Charity Management

Outrage over Government plans to keep unspent Olympics cash - the story

15 January 2013

After London won the bid for the 2012 Olympics, the organisers and the Government realised they needed to treble the budget to some £9.3bn, including a massive multi-billion pound contingency. As a result, in 2007 tey raided an additional £675m of lottery revenues to help fill the gap

Of this figure, £425m should have been distributed by the Big Lottery Fund and now a campaign is taking off to get this money back and distribute it where it is due.

In fact, the money taken from Big was on top of £213m which the Government had already arranged to take from the lottery to support the original budget for the Games. This took Big’s total contribution to the Olympics budget to £638m, or nearly two-thirds of the £1.085bn Olympics contribution from general lottery revenues. Despite having nothing to do with elite sport, Big became the biggest lottery contributor to the Olympics.

In response, to the criticism that could be heard at the time, in June 2007 the then Olympics Minister Tessa Jowell told the House of Commons that the Government had agreed a Memorandum of Understanding (MOU) with the Mayor of London, designed in part to reimburse the Lottery for lost revenues, using the proceeds from selling Olympics assets.

Crucially, there was never any schedule or timeframe for selling the assets set out in the 2007 MOU, but the expectation of campaigners in the voluntary sector was certainly that it would be prompt.

And then came a new Government

After coming to power, the current Government said it would honour the previous commitment to repay the £675m by selling Olympics assets, and negotiated several revisions of the original agreement. To our knowledge, the latest of these remains unpublished – big obtained it through an FOI request and you can view the PDF here.

It was at this time that Government also announced that repayment of the Lottery from Olympics assets sales would take place over a period of 25 years, and would be ‘potentially’ completed by 2030/31.

But, as Big say: "The National Lottery does not exist to fund massive public infrastructure projects like the transport network, property redevelopment and sports stadia. The Big Lottery Fund provided the bulk of the £675m mentioned here, and it exists to fund projects which help people in need across the UK, not just in London. This money was wrongly taken without the consent of the people it is intended to help. 2031 is not acceptable as a timeframe for refunding the money. It is ridiculous to expect us to accept that promises made now will be kept by Governments 20 years from now"

Back to the Mayor

Another related development, announced in early 2012, involved the Government turning over control of the assets to the Mayor’s London Legacy Development Corporation. It is not certain either how this new agreement will ‘deliver earlier returns’ as there was never any schedule in the 2007 MOU.

In response to Big's continued campaigning, the organisation says, a couple of "notable announcements" came out during the summer of 2012 concerning the return of money from the sale of the Olympic Village and the refund of unspent funds in the Olympic Lottery Distribution Fund at the end of the Games.

There are strong concerns that  this money is the result of some additional and unpublicised raid on the Lottery, which was made when the property deal with the private sector to build the Village collapsed. Government stepped in to provide most of the funding but it appears that there may have been an additional raid on the Lottery to fund a gap in the amount needed. The Big Lottery Fund announced in September 2012 that it was setting up an Olympics Legacy Trust to receive and distribute this money. What happens with is remains unclear.

The final straw

In its final quarterly report on the Olympics in October 2012, the Department for Culture, Media and Sport announced that £480m of the Olympics budget (i.e. the £9.3bn budget) had been unspent at that time. Of the £480m, Government said it expected to spend around £103m, and hand £377m ‘underspend’ to the Treasury, not the Lottery. Big states: "This is outrageous.

"Our campaign has been calling for any underspend to be used to refund the Big Lottery Fund immediately, because we do not believe the assets deal is credible or reliable. It is vital that this money is made available as quickly as possible so that it can benefit vulnerable people and communities during difficult times."

A campaign has now been set up to retrieve the money to its rightful owner, which you can support by clicking here.




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