Grass-roots sports are losers in £440m Olympic cash grab

An investigation by the London Assembly warned of knock-on effects from the decision to transfer almost £2.2billion of Lottery cash to help pay the rising cost of the 2012 Games.

The total diverted from the Lottery increased last year from £1.5 billion - half of which will come from new Olympic-themed games - to £2.175 billion when public investment in the Games quadrupled to £9.3 billion.

Today the assembly report said that two key elements of the wider Olympics programme - a "cultural Olympiad" and the promise to increase grass-roots sports participation - were at risk from a lack of cash.

It said community organisations had a vital role to play in both areas - but were the very bodies that would be hardest hit by the increased cash grab from the Lottery.

The Government target is to increase the number of people who are "physically active" by one per cent a year until 2012 and for the UK's athletes to come fourth in the medal table.

The cultural Olympiad includes the Olympic torch relay, 10 major projects "inspired by the UK's diverse creative industries" and a series of local events and celebrations.

The report said: "The Achilles' heel of the cultural Olympiad is the lack of money to fund it."

Dee Doocey, Liberal Democrat chairwoman of the assembly's culture and sport committee, said: "We are not denying that the capital will reap huge benefits as host city of the 2012 Games.

"However, our investigation shows that the onthe-ground opportunities Londoners were promised are at risk because the funding diversion effectively hamstrings the organisations needed to deliver them... Our research suggests that smaller organisations will suffer most."

According to the report, London has received more than £4 billion of the £18 billion raised by the Lottery since it began in 1994 - a proportion well in excess to its share of the population. But when grants below £10,000 were considered, London did worse than average.

Olympics organisers have dismissed the concerns, saying that the Games themselves are a "good cause" and therefore deserving of Lottery money. At present, Lottery money is split between five good causes - sports, arts, heritage, charities, and health, education and the environment.

No current projects will have their funding withdrawn but it is not yet clear where the axe will fall on future funding applications.

The Assembly calculates that the capital stands to lose about £440million - an amount equal to the 24 per cent share of Lottery payouts it has received since the fund's inception.

It highlights the dilemma faced by Sport England, the organisation tasked with promoting grass-roots sport. It is contributing £50.5 million towards the aquatics centre and velopark - cash that could have provided 20 community swimming pools, 19 sports halls, 841 grass pitches or 721 games areas.