Evening Standard: taxpayers now paying for £800m Olympic land debt
Seems like there is more pain to come in this article from The Evening Standard -
Government ministers have clashed with the London Development Agency over an £800million debt incurred in buying up the land for the 2012 Olympics.
The LDA, which took out the loan four years ago to buy the 500-acre site, now wants it to pass to central government.
The Olympic Park Legacy Company, established by Boris Johnson and the Government, opens for business next month with the task of attracting developers to take on the site after 2012. But its chairwoman Baroness Ford insists that the company cannot take on the LDA’s debt as it will deter potential investors.
It is thought she has been successful in convincing the Department for Communities and Local Government to take the loan on to its books – even if this breaches Treasury rules on departmental borrowing.
The LDA, the Mayor’s property agency, is confident it is within its legal rights to refuse to retain the £800million. The situation could force the Government to issue fresh legislation to force the LDA to keep the debt.
“We are in discussions with Olympic partners about the financial set-up of the OPLC,” said an LDA spokesman. “While it is essential that the company has the best start, the LDA is committed to ensuring that it protects its core programmes as well as safeguarding the public purse.”
It emerged this month that the LDA’s land acquisition programme for the Games had overshot by £160million, bringing the total to £1.1billion.
At a City Hall hearing last week chairman Harvey McGrath blamed inadequate accounting controls and revealed that the accountant responsible for the spending was unqualified.
LDA projects totalling £21million this year have been scrapped or cut back to make up for the losses. The £160million black hole will be paid off by the LDA through budget savings. This is not part of government negotiations.
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