bodies. For those that did not have the capacity to work with their clubs, we provided additional support.

The Chairperson (Mr Humphrey): Having admitted that there was an issue with the modelling, do you think that the sports that had large support from government moneys or tickets coming through the gates were at a huge advantage, given the capacity they had for such a scheme, as opposed to, for example, cricket's capacity? I declare an interest as vice president of Woodvale Cricket Club. Is that a fair point to make?

Ms Meharg: It is worth pointing out that the sports sustainability fund was not the only scheme. There was also the sports hardship fund, which was for smaller clubs to enable them to pay for necessary things, be it maintenance or insurance. As well as the sports sustainability fund, that fund supported over 900 clubs. To get access to that fund, three years of accounts were needed. That was an issue for some clubs. Other than putting in the finances, however, the application form was not that complicated. As Antoinette said, Sport NI spent a lot of time getting the governing bodies up to speed so that they could support individual clubs.

The Chairperson (Mr Humphrey): What were the rules and responsibilities of the Department, Sport NI and the governing bodies in developing the scheme? You go and talk to them. You decide that the scheme is needed, and it clearly was needed, given the number of us who were contacted by clubs in our constituencies. The Department talks to Sport NI, and then you talk to the governing bodies. How did that work?

Ms Meharg: I will start and then hand over to Antoinette. Sport NI is the Department's main conduit for sport. As you mentioned, Chair, it was late in the year when we got around to getting some funding for sport. Sport had had to get very vocal, because it had already had nine months of COVID issues. On a number of occasions, departmental officials, Sport NI and the Minister met representatives of some of the governing bodies and the Northern Ireland Sports Forum to discuss the challenges that they were facing. Sports also came before our committee. Those are some of the challenges that sport faced.

The Minister was keen for the governing bodies to have a key role in the delivery of the scheme, including communicating scheme details and guidance and sense-checking applications. Sport NI then took that work forward into the scheme guidance. The governing bodies had lots of further contact with clubs.

Ms McKeown: Between March and the end of September last year, Sport NI was engaging daily across the sports sector and with the Northern Ireland Sports Forum, with which we have a service-level agreement, to represent the views of smaller governing bodies to make sure that they had a voice throughout. We held six briefings with the sector between the start of April and the end of September. We saw a clear need. We surveyed the sector in June, and 62% of those who responded said that they would struggle to survive over the next six to 12 months. We recognised that the sector was in need of support.

We worked closely with the Department for Communities, which had a clear policy intent. The scheme's objective was for the sports sector to return sustainably. As we came out of the COVID restrictions, the sector was to be in the right position to support everyone's return to fitness levels, to bring membership back to local community clubs and to get our sporting nation going again.

As Tracy said, the Minister met representatives of over 70 sports governing bodies on 19 October. We subsequently received an indication that a £15 million fund had come through. Sport NI held a workshop on 11 November with over 80 representatives from the governing bodies of sports, from the very smallest right up to the largest. Again, we took extensive briefing from those representatives about the sector's needs.

Can you ask me that question in more detail, William? I am happy to give you any further detail that you might need.

The Chairperson (Mr Humphrey): I will expand on the question. How joined up was the scheme? Between Sport NI, the Department and the various governing bodies, what were the governance arrangements? Did people who were not directly involved have an overview of the scheme?

Ms Meharg: I will start and tell you the Department's role in that. It was responsible for the business case for the scheme and for showing that the money was there and approved. In the Department, there was a strategic oversight group that worked with Sport NI. Sport NI then set up its own project board, and Antoinette was the senior responsible owner (SRO) for the scheme's design and delivery. There were formal meetings and dashboards between the oversight group and the project board weekly. Antoinette, do you want to answer the rest of the question on scrutiny?

Ms McKeown: Yes. Thank you, Tracy. We had established a core project team in Sport NI. The project team reported to a project manager, and the project manager reported to me as SRO for the scheme. I chaired an overall COVID recovery programme board that included all members of the executive team. We met the Department weekly; in fact, we delivered a weekly report that set out progress against the scheme's objectives and identified any risks in the delivery of the scheme and any risks that might prevent delivery of the scheme. Our oversight was clearly our accountability to the Department. From October to March, our challenge function was our board. We were fully accountable to it, and it had an opportunity at every board meeting to challenge; indeed, we included additional extraordinary board meetings for decision-making and to ensure that that additional challenge function was in place.

As I said, we recognise that an additional group of staff outside of the core project team could have challenged the design of the scheme against the business case. In hindsight, that would have been a good idea, so we are factoring that into future scheme designs.

The Chairperson (Mr Humphrey): You mentioned a core project team. Were there people in that team not directly involved, or were they all from the Department and Sport NI?

Ms McKeown: Sport NI had a core team for the design and delivery of the scheme and, now, its due diligence. We reported to our board and to the Department for Communities.

The Chairperson (Mr Humphrey): Was the core team comprised of Sport NI people?

Ms McKeown: Yes, the core team was Sport NI people.

The Chairperson (Mr Humphrey): Was there no one from outside?

Ms McKeown: We also had support, through DFC, from Ernst and Young, which assisted us with applications.

The Chairperson (Mr Humphrey): May I ask Mr Lucas, as chair of the board, when it comes to governance, what role did the board play? Was the board involved in the scheme, or is it involved in the review of the scheme?

Mr George Lucas (Sport NI): The board's normal role is to approve the business case. In this instance, as Tracy said, the approval was given by DFC. The board did not approve the scheme design and would not normally do so; that is not normally the board's role. The board was involved from the outset when the money became available. We got a briefing from the CEO in October, and, at a board meeting on 17 December, we discussed the project management process for the scheme. In February, we talked about the grants and the required level of historical accounts, how small clubs might miss out and the potential for criticism of large awards. We discussed inclusivity, the need for female clubs to be able to access the fund and the promotion of the scheme. All those things were talked about as we went along. We had oversight of the scheme, and we had a role in approving the final grants, which we did.

The Chairperson (Mr Humphrey): So the board was content and had no concerns when the scheme was set up.

Mr Lucas: The board was content that the scheme was set up and that there was a robust business case and then, as Antoinette set out, that the design of the scheme was done and there had been engagement with the governing bodies. The best processes available were put in place. To go back to Tracy and Antoinette's opening remarks, the time frame, factoring in the uniqueness of the COVID-19 conditions, made it a unique scheme.

The Chairperson (Mr Humphrey): With the passing of time since the scheme was introduced and moneys totalling £23 million distributed, does the board remain content and without concerns?

Mr Lucas: The board remains content because, having had the business case put forward and the scheme designed according to criteria, with the robustness for dealing with net losses, the board, in its oversight review process, felt content that the scheme had been implemented in the best possible way, given the circumstances. The much needed funds, which we are very aware of, were getting out to the sector.

The Chairperson (Mr Humphrey): Does the board have any concerns about the distribution of those moneys across the sports codes?

Mr Lucas: Not really, because there was an element in the scheme that had been designed, obviously. As Antoinette said, integrity, transparency and consistency were factored into the principles that were agreed so that it was trying to get fairness across the range of sports. Those principles were augmented by the principle of value for money. We were aware of the difficulties at the outset, given that there are 78 sports governing bodies and a lot of clubs all over the country of a variety of sizes. It was difficult to get it done in time. In normal circumstances, it could take a year to 18 months to design and implement a scheme. Having done it in three or four months, we feel that the best business case was done and that it delivered for the sector, which, as Tracy and Antoinette said, was much needed.

The Chairperson (Mr Humphrey): OK, that will do me for the moment.

Mr Beggs: I am trying to understand the role of the Department in the design of the scheme. We have been told that the Sports Council put this detailed scheme together. What was the permanent secretary's role in the oversight of the scheme? Did she have any role in it?

Ms Meharg: In my role, I am accountable for all spend in the Department, but I do not personally approve everything that happens. There is a process of delegation. The Department was responsible for signing off on the business case. That will have been signed off by one of my deputy secretaries and passed to the Minister to ensure that she was content. I will have seen the business case at that stage.

Sport NI was responsible for the design of the scheme, but, as we explained, there was an oversight group in the Department that met Sport NI weekly to ensure that the scheme was developed and delivered as per the objectives laid out in the business case.

Mr Beggs: If there was an oversight group managing the system, how did the mission creep occur? The business case notes talk about addressing financial hardship and not simply awarding funding to sports organisations because they have suffered loss of income. If that was in the Department's business case, how did it get lost?

Ms Meharg: I would be the first to acknowledge that, in the scheme design, it would have been preferable to have a statement of additionality and a statement of need. That said, the criteria that we used were fully aligned with what was in the business case, which was about supporting the sector and making sure that it was ready to move after COVID-19.

Mr Beggs: Surely if it rewarded loss of profit rather than simply financial hardship, as indicated in the business case, it went way beyond the business case.

Ms Meharg: The vast majority of the money went to a wide range of organisations, some of which were in more financial hardship than others. There is no doubt about that. However, the fact is that all the money went against the objectives of the scheme. When I look at the business case, I see that the objectives talk about the programme aims being:

It talks about focusing on sustaining governing bodies of clubs, building club resilience, maintaining facilities and protecting jobs. It did all those things. Addressing hardship was one part of it.

Mr Beggs: You seem to be defending giving a very affluent club £1·6 million when it did not really need it. I asked you a clear question: do you think that that represents value for money?

Ms Meharg: Let me come back to that. I do, and I will explain to you why I do. Northern Ireland has two of the top 10 golf courses in the world; our golf sector is the envy of many around us. I have spoken to Tourism NI about it, and Royal County Down drives golf tourism in Northern Ireland. Golf tourism in Northern Ireland generates in the region of £56 million a year. The money that went to Royal County Down was on the basis of the net losses that it incurred as a result of COVID-19. As I said, most of that was down to money that it lost from green fees. Moreover, the club must create surpluses to reinvest in its infrastructure; if it does not, it will not be able to retain its position. It would have been a bad outcome for us if Royal County Down were unable to invest in its facilities and retain its status as one of the world's top golf courses.

It was a large sum of money. When I saw that award coming through, I asked whether there had been a robust process to assess it to make sure that it was correct. I took a lot of comfort from the fact that, as well as Sport NI, Ernst and Young had looked at it, and the net losses were absolutely evidenced. As I said, at that stage I would have preferred if there had been a process of stating why they needed the money through the application form. There was not. That was a weakness in the process, and, if we were doing it again, we would certainly look at the statement of additionality. Additionality is about what would have happened if the intervention had not happened, and there is a strong case for it here insofar as we can continue to invest in Royal County Down's infrastructure and are not in danger of losing its number-one place.

Even with the money that it has for 2021, RCD has told us that it will make a substantial loss. It also increased members' fees during the year to try to address some of that loss. It was not a question of our giving money to a golf club for people to have a good time; it went to a golf club that is a sporting asset to be reinvested in that asset. The whole of Northern Ireland will benefit from that. There is a massive benefit to the economy, but there is also a massive benefit to employment. The club employs people, and people come to Northern Ireland and stay in hotels and spend lots of money here. I understand that that headline was a real issue and that it attracted a lot of media attention, but sometimes you have to dig in beneath to see what the purpose was and whether it can be justified.

Mr Beggs: The scheme was to address financial hardship. In other regions in England, the maximum grant for a golf club is £10,000, in the Republic it is €25,000, in Wales it is £5,000 and, in Scotland, it is nothing. My question to the chief executive and the permanent secretary is why there was no thought of having a cap in Northern Ireland. Did you discuss with other regions how they were trying to support sport?

Ms Meharg: I will start, and then I will pass to Antoinette, who has more detailed knowledge of what has happened in other regions. A cap was discussed. If we were doing the scheme in normal times, we would model it so that we better understood what the impact of a cap would be. We were concerned that, if we had introduced an arbitrary cap without modelling, the objective of the scheme would not have been met. For example, if the cap had been £500,000, the governing bodies might not have got what they needed. Those governing bodies are essential for supporting the grant.

Mr Beggs: Sport NI? Antoinette?

Ms McKeown: We recognise that there was an overall cap of £25 million on the scheme. At the early stages, we considered a cap, but, as Tracy said and given what we have said this afternoon, the diversity of the sector is so wide — 78 recognised governing bodies of sport — that a cap that we put on netball, for example, might have been insufficient for football or rugby. We took a very arbitrary approach to putting on a cap. I agree that, had we had more time, we would have looked at modelling. As Tracy said, we also recognise that we could have put in that additional challenge function and a requirement for stronger evidence of need for those larger sums of money. That has been a key learning point for us.

Sport Northern Ireland is unique in the world in that it works across two jurisdictions. We are very different from sports sectors in the UK home nations and Ireland, and we have always recognised that. Sport is a devolved matter, and we recognise that it plays a strong role in community cohesion. There is also contention in sport, however, in that it has the capacity to divide communities in Northern Ireland, and we have seen that in the past. Therefore, we did not want to get into a zero-sum game: if one sport gets x, it is unfair that another gets y. That is why we did not go for an arbitrary cap but for net losses to define financial need. I agree with Tracy that there was clear financial need from the smallest to the largest individual grant award.

Sport in Northern Ireland is much less professionalised than in other parts of the UK, and sports in the other UK nations have more paid, full-time dedicated staff in contrast to Northern Ireland's reliance on volunteers. We lost a lot of our volunteers as a result of the pandemic, not just volunteers but members and clubs. Sports struggle to retain volunteers and members, committee members and coaches etc.

There are historic and structural differences between Northern Ireland and the other UK nations as well, not least a lack of investment during the Troubles, when most of our money rightly went into defence. At that time, there was investment in sports infrastructure in other parts of the UK. However, this is not simply about public investment; it is also about private investment. As a result of the peace process, for example, we have seen facility development by the private sector, such as the SSE Arena and the Belfast Giants, and we are proud of them.

There are a lot of structural differences between Northern Ireland and the UK home nations and, indeed, Ireland. Scottish clubs operated continually from May, so other jurisdictions had different restrictions from ours, and alternative funding was available. For tourism in Scotland, a lot of funding was put into golf. We did not have that facility in Northern Ireland.

We recognise the economic value of golf, but it is also one of our best-loved sports. Participation levels in Northern Ireland are probably similar to that of football. We want to continue to grow golf, not just the participation levels but particularly among young people. We also want to see a continuation of the massive talent that allows us to punch above our weight in golf. In sporting terms, not just economic, it is critical that we continue to invest in golf.

Those are some of the differences between the jurisdictions. The NIAO report recognises that we designed a scheme to meet the evidenced need in Northern Ireland as, indeed, other jurisdictions did.

Mr Beggs: This was a hardship support grant, not an economic development one.

Ms McKeown: I agree.

Mr Beggs: Did you contact the Department before agreeing to pay the £1·6 million? If so, did the Department not think to pause it and reassess what was happening? I understand that, when the Department discovered that grants were paid to wind turbines, it paused them and changed the scheme. Those are two questions, one for the chief executive and the other for the permanent secretary.

Ms McKeown: Well, as to the first —.

Ms Meharg: Sorry. I will talk about the responsibilities of the Department. The Department for Communities has a wide range of responsibilities, but it is important to remember that this was an Executive fund. The money was voted by the Executive. Often —.

Mr Beggs: Sorry. Can you answer my question? Were you aware of the £1·6 million fund allocation before it was agreed to be paid? Did you think to pause the scheme and put in some form of cap to give better value for money?

Ms Meharg: No. I was assured that the scheme had been run according to the criteria and that there had been due diligence on the money. Therefore, the Department had no basis on which to question Sport NI. One of the reasons in the business plan for Sport NI to run the scheme as an arm's-length body was so that it could make that type of decision. It would have been a fairly arbitrary thing for the Department to say, "We do not like the investment in that".

To answer your other question, I did not speak to my colleagues in the Department for the Economy at the time. However, since then, I have spoken to Tourism NI, and it has been very clear about the impact of Royal County Down losing its number-one status. Sorry, Antoinette.

Ms McKeown: Thank you, Tracy. To support what Tracy has said, we brought any funding award over £500,000 directly to our board. As I said in response to Mr Muir's questions, there was a challenge from the board. However, as Tracy also said, our board could not decide because it did not want to give money to one club that had clearly evidenced net losses. We recognised that the additionality point threshold had been passed. Had we not invested the funding, our legal advice was that we were leaving ourselves open to litigation, and that would have put the entire scheme at risk. If we had not provided the money to Royal County Down, the planned replacement of the irrigation system would not have gone ahead, and, if that scheme had not gone ahead, its world number-one status would have been put at risk.

Mr Beggs: For clarity, you and your board did not think to tell the Department that the current scheme was giving £1·6 million to an individual club, and you decided to do nothing. Is that correct? You paid it out and made sure that you spent as much of the £25 million as possible.

Ms McKeown: We spent money in line with the scheme. The Northern Ireland Audit Office report recognises that the money was spent in line with the objectives of the scheme and that due diligence was applied. We advised the Department after the board had made the approval. Certain approvals over £1 million need to go to the Department for final approval, and the role of the board was to make decisions on amounts over £500,000. The board took those decisions. We considered all the reasons that I have given, including litigation. We did not decide on an arbitrary, subjective process and change the rules of the scheme design midway and say, "We do not like the look of this; we are not paying it". We applied the principles of the scheme, and it moved on for final approval of amounts of £1 million and over to the Department.

Mr Beggs: My final question is on the potential for duplicate funding. We have heard that not only were losses paid for but loss of profits was paid for. Did that involve paying additional duplicate funding, as some applicants will have qualified for the business support grant of up to £25,000? As well as having their income sustained, applicants might have been entitled to a further £25,000. Were clauses built into your scheme to claw back any duplicate funding?

Ms McKeown: Yes. We had a due-diligence clause in the scheme to ensure that there was no duplicate funding; indeed, we are now at 97% of our due-diligence checks. That clause was clear about the application process; in fact, in the samples checked by the Northern Ireland Audit Office, there was a positive declaration by clubs that had been in receipt of other sources of funding.

Mr Beggs: How much money has been returned where there has been duplicate funding?

Ms McKeown: Sorry?

Mr Beggs: How much money has been returned where there has been duplicate funding?

Ms McKeown: Thank you, apologies. I had not heard you, Mr Beggs. I will pass to my colleague, Ian Weir, who has the figures for returned money. Ian is leading the due-diligence checks.

Mr Weir: To date, our data-matching exercise has identified up to £36,000 of potential duplicate funding. We are working with clubs and governing bodies to identify the quantum of that duplication.

Currently, it is approximately £21,600, which is 0·21% of the overall awards made. The due diligence has involved extensive data-matching against other data sources, for example, Companies House, the Charity Commission's accounts and awards in the government funding database. It has identified £26,000 worth of errors to date. Only a small percentage of the awards, 0·12%, have had errors identified with them to date.

Mr Beggs: For clarity, a club could have received £25,000 from the business support grant scheme, and you could have paid the loss of earnings from your scheme, so one club could have received £25,000 of duplicate funding. So far, you have claimed back £21,000. Is that right?

Mr Weir: There is a separate analysis line on all the applications for clubs to identify other COVID funding. That analysis line has been checked against the other data sources. You mentioned £25,000: there have been no incidences of that being identified as duplicate funding. That is borne out in the Northern Ireland Audit Office's report as well.

Mr Beggs: OK, thank you.

Mr O'Toole: I want to return to what has been termed "additionality". My question is to the permanent secretary first and to Antoinette afterwards, if she wishes. By "additionality", do you mean additional economic benefit that is derived from Royal County Down's pre-eminent status as a tourist destination? Is that a correct understanding of "additionality" in that sense?

Ms Meharg: Additionality means what our funding has leveraged, which would not have happened in the absence of that funding; in other words, our funding has leveraged additional benefits. When I look at the situation with Royal County Down, in the absence of our funding, it would have had to pause some of its investment programmes. For example, Antoinette mentioned the irrigation system that was planned. The investment has not been used, but it had been planned over a three-year period. That had to be paused during COVID, so it would have had to use all of its reserves to cover its operating costs, and, therefore, some investments in the club could not have been made. Additionality is what the funding has leveraged that would not have happened in the absence of that funding.

Mr O'Toole: How much was required for the irrigation system, and how much of the Royal County Down grant was specifically connected to the irrigation scheme and any other additional schemes that have been leveraged?

Ms Meharg: In my figures, Royal County Down got £1·5 million, I think. The irrigation system is in the region of £1·7 million. A further £2 million is required for green sheds. That was the investment in women's facilities that Royal County Down had planned over a three-year period. It had to pause some of that investment. It had commenced it before COVID and paused it during COVID. It is recommencing some of that investment at the moment. It had some reserves, but a large sum of those reserves was prepaid green fees, and, therefore, it was not able to invest that. That was a liability, not a reserve. At the end of this year, Royal County Down will still be in a negative position, even with the funding that it got from the sports sustainability fund.

Mr O'Toole: Did the sports sustainability fund cover the total cost of the irrigation project?

Ms Meharg: I am not sure how much it will spend on the irrigation system this year, so I cannot give you the exact answer to that question, Mr O'Toole.

Mr O'Toole: What would have happened if the irrigation scheme had not proceeded? Why was that so necessary?

Ms Meharg: Apparently, the irrigation system they have in place is quite long in the tooth, and it was beginning to impact on the quality of the greens. Therefore, the investment needed to be made for it to retain the quality of the golf course; indeed, that quality would also allow it to retain its number-one golf position. That is the information that I received.

Mr O'Toole: The number-one golf position is, I presume, the magazine ranking.

Ms Meharg: Yes, the 'Reader's Digest'.

Mr O'Toole: 'Golf Digest'.

Ms Meharg: Not 'Reader's Digest', sorry, wrong 'Digest'.

Mr O'Toole: Are we to understand that part of an additional criterion on which public money was committed was a decision made by a golf magazine?

Ms Meharg: No, that is not fair. I spoke to the chief executive of Tourism NI on this, and he was clear that, whilst it might be a golf magazine saying that it is at the number-one position, that is a major driver for golf tourism here. People come here to play golf because they want to play on that golf course. There is no doubt that the growth in golf tourism has been driven by the quality of that course.

If we look at Portrush, the Open generated £100 million. It is not just about the number-one ranking; this is about the opportunity for Northern Ireland to retain and grow its revenue from golf tourism and not just golf tourism. As Antoinette pointed out, golf has a large number of people participating. We are keen also to see more diversity in terms of more women playing and things like that.

I do not know whether you want Antoinette to come in.

Mr O'Toole: If Antoinette has something to add, I am happy for her to come in.

Ms McKeown: We looked at additionality similar to what Tracy set out. We also looked at HM Treasury's better business cases guidance on additionality, which states:

Tracy demonstrated with Royal County Down what would not have happened.

Mr O'Toole: OK.

Ms McKeown: To be absolutely clear, we did not give Royal County Down funding specifically for an irrigation system; we gave it to take account of the net losses as evidenced over the three years of accounts that it provided to us.

It is worth noting that the key losses to Royal County Down, which we saw when we looked at the figures, were green fee-type income, which was down by 92%, and hospitality income, which was down by 90%. There was clear evidence of income lost as a direct result of COVID-19.

Mr O'Toole: Yes, but obviously the scheme did not just compensate it for lost income; there was additional funding.

To go back to the point about the status of Royal County Down, effectively the argument is that money was spent to help it to maintain its pre-eminence. It is world famous and is a great asset. Northern Ireland is not the only part of these islands with attractive golf courses. Presumably, with regard to St Andrews, Carnoustie and Ballybunion, similar arguments would have been made in those jurisdictions, but I am not aware of similar schemes to subsidise golf courses of that eminence in those places.

Ms Meharg: In Scotland, for example, as Antoinette pointed out, a lot of the golf courses were open for most of the time. I would not have details about the supports in those other areas. I know it is from 'Golf Digest', but we have two of the top 10 golf courses in the world in this small place.

Ms McKeown: There were different approaches from different parts of government in different jurisdictions. As I said, we designed a scheme to meet the specific, evidenced needs of sport on the ground in Northern Ireland. As Tracy has said and as I am happy to echo, we designed the scheme for 78 governing bodies of sport. We did not have time to do any modelling. We paid out sums from £42 to £1·56 million. We did not anticipate at the time of the scheme design that one sports club would take the level of award that Royal County Down got.

We recognise that, for those larger sums of money, we could have built a challenge function into the design such that, over a certain amount, we would have sought more evidence of need. Tracy referred to a positive declaration. With the benefit of hindsight, we acknowledge that. However, as accounting officer for Sport NI — accountable to the board and to Tracy, as my principal accounting officer — I am satisfied that we met the objectives of the scheme for Royal County Down, that there was clear evidence of net losses and that we were investing in golf. We were not investing only in the economy; we were investing in golf.

It would be reckless of us not to recognise the massive financial contribution that golf makes to Northern Ireland. It is unique. Tourism NI has demonstrated to us that for every £244 — the average — spent by tourists in Northern Ireland, golf spends over £1,900. We could not put that aside. As a sports development organisation that values golf and recognises its importance in Northern Ireland, we invested in sport.

Mr O'Toole: We have great golf courses, but, in the nicest possible way, I take issue with the statement that that is unique. I should declare an interest: I went to university in St Andrews, and I promise you that we are not the only part of the world that gets golf tourists. It would be helpful for the Committee to have a comparison between, for example, Scotland and Northern Ireland to see whether the Old Course, Carnoustie and Turnberry, for example, were subsidised to a similar extent.

My final question goes back to the point you made about the golf participation argument. As someone who used to play golf, I agree with that. It would be great if more people played golf. It does not necessarily deserve all its reputation as being only for a certain class of person. Since you made the argument about participation, however, do you know how much it costs to play a round of golf at Royal County Down — how much a green fee would be if I were to go down there now?

Ms McKeown: No, I am not aware of that.

Mr O'Toole: It is £270.

Ms Meharg: I do not —.

Mr O'Toole: Sorry. It is £270. Not to be churlish, but it is worth pointing out that, when we are talking about widening participation, there are not too many people who can afford £270 for a round of golf. Royal County Down's irrigation system may not be precisely the best way of widening participation. I do not have any more questions.

The Chairperson (Mr Humphrey): I take it that is why you gave up golf.

Ms McKeown: I will give a little detail about widening participation, because it is something that we have looked at. I am happy to give it, if that is OK.

The Chairperson (Mr Humphrey): Now? Yes, of course.

Ms McKeown: Thank you, Chair. We looked at widening participation in Royal County Down. An annual summer scheme for 10-to-17-year-olds there charges £25 a week. Sport NI is very focused on growing that area, because golf is predominantly a sport played by older people. The widening participation summer scheme costs £25 a week. A relevant GAA summer scheme costs between £35 and £40, and a relevant IFA summer scheme costs between £40 and £45 a week. We are also aware of Get into Golf programmes that predominantly focus on women, children and the summer game. Royal County Down has sponsored and promoted women's events, and, again, Sport NI has a clear focus on widening participation for women across all sports. We have seen predominant growth from women in golf in particular in the past number of years; in fact, female participation in golf in Northern Ireland has gone up 21% since 2016.

I recognise, Matthew, that green fees of £270 are far outside a lot of pockets, but there is extensive widening participation work not just at Royal County Down but at a range of golf clubs. One of the legacy programmes on which DFC and Sport NI worked in partnership was the widening participation legacy arising from

this year.

Mr O'Toole: I very much enjoy golf. It is great, and participation should be widened to younger people and particularly to people who are from less advantaged backgrounds and cities. Northern Ireland has great golf courses. However, I am not convinced that enough conditionality for widening access has been attached to the scheme. More thought needs to go into connecting the elite level of golf and golf tourism to widening access here. I am not convinced that that connection has been proven.

Ms Flynn: Thanks to Tracy and Antoinette for all your feedback and answers thus far.

I want to go back to one of the Chair's questions on the breakdown of clubs that received funding from the scheme. Ian, you mentioned 180 GAA clubs and 77 football clubs, and there are cricket, boxing and swimming clubs and all the rest. That breakdown gives a good sense of how many clubs benefited across the sports sector. I am sure that many, if not all, of them were experiencing some form of financial hardship on varying levels, like many other sections of society at the time, due to the pandemic. When the scheme was launched, what process did the Department carry out, working alongside the governing bodies, to ensure that the scheme was communicated to the grassroots and smaller local clubs?

Ms Meharg: I will start and then pass on to Antoinette.

The Minister and the Department engaged regularly with representatives from the sports sector, including the NI Sports Forum and the governing bodies, right throughout the period. Sport NI hosted pre-launch engagement sessions with the sectors. I will pass on to Antoinette to give you more detail of the range of events that they held. I should say that the role of the governing bodies was a key part of the scheme. It was felt that they were best placed to reach out to grassroots organisations. Antoinette?

Ms McKeown: Thank you, Tracy. Yes, the Minister and the Department engaged regularly with representatives from the sports sector. There was recognition that, as COVID restrictions continued, more money, beyond the sports hardship fund, which was very immediate and welcomed, was needed.

The Minister formally launched the scheme with a press release. Sport NI made a really user-friendly, plain-language video to make sure that it was understood. We shared that on social media, and there was extensive engagement across social media platforms. We hosted pre-launch engagement sessions with the sector. Those were really well attended by representatives from over 80 sports. As Ian said, during December and January we facilitated five online workshops to make sure that, as the Chair referred to earlier, the lower-capacity governing bodies in particular got the support that they needed.

As Tracy said, we also directly engaged with and supported governing bodies, who then engaged directly with their clubs. Many did exceptionally well in that communication. DFC also published details of the scheme on its website and on nidirect. We created a dedicated support email address. We remained on call throughout Christmas and the new year. It would be remiss of me not to recognise Sport NI staff who worked late into the evenings, weekends and over the Christmas and new year period. They stepped up and stepped up again. We responded to the sector's request to extend the closing date from 5 January to 20 January. We recognised that that closed the gap that would allow us to make the decisions, but we were able to do that. We did not want to adversely impact on our commitment to commence payments by the end of February, but we recognised that some of those smaller governing bodies and clubs needed extra time. We encouraged and supported the governing bodies to hold their own support sessions with their grassroots clubs, and many of them did that.

Ms Flynn: Clearly a lot of ground was covered through that process of communication. As I said in my opening remarks, you get a sense of that when you see the breakdown of how many clubs benefited from that. As Antoinette said, we see the amount of work that was put in by your team and your staff over a difficult period. That has to be appreciated.

Some of the breakdowns of the amounts of money that went to clubs has been spoken about. We heard what some of the bigger golf clubs received from the scheme. Do any of you have a breakdown of the average payment made to a typical GAA or boxing club? We are talking about the bigger figures, but have you worked out what the average payment was in those sectors? When the clubs received those payments, how would they have been expected to use the grants? Was a direction specifically set out for them?

Ms Meharg: I will start off, and then you can come in, Antoinette. Is that OK?

Over 95% of the offers — 56% by value — went to non-elite sport. Of the awards, 23% were under £10,000, and 82% were under £50,000. The average spend was around £30,000. In advance of that, there was the sports hardship fund, which went to another 913 people. They needed a range of things. It depended on whether they had infrastructure, rent to pay, heating bills or insurance. For example, we have testimonials from netball clubs that the fund prevented people being made redundant or going to furlough and allowed them to continue to work with their communities. When I looked at some of the testimonials, I saw that a lot of the clubs said that that had been an absolute lifeline. Do you have anything to add, Antoinette?

Ms McKeown: Yes. Our grant awards were given directly to the governing body of the sport and were for them to distribute. We listed what each of the clubs associated with our governing body of sport was due to get. We were clear with those governing bodies that they were not allowed to put on any terms and conditions other than those set by Sport NI.

The terms and conditions set out the purpose for which the money was given and that, in the event of any duplicate funding or inaccuracies inadvertently provided to us, our post-claim due diligence and checks would pick those up.

I concur with Tracy. Just this week, Ulster Rugby confirmed to us that, whilst it continues to have challenges, the sports sustainability funding was absolutely critical and it could not have survived without it. Looking at the diversity of the sector, Swim Ulster advised us that, at the point that we were providing awards to its individual clubs and it was ringing round clubs to confirm their receipt of those awards, a club member said that they were convening a meeting that evening with a view to closing and laying off a coach. We recognise that there was a need for the funding across the piece. It has certainly sustained the sector, as the Northern Ireland Audit Office report recognises.

Ms Flynn: Thanks for that, Antoinette and Tracy. You are right: that is one of the big things that came out of the report. Tracy, you used the terminology that those funds were almost a lifeline to some of the clubs that we are talking about. I think of some of our local clubs and all the great work that they do with young people and families. It is fair to say that, throughout the pandemic, all the parties in the Executive became champions for people's mental health and are worried about the post-pandemic situation. We are still worried about it, because we are not 100% there yet. One of the big issues for all of us was the unexpected impact of the COVID pandemic on mental health. I think of the whole sporting sector and all the sporting families in our communities. This funding will make a big difference in how people emerge from what has been a really difficult year and a half. That needs to be recognised.

I have listened to the questions and answers, and the pace at which you had to roll out this scheme has come up a few times. You were time-limited, as a lot of other schemes were. You, like everyone else, were working in an unusual environment and a different one from that which you would work in normally. I scribbled down a couple of notes. Antoinette mentioned that, when concerns arose and were identified — or maybe not even concerns but just when you looked at the breakdown of the schemes and grants, you were almost faced with the scenario of, "What do we do here?", and there was the possibility of legal challenge. You said that, if you had tried to modify or change the scheme beyond a certain point and then faced legal challenge, the overall scheme might have collapsed. This is my final question to the panel. All that we are dealing with is in hindsight, but, given your comments that the scheme was a lifeline for a lot of clubs, had the scheme collapsed, could some of the clubs have closed? Had it not been for the scheme progressing in the end, might some clubs not be here today?

Ms McKeown: As I said, had our board taken an arbitrary decision, for example, not to fund Royal County Down Golf Club — the board, in fact, discussed that this was likely to attract negative media attention — simply because it did not like the look of a particular award to an club that met one of the criteria, our legal advice was that we could have faced litigation. Had we faced litigation, our cautious legal advice would have been to stall the scheme. Given that we were taking those decisions throughout February and early March, it is likely that the scheme would not have gone ahead before the end of March, and it was obviously year-end-sensitive. However, as accounting officer, I am clear that there was evidence of need for that £23 million. If we had not progressed with it, we would have put the entire sports sector at risk. Not only that, we would have put the recovery of Northern Ireland's communities at risk. We recognise that the COVID pandemic has created a second pandemic: the effect on mental health and well-being. We have seen horrendous statistics, particularly for children and young people, that show anxiety levels increasing as a direct result of COVID.

The sports sector has been incredibly active on mental health and well-being. Sport NI has a partnership with the Public Health Agency (PHA) on mental health and well-being. We were due to launch a new resource by the end of June last year. When COVID hit, we brought that forward and released it in early April, putting it online as a resource. We offered that not only to the sports sector but to every person in Northern Ireland. It has been incredibly well used and really successful in getting signposting information out across Northern Ireland.

We have brought forward additional mental health and well-being capacity as part of Supporting Sport to Build Back Better, which is our separate National Lottery COVID programme. It trains coaches, volunteers, officials, committee members and parents on mental health awareness and signposting. A lot of other capacity-building resources have been identified. As chief executive of Sport NI, of course, I would say this, but we are proud of what the sports sector has delivered during COVID-19

As Tracy said, the majority of the money has gone to grassroots organisations. We did not classify Northern Ireland Football League (NIFL) clubs, for example, as grassroots organisations, but, declaring an interest as a Glenavon fan, I would say that that club is at the heart of the local community. I have no doubt that Ballymena, Larne, Cliftonville and many other clubs would say the same. Sports clubs are our local communities.

Ms Flynn: Thank you very much.

Mr Boylan: I welcome the panel. Antoinette, it is good to see you again; it has been a while.

Tracy, I want to go back to the ministerial direction. Will you go over that again? As you were explaining it, my signal broke up, and I could not fully hear it.

Ms Meharg: I apologise: I did not realise that my camera was turned off for a while.

A ministerial direction is normally when an accounting officer gives advice to a Minister and a Minister continues with a course of action that is contrary to that advice. The reason could be that the accounting officer says that it is not value for money or that the spend is novel and contentious. In this case, I believe that we were able to deliver a proportionate level of due diligence to develop and deliver a scheme within normal 'Managing Public Money' rules, and therefore I did not feel that I needed to seek a direction from my Minister on the scheme.

Mr Boylan: Thank you. Ian, you mentioned 180 GAA clubs, but I think that there are over 412. There could be 600 GAA clubs in the whole of Ulster, but I think that there are over 400 in the North. Antoinette, you said that you dealt with the governing bodies when you were trying to get the money down to the grassroots. Was it only those 180 clubs, or did others receive moneys too? There must be at least 400 GAA clubs in the North.

Ms McKeown: Thank you, Cathal. Just to clarify, 430 clubs benefited from the sports hardship fund. The Chair asked us for a breakdown of the clubs. When we say Gaelic games, that includes women's football and camogie. There were 180 clubs across those three governing bodies, 77 IFA clubs, 26 rugby clubs, 25 golf clubs and a remaining 122 sports clubs from across all our other governing bodies. A total of 22 sport governing bodies and 430 clubs benefited from the sports sustainability fund, in addition to 915 clubs benefiting from the sports hardship fund.

Mr Boylan: I know that Sport NI worked with the sports sector to design the scheme. Antoinette, how do you view the overall success of the scheme in tackling and mitigating losses and preparing clubs to get up and going again, bearing in mind what other members said about the golf club and everything else?

Ms McKeown: Rather than saying how Sport NI or I view it, I will say that the Northern Ireland Audit Office report has recognised that the scheme was successful in getting money out to the sports sector in a short period and that the funding aligned with due diligence. Undoubtedly, we have a more sustainable and resilient sports sector as a result of that funding investment. I want to put on the record, on behalf of the sports sector, Sport NI's relief and thanks to the Northern Ireland Executive for providing the funding for everyone to benefit, not just sport. We are not out of the woods yet. Significant restrictions continue. Tracy referred to ongoing losses that are forecast in the sports sector this year. However, we certainly see a much more resilient sector than would have been the case.

Mr Boylan: I appreciate that. Sport NI's work goes across all those clubs. For those of us who are part of the GAA and follow the GAA, it is about not just the sport but the contribution to the community; that is the key element. The GAA has been a leader throughout the pandemic. Whilst it has applied for a bit of funding, it has carried out a lot of work outside its normal duties in sports and rolled out mental health programmes and all those things. The funding is appreciated in that context, because that work is key. I am glad that the Audit Office report recognises some of those things.

My final question is on key lessons learned. All the schemes were rolled out in a hurry. Everybody was reacting to the pandemic and trying to support business, sports, music and society in general. What lessons can you learn from it for the roll-out of future schemes?

Ms Meharg: Cathal, we need to look at what worked well but also what we could do differently. What worked well, not just in the sports fund but across a range of funding, was the co-design and partnership and working closely with sectors and at speed to understand their needs. In this case, we worked with governing bodies, which played a key role. Without that, the scheme could not have been delivered within the time frame. The partnership between the Department and, in this case, Sport NI — in other cases, the voluntary and community sector and councils — in getting schemes out was key to our response. I am proud of DFC staff, as I said, but we just could not have done that without our partners.

On lessons learnt, if we had more time, modelling the scheme would definitely have given us more insights beforehand. A statement of additionality in the application form would have given more comfort to everybody when looking at the net losses. We could not have done that for all 430 awards within the time frame, but, perhaps, for the larger awards, there could have been some sort of statement about what the need was and what it would leverage. Those are some of the lessons that I take from it.

Mr Muir: I reviewed the Audit Office report and did some research on this. Golf clubs come in different sizes and organisation types, but a significant minority are commercial entities that make surpluses and are able to operate like businesses. In England, whilst there was financial support during COVID-19, it was rather limited. The Government wanted those businesses and organisations to seek support, as other businesses did, through loans and borrowings. Why was that not considered as a way to support organisations such as Royal County Down Golf Club?

Ms Meharg: In the original business case, there was a long list of seven options, one of which was to look at loans. For us, there are issues with that. First, we have little experience of giving out loans. A loans process is much more complex to put in place, and we did not believe that we could deliver a scheme based on loans in the available time frame. For the vast majority of clubs that received funding, the question was whether they could have borne a loan. For example, I know that some golf clubs are now taking out loans on top of the funding that they got. They are having to take loans because of the operating environment, but they are managing to get loans from banks. We could not have delivered a loans scheme within the time frame.

Mr Muir: I acknowledge that you could not have delivered such a scheme. However, I know of numerous businesses in my constituency and in Northern Ireland that have been reopening and coming out of the restrictions with loans from commercial banks. That is what they have had to do. That is how they are going forward and managing to get through the COVID-19 pandemic. You talked about things that Royal County Down Golf Club needed to invest in for its future, but why was it not considered that that club should have explored that avenue, rather than the state essentially grant-funding its business development?

Ms Meharg: It would have been helpful to have had an additionality statement in the application form to ask that club, for example, what it would do with the money and what other sources of finance it was looking at.

At least one of the golf clubs that have been mentioned in the media is having to take out commercial loans from banks to address its losses. You are right: where it is possible, loan funding can support the clubs.

Mr Muir: Thank you. I promised to be brief, Chair.

The Chairperson (Mr Humphrey): Mr O'Toole has also promised to be brief.

Mr O'Toole: I will be brief, uncharacteristically so.

Tracy, I want to follow up on that last point about funding. Was and should consideration have been given to using financial transaction capital (FTC)? Every year, we have a challenge here in getting FTC out the door. Would it have been possible to use some FTC to enable Royal County Down Golf Club, for example, to invest in its irrigation scheme?

Ms Meharg: When we considered loans as an option, FTC was one of the things that were considered. However, it was deemed that it could not be delivered within the time frame. In the Department, we are exploring every avenue to use FTC, but, on this occasion, we did not deem that to be possible.

The Chairperson (Mr Humphrey): Thank you very much. All the members who indicated that they wish to speak have had the opportunity to do so. I thank the witnesses for their attendance. Before we bring the session to an end, do Mr Donnelly, Ms O'Hagan or Mr Stevenson wish to ask any questions or make any comments?

Mr Kieran Donnelly (Northern Ireland Audit Office): No.

Mr Stuart Stevenson (Department of Finance): There are no issues from a DFP perspective, Chair.

The Chairperson (Mr Humphrey): Before I let you all go, I will make a couple of points. Having listened to the evidence given today, I have concerns about modelling, capacity and distribution. It would be helpful for the Committee if, over the summer recess, you could, please, provide figures on the distribution of the £23 million to the 430 clubs and 22 governing bodies. Would it also be possible to get the breakdown for the sports hardship fund?

Ms Meharg: Yes.

The Chairperson (Mr Humphrey): OK. Thank you very much to all of you for your contributions this afternoon. I hope that you have an enjoyable summer.