A report issued by the UK Parliament’s Public Accounts Committee (PAC) has accused Sport England of losing track of how £1.05bn in grants have been spent since 2016 and only accounting for £450m.

It claims Sport England distributed £1.5bn in grants in the five years starting 2016-17, “but only knows which local authorities this funding went to for £450m of this spending”.

“It does not know where in the country the remaining two-thirds of grants awarded were spent, as it does not track the distribution of grants issued to national organisations,” reads the report. “Sport England, therefore, cannot fully assess whether it has met its objective to target spending at less active groups, including lower socioeconomic groups.

“It is unacceptable that Sport England does not know where in the country its grants are spent or whether these are genuinely helping those most in need,” said the report.

The PAC report also stated that the DCMS (Department for Digital, Culture, Media and Sport) failed to deliver on its pledge to increase the number of active adults across the UK and boost grassroots sports and physical activity participation as part of the £8.8bn London 2012 Olympic and Paralympic Games programme.

The PAC has claimed that the proportion of adults participating in sport at least once a week declined in the first three years after the Games. It explains that the DCMS has “made little progress in tackling inequalities and the barriers to participation” and that the “percentage of active adults increased by only 1.2 percentage points from 2016 to 2019” with almost two in five adults in England not meeting the Chief Medical Officer’s guidelines for recommended activity of 150 minutes of moderate intensity exercise per week.

Initiatives, such as Sport England’s £135m ‘People Places Play’ scheme, were introduced to encourage people to take up Olympic and Paralympic sports. But the report says Sport England acknowledges it “relied too heavily on a national event to deliver increased participation”.

Sport England, responding to HCM’s request for comment, has refuted the claims, stating that many of the issues and recommendations raised by the PAC report were debated within the hearing. It shared several challenges to the PAC’s views and stated that it is “inaccurate for the committee to suggest we do not know where our investment goes”, confirming that every pound is accounted for in terms of what organisation receives it and how it is spent.

“Activity levels were at record highs across England before the pandemic,” said a Sports England spokesperson. “Our annual Active Lives data recently confirmed that despite the huge disruption of the past two years, participation in sport and activity continues to recover, with children’s activity already back to pre-pandemic levels.

“Sport England invests public money responsibly and transparently, recording and publishing data on all grant recipients – including location data right down to postcode level. This is all clearly available online, with information on where every pound we spend goes.

“Supporting people to be active throughout their lives is essential, and our strategy Uniting the Movement is dedicated to investing effectively in partnerships and programmes to reduce inactivity and tackle stubborn inequalities. We welcome the committee’s interest in this vital issue and will consider its recommendations and respond in due course.”

While the Games delivered £14.2bn in economic value by 2014, Sport England confirmed that it stopped tracking the long-term participation legacy of the Games altogether in 2015 when a new strategy to build grassroots sport and activity was introduced. This saw 12 community pilots with local partners tackle inactivity, yet the PAC says the outcome did not impact national numbers.

“The Department’s approach to working in partnership with other organisations to encourage people to take part in sport and physical activity is not yet effective,” read the report. While Sport England drove a six-fold increase in the number of organisations it awarded grant funding to in 2020-21, when compared to 2019-20, it “could not explain how increasing its network of grant recipients would deliver increased activity levels”.

The committee has recommended that the DCMS and Sport England need to set out what they will do differently to improve adult participation in physical activity.

Yet, when speaking to HCM, Sport England has argued that participation increased by 1.5 per cent (or 1.9m people) from 2005 to 2016, and that the number of active people increased by 1.1m between 2015 and 2019, against a target of 500,000, which makes a “record high” of 28.6m taking part in at least 150 minutes of moderate intensity physical activity a week – over six in ten adults.

While activity levels among the over 75s and disabled people rose before the pandemic, the report noted COVID had exacerbated inequalities in activity for lower socio-economic groups, disabled people, Black and Asian people and women. The PAC has invited Sport England to confirm how it intends to overcome barriers for the least active groups.

Another criticism, which is particularly relevant in light of the current energy bills crisis, said that the DCMS did not know if “leisure facilities are financially sustainable or are delivering the sports facilities that communities need”.

“The energy bill for the leisure sector is expected to rise from £500m in 2019 to £1-1.2bn for 2022,” it stated. “Some 70 per cent of councils are considering scaling back their leisure services in response to these financial pressures. Sport England recognises the fragile financial position of some leisure providers, but lacks understanding of the support the sector may need.”

The leisure sector is currently renewing lobbying efforts for energy subsidies following the outcome of the Energy Bill Relief Scheme review which has failed to offer facilities any additional support.

As reported by non-profit UK Active, 74 per cent of council areas are classified as ‘unsecure’, meaning there's risk of significant closures or reduced services at leisure centres before 31 March 2023. On top of the challenges that the pandemic threw up, the threatened closures further compound the problem of increasing physical activity engagement among adults on a national level.

In response to the PAC report, Huw Edwards, CEO of UK Active said: “I believe there is a collective ambition across the government, its agencies and the sport and physical activity sector, to drive activity levels in the UK, for the benefit of our nation’s wellbeing, economy and the NHS. However, the focus must shift from major sports events and a false promise of population changes in activity deriving from them, to more credible and targeted strategies that support the drivers of physical activity in the UK: walking, fitness, swimming, running and cycling.

“We need to see a new, comprehensive plan from the government that fully leverages physical activity for the national good, beginning by supporting our sector with regulatory and tax reform to grow their impact, alongside incentivisation for the public.”

“UK Active has a clear strategy to see more than five million new members join our nation’s gyms, pools and leisure facilities by 2030. We have a strong partnership with Sport England that is helping to evolve the offers and services our members provide and ensure they're inclusive for all communities.

“With the right leadership and financial investment from the government, we can both stimulate sector growth and galvanise demand for these services in order to reduce our nation’s health inequalities.”

The PCA has given the government up to two months to file an official response.