What will the new Olympic land debt deal mean for London?

4 JANUARY 2012

The Greater London Authority (GLA) will get the first proceeds of Olympic land sales as part of a new deal to compensate it for taking on £231 million of debt[1] from the original purchase of the land.  But, with an uncertain property market and unknown interest costs, is this a good deal for Londoners?

The Assembly’s Budget and Performance Committee will tomorrow question the Mayor’s Chief of Staff about the new agreement with the Government.[2] 

As they examine the Mayor’s budget for the next financial year, Assembly Members will also look at how limited grant funding for economic development[3] could affect the Mayor’s plans and how the Metropolitan Police Service hopes to close an £86 million gap in its budget[4].

Later in the meeting, representatives of the capital’s fire and transport organisations will be asked about the effect of the Mayor’s proposed budget on their plans and services.

The following guests will attend the meeting:

  • Sir Edward Lister, Deputy Mayor and Chief of Staff
  • Nick Griffin, Mayor’s Budget and Performance Adviser
  • Sir Peter Rogers, Mayoral Adviser, Regeneration, Growth and Enterprise
  • Cressida Dick, Acting Deputy Police Commissioner
  • Catherine Crawford, Chief Executive, MPA
  • Brian Coleman AM, Chairman and Leader of LFEPA
  • Ron Dobson, London Fire Commissioner
  • Peter Hendy, Transport Commissioner

The Budget and Performance Committee meeting will take place on Thursday January 5 from 10am in Committee Room 5 at City Hall (The Queen’s Walk, London SE1). Media and members of the public are invited to attend.  The meeting can also be viewed via webcast. 

Notes for Editors:

  1. The debt the London Development Agency (LDA) took on to pay for the acquisition and remediation of the Olympic Park will transfer to the GLA on 1 April 2012. The GLA is expecting to inherit £349 million of Olympic land debt and sufficient Government funding is being provided to reduce the debt to £231 million by 31 March 2014.  Under the old arrangement, the LDA was expecting grant funding to repay the entire sum.
  2. According to the Mayor’s draft budget for 2012/13, negotiations are now complete with the Government around the Olympic land debt. The GLA will get full receipts from the sale of Sugar House Lane (which has already been sold but the value of which is commercially confidential), plus the first £223m in land receipts. After that there will be a 25:75 split between the GLA and Lottery until the Lottery has been repaid in full. Finally there is a 50:50 split between the GLA and central government on any remaining land receipts. The Government will also provide the GLA with an extra £12m in 2011-12 to put towards Olympic land debt costs over the next three years.
  3. In a letter to the Secretary of State responding to the Local Government Resource Review consultation on 24 October 2011, the Mayor made it clear he hoped the Government would provide additional funding to support its new economic development role. His draft budget shows no further funding has been provided beyond the LDA final settlement grant.
  4. The Mayor’s draft budget for 2012/13 shows a funding gap of £86 million for the Metropolitan Police Service for 2012/13.
  5. See full agenda papers for the meeting
  6. The Chair of the Budget and Performance Committee, John Biggs AM, is available for interview.  See contact details below.
  7. As well as investigating issues that matter to Londoners, the London Assembly acts as a check and a balance on the Mayor.

For media enquiries, please contact Julie Wheldon/Lisa Moore on 020 7983 4228/4283.  For out of hours media enquiries, call 020 7983 4000 and ask for the London Assembly duty press officer.  Non-media enquiries should be directed to the Public Liaison Unit on 020 7983 4100.