DD2830 London Stadium intra-group equity contribution and settlement

1.1.    Mayoral Decision (MD) 3324 established the governance arrangements for London Stadium LLP and its subsidiaries, including the matters requiring GLA approval. It delegated authority to the Chief Finance Officer to approve Type 2 Reserved Matters. MD3468 subsequently approved amendments to those Reserved Matters; this request is being considered under MD3468.

1.2.    London Stadium LLP is seeking the GLA’s consent, as a Type 2 Reserved Matter, to make an equity contribution of up to £4.5 million to its wholly owned subsidiary, London Stadium 185 Limited (LS185). The contribution will support the settlement of a historic financial arrangement between the two entities; and allow LS185 to recover £744,990 of input VAT.

1.3.    The transaction will not require additional funding from, or result in any additional cost to, the GLA or the London Stadium group. 
 

2.1.    With the equity contribution, the historic taxation arrangement between London Stadium LLP and LS185 can be settled.

2.2.    The proposal supports the effective financial management of the London Stadium group. It is consistent with the GLA’s oversight of London Stadium LLP, through its business-planning, budget and Reserved Matters arrangements.
 

3.1.    The decision relates to an internal financial transaction. It will not affect the operation of London Stadium, or the services it provides.

4.1.    The proposed contribution is consistent with the governance arrangements established for the London Stadium group.

4.2.    There are no conflicts of interest to declare from any officer involved in the drafting or clearance of this decision form. 
 

5.1.    The proposed equity contribution, of up to £4.5 million, will be made by London Stadium LLP to LS185 from resources already held within the London Stadium group. 

5.2.    The subsequent settlement between the two entities will offset at group level. The proposal will therefore have no net financial impact on the London Stadium group; and will not require additional funding from the GLA. 
 

6.1.    The foregoing sections of this report indicate that the decisions requested of the Chief Finance Officer, in accordance with her delegated authority granted under MD3324, concern the exercise of the GLA’s general powers. These fall within the GLA’s statutory powers to do such things considered to further, or that are facilitative of, or conducive or incidental to, the promotion of economic development and wealth creation in Greater London. In formulating the proposals in respect of which a decision is sought, officers have complied with the GLA’s related statutory duties to:

•    pay due regard to the principle that there should be equality of opportunity for all people
•    consider how the proposals will promote the improvement of health of persons, health inequalities between persons and to contribute towards the achievement of sustainable development in the UK
•    consult with appropriate bodies.  

6.2.    In taking the decisions requested, the Chief Finance Officer must have due regard to the Public Sector Equality Duty – namely, the need to eliminate discrimination, harassment, victimisation and any other conduct prohibited by the Equality Act 2010; and to advance equality of opportunity, and foster good relations, between persons who share a relevant protected characteristic (age; disability; gender reassignment; marriage and civil partnership; pregnancy and maternity; race; religion or belief; sex; sexual orientation) and persons who do not share it (section 149 of the Equality Act 2010). To this end, the Chief Finance Officer should have particular regard to section 3 (above) of this report. 

6.3.    As GLA officers characterise the proposed equity contribution as an investment by the LLP, the proposal is a Type 2 Reserved Matter for the purpose of the LLP Members’ Agreement. Under MD3324, the Chief Finance Officer has delegated authority to provide the GLA’s consent to such a proposal.
 

7.1.    Following approval, London Stadium LLP will make the equity contribution to LS185, enabling the historic financial arrangement to be settled immediately and LS185 to reclaim £744,990 of input VAT from HMRC.