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London arts and sports groups to lose £440m to 2012 Games

Published Tuesday 26 February 2008 at 17:05 by Alistair Smith

Arts organisations and sports groups in London are to suffer from a £440 million loss in funding due to the diversion of Lottery money to the 2012 Olympics, a new report by the London Assembly reveals.

The document, put together by the assembly’s culture and sport committee, also claims that there is not enough money available for smaller arts organisations to put on work as part of the Cultural Olympiad and calls on London Mayor Ken Livingstone to create a Cultural Olympiad ‘funding pot’ by August this year, which would focus its investment on smaller arts projects.

Dee Doocey, the Liberal Democrat MP who chairs the committee, said: “We are not denying that the capital will reap huge benefits as host city of the 2012 Games. However, our investigation shows that the on the ground opportunities Londoners were promised are at risk because the funding diversion effectively ham-strings the organisations needed to deliver them.

“At present, it’s not completely clear who will lose what, but our research suggests that smaller organisations will suffer most. With the Games only four years away this needs to be addressed immediately before the opportunity to get this right is lost.”

The report claims that the diversion of Lottery cash to fund the Games “threatens to leave London with a cultural landscape that is less rich than it might have been” and warns that the money which has been promised for reinvestment into the Lottery from the sale of Olympic land may not be as great as claimed by the government.

“The major concern is that the Memorandum of Understanding is overly optimistic about the value of the Olympic land and that proceeds from the sale of that land will not be enough to reimburse the Lottery as planned,” the report warns.

According to the committee, while the memorandum outlines predicted revenue of £1.8 billion from the sale of the land, the real figure - using data from the London Development Agency - could be as low as £838 million.

As the LDA will be reimbursed, the first £650 million, with the next £631 million subject to a 75%-25% split between the LDA and the Lottery, the Lottery could end up being repaid only £139.5 million - far less than the £500 million it has been promised. Even if the full amount is recovered, according to the report, it will not be until 2021/22 that any money is given back to the Lottery and much later until the full £500 million is repaid.

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