By David Williams
11 March 2010
Olympic chiefs are unable to guarantee that the Games’ legacy will generate enough revenue to recoup hundreds of millions of pounds’ worth of additional investment from the National Lottery.
Jonathan Stephens, permanent secretary of the Department for Culture, Media and Sport, and John Armitt, chair of the Olympic Delivery Authority, gave evidence to the Commons Public Accounts Committee on March 8.
Neither could give assurances that the £675m from the Lottery’s fund for good causes would be paid back. The sum was allocated in March 2007 – at the height of the London property boom – to be repaid on a profit-sharing basis from sales of the Olympic site assets after the Games.
PAC member Austin Mitchell emphasised that the possibility of the funding being paid back was ‘hypothetical’, because much of it depended on private property prices.
Stephens said: ‘This is a long-term investment programme… over that sort of timescale these investments are realisable.’ But, he added: ‘There can’t be guarantees.’
Earlier, Armitt had similarly declined to give firm assurances that all the money would be recovered. He emphasised that it would be the responsibility of the Olympic Park Legacy Company to generate cash from the facilities once the Games had finished. He was also forced to admit that the ODA could not say how many jobs the project had created for previously unemployed people from the five Olympic boroughs.
A London Assembly hearing on March 4 also raised doubts over the Olympic legacy, when it emerged that a deal to transfer land from the London Development Agency to the OPLC had been delayed.
The Assembly’s budget and performance committee heard that the deal, originally planned for October 2009 and described six weeks ago as ‘imminent’, had still not been signed.
It could still leave the LDA, which bought and prepared the Olympic site land, £300m out of pocket due to falling land values.
The delays have forced the agency to take on extra borrowing, expected to cost £13.4m next year in interest payments.
11 March 2010
Olympic chiefs are unable to guarantee that the Games’ legacy will generate enough revenue to recoup hundreds of millions of pounds’ worth of additional investment from the National Lottery.
Jonathan Stephens, permanent secretary of the Department for Culture, Media and Sport, and John Armitt, chair of the Olympic Delivery Authority, gave evidence to the Commons Public Accounts Committee on March 8.
Neither could give assurances that the £675m from the Lottery’s fund for good causes would be paid back. The sum was allocated in March 2007 – at the height of the London property boom – to be repaid on a profit-sharing basis from sales of the Olympic site assets after the Games.
PAC member Austin Mitchell emphasised that the possibility of the funding being paid back was ‘hypothetical’, because much of it depended on private property prices.
Stephens said: ‘This is a long-term investment programme… over that sort of timescale these investments are realisable.’ But, he added: ‘There can’t be guarantees.’
Earlier, Armitt had similarly declined to give firm assurances that all the money would be recovered. He emphasised that it would be the responsibility of the Olympic Park Legacy Company to generate cash from the facilities once the Games had finished. He was also forced to admit that the ODA could not say how many jobs the project had created for previously unemployed people from the five Olympic boroughs.
A London Assembly hearing on March 4 also raised doubts over the Olympic legacy, when it emerged that a deal to transfer land from the London Development Agency to the OPLC had been delayed.
The Assembly’s budget and performance committee heard that the deal, originally planned for October 2009 and described six weeks ago as ‘imminent’, had still not been signed.
It could still leave the LDA, which bought and prepared the Olympic site land, £300m out of pocket due to falling land values.
The delays have forced the agency to take on extra borrowing, expected to cost £13.4m next year in interest payments.
