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Lottery fury at £9bn Olympics bill
Last updated at 14:52pm on 16.03.07
Mike Catt: This will have a real impact on the drive get more and more people doing sport
The new deal overseen by Gordon Brown aims to put the 2012 Olympics on a solid footing
Lottery bosses were in open revolt last night after Tessa Jowell grabbed £2.2billion from good causes to pay the spiralling bill for the 2012 Olympics.
Schools, historic buildings, village halls and sports and arts groups across the UK face a massive spending squeeze for years after the cost of the London Games almost quadrupled to £9.3billion.
A fifth of the entire lottery budget until 2013 will be swallowed by the Olympics - with almost everybody losing out.
More here...
• Jowell left £1bn off bill for 2012
• In Athens: the bill is still rising
• Brown: My vision for an Olympic triumph
• Final Olympics budget to be revealed
Culture Secretary Miss Jowell sanctioned the cash raid after finally admitting how spectacularly the bill had rocketed from its original estimate of £2.37billion.
The Government is now being forced to bail out the project to the tune of £5.95billion of taxpayers' money - £4.9billion more than first planned. It will bite deeply into Chancellor Gordon Brown's summer spending review, with public services hit.
The lottery raid was bitterly criticised by fund chiefs, including usually loyal New Labour supporters.
Sport England chairman Derek Mapp, a friend of John Prescott, said the loss of £55.9million of his organisation's lottery cash would hit community sport and seriously endanger hopes of creating a sporting legacy from the Olympics. He declared: "This is a cut too far."
Big Lottery Fund chairman Sir Clive Booth, who campaigned for Labour at the last three elections, spoke of his "deep regret".
The Fund, known as BIG, is the largest single loser, with £638million snatched over the next six years. It could have paid for new school gyms, open to the whole community.
BIG also pays for thousands of health, education and environment projects each year.
MPs mocked Miss Jowell during her statement to the Commons. They pointed out that when the Games was awarded to London in July 2005 she insisted the £2.375 billion budget was sound. Last year, she had to concede the bill had risen by £900million. And, finally, she has confirmed it is now a staggering £9.35billion.
The total includes £3.1billion for site and stadium construction, £1.7billion to regenerate London's East End, and a vast £2.7billion contingency fund for overspends.
There is a tax bill of £840million and £600million for security in the wake of July 7. A further £390million will go on the Paralympics and paying for sports coaches.
All these figures are either huge increases or were simply left out of the bid document submitted to Olympic chiefs and MPs. The lottery was originally supposed to provide £1.5billion. Yesterday that was increased by £675million.
MPs and peers will have to sanction the raid, however, and may yet embarrass ministers with a revolt.
Shadow Culture Secretary Hugo Swire said: "Gordon Brown's latest raid on the lottery will devastate good causes up and down the country. It was the Chancellor who signed off the original budget, and he is raiding the lottery pot again to pay for his own mistakes.
"This admission means the taxpayer will be contributing an extra £5billion and the lottery another £700million. The Chancellor will be responsible for closing projects and denying much-needed revenue for arts, heritage and grass-roots sport."
Every lottery distributor, apart from UK Sport, will be clobbered. Arts and Film Councils across the UK will lose a combined £161.2million. The Heritage Lottery Fund, which pays out to repair crumbling buildings and support museums, will miss out on £161million.
Miss Jowell said no existing lottery projects would be affected. The cash will be slashed from the sums the distributors would have received.
She also said charities and voluntary groups would be protected, telling MPs: "I am determined to ensure that this temporary diversion from the existing good causes to the Olympic good cause is done with the least possible disruption. London 2012 will bring huge financial gain to the whole country."
But Mr Mapp insisted: £The decision to divert a further £55.9million of Sport England's income between 2009 and 2012 is a cut too far and
seriously endangers the creation of a sporting legacy from the Games.
"The bid had at its heart a promise to build a legacy by increasing participation in sport and boosting community sport across the country.
"It is difficult to see how such a significant reduction in funding for these activities can be squared with the clear commitments the Government has already made about the wider benefits the Games will bring.
"This cut is a real blow to community sport in England. No other country has succeeded in delivering a sporting legacy from their Games. This makes our attempt harder."
Dame Liz Forgan, chairman of the Heritage Lottery Fund, said: "This is bad news for the UK's heritage. Our grant-making for the foreseeable future will be seriously reduced, affecting people right across the country.
"In recent years lottery money has been the single largest source of support, not only for our historic places, museums and galleries, but also for our natural heritage and cultural history."
Peter Hewitt, chief executive of Arts Council England, said: "We are deeply disappointed that more money is to be diverted from the arts. The impact is likely to be felt across the whole of England and disproportionately by smaller arts organisations, local projects and individual artists."
Tory MP Nigel Evans said: "The fact is that the Olympic symbol, the rings, are hanging like a noose now over future generations who are going to have to pay this huge debt that the Government has created because they have lost control over the financing of the Olympic Games."
In a bid to stop the bill rising even further, Miss Jowell has been told by the Treasury to bring in new project managers and financial experts.
London Mayor Ken Livingstone has pledged a further £300million from the Greater London Authority but said council taxpayers would not have to pay any extra.
The spiralling costs focus attention on the worrying financial legacy of other modern Olympics.
Montreal took until 2005 to finish paying its debts from the 1976 Games, while the acknowledged cost of Athens 2004 is now approaching £billion - four times the original estimate.
Reader views (19)
When you see the list of politically correct, minority causes much of the lottery 'good cause' money goes to, the the London Olympics is a most erstwhile destination for the money.
- Roy G, Solihull, Nr Birmingham
Perhaps those who don't agree should just stop buying the lottery tickets.
- Mike Melbourne, Bedford
Biggest park in Europe for 250 years.
5000 new homes.
The clearing and landscaping of the Bow Back waters, canalside living in East London.
The clearing of fridge mountains, breakers yards, travellers' sites and decaying warehouses.
A legacy of sports facilities for some of the most deprived homes in the country.
The chance to showcase the best of British sport.
Bring it on.
- Ben Potter, London
If we really want to improve access to sport across the UK, why not pull out of the Games, hand the so-called honour to Paris and use a few of the billions that the Treasury apparently has spare to buy back some of the school playing fields that Bliar and his friends have covered in over-priced housing.
- David, Cambridge, UK
As stated before, the olympic project was won under false pretences and I'm surprised IOC hasn't had something to say.
I'm also surprised Jowell still holds her job, after all she signs things like big mortgages without understanding what she's signing, so she says so why would she understand the costs for something this big?
- Stan, Expat
We have years of escalating costs to go yet. I am confident now that the cost will top £20bn. However you divide it up that is £300 for every man woman and child in the country and all for two weeks of sport which most people aren't interested in. At the end of it we will be left with a load of dusty, windswept sports facilities which will be in the wrong place and of the wrong type for further use, plus a load of substandard, unsuitable housing that will turn into sink estates after a few years.
- Alan, London
Amazing isn't it? There's a postcode lottery on the NHS, tuition fees, cuts in public services like the rubbish only being collected once a fortnight but we have the money for the Olympics! Absolute disgrace.
- Alexa, London
Here is a thought. The IOC should foot the bill for the olympics wherever they are staged. Each participating country should contribute a set amount dictated by their GDP to the IOC and the country with the best case for staging the games will then benefit from the investment. That way we could see the games going to countries that need the inward investment but who can also successfully host the games without them being hamstrung with debt for the next x years.
- Dan, Manchester
The sheer incompetence of the Treasury in that nobody thought to make a scrutiny of the Greek experience, where the bill is likely to exceed 10 billion pounds, makes the mind boggle.
One can only conclude this is not incompetency, but out and out deceit, a practice Brown is very familiar with.
- Bingham Macnamara, Lymington, UK
These olympics will only be good for the political elite, ie. Ken, Tony and Gordon. Nobody else from the UK will enjoy it, especially not the Londoners who can not get there because of overcrowding and costs.
The Lottery should not have to pay for these olympics!
- Gerogie, London
When London won the games the Scottish Executive told us that we would benefit directly as a result. In fact all areas of the UK would profit from the games, still waiting for the details...
- John Jamieson, Edinburgh, Scotland
There must be some very big snouts in the trough now and a lot of them. Who did the original estimates? Are they still in any area of responsibility. They have no credibility. Why raid £2B from the lottery (destined for good causes) and then still tax the project to the tune of £800m? Crazy. I shall not play the lottery any more. But in fairness they will be creating many many millionaires with the Olympic project than the lottery would. I still want to know how the revenue from the 1000's of new build homes will be distributed. Or is this a little perk for the business people involved?
- Anon, London
It doesn't say here how much will come from other Big Lottery Fund funding streams. I work for a charity which helps some of the most vulnerable people in this country and is helped to do so thanks to lottery funding. By raiding this fund, we are robbing the country's poorest to put on the games. I actually think it would be better to have a one off tax of £100 per working person. Except if course it would be political suicide for Gordon Brown. But why should the most vulnerable pay? If we want to put on these games (and I thnk most people do) then we need to have an honest and realistic debate about how to pay for them, not just tax the voiceless poor.
- Rachel Groves, London
The sheer incompetence of New Labour makes your head spin like a roulette wheel. Whichever figure the ball settles upon it is clear the tax paying public will be the loosers. They ought to give some consideration to the very deep back pockets which will become more in evidence as the project nears completion.
- Robert, Hull, East Yorks
Well, it's Euromillions for me now...
I am not helping Blair/Brown out of their quagmire by doing the Lottery.
How much more is Blair's "legacy" going to cost us?
- Bingham Macnamara, Lymington, UK
The real scandal is yet to emerge; after all, how long is it to the Olympic games? We surely fully know this isn't the last upward readjustment to the costs the government will be forcing on the country for an event that most in England believe only 'benefits' London. Wait and see… (and what happens when the facilities aren't ready… time is short). The Jowell will no doubt have moved to pastures new by then.
Oliver, Ludlow, Shropshire
- Oliver Frey, Ludlow, Shropshire
Just to point out that typically with this sort of thing you've got nowhere near the final bill and the current figure is likely to increase by half as much again at least. The increased costs will hit Londoners especially in all sorts of ways which are not immediately apparent and will contribute to increased financial hardship for large sectors of the populace. This is an elitist project for which London was least of all ever fit.
- Richard Warwick, London
The scandalous announcement by La Jowell - she whose 'estranged' husband is currently on trial for fraud in Italy! - is further evidence that not a penny of public money should be paid towards the Olympics. That the costs have quadrupled since we 'won' the games is beyond comprehension. The costs should be reduced to the absolute minimum and be funded by public subscription, and the ridiculous pretence of 'regeneration' abandoned as simply laughable. When hospital beds are closing for want of funding, when schools need teachers, books and resources, when our pensioners are living in poverty and hard-working peoples' pension funds are breaking at the seams, when our creaking Tube is crying out for renewal - what happens? the 'Government' blows NINE BILLION pounds on a two-week sports-fest. You couldn't make it up. The Olympics will bring no lasting benefit, and are a callous waste of taxpayers' money. We should have wished the games on France - our oldest enemy!
- Colin, London
To be fair, some of the causes receiving lottery funding ain't that good!
- Mark, South-East London
