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Credit crisis is hitting funds for village, say Games chiefs
Jack Lefley23.09.08
London 2012 chiefs have admitted the international financial crisis is making it "just about impossible" to secure private funding for the Olympic village.
Chairman of the Olympic Delivery Authority John Armitt told a 2012 fringe meeting at the Labour party conference of the deep uncertainty created by the credit crunch.
Sitting next to Olympics Minister Tessa Jowell and London Organising Committee head Lord Coe he described how the financial turmoil created by bank collapses and bailouts had hit Olympic funding plans.
The ODA's preferred developer, Australian company Lend Lease, has not been able to raise the £450 million of private funding promised towards the £1billion bill for the village.
The Government has also warned the new Homes and Communities Agency to be prepared to act as a buyer of last resort for the village - a key feature of the east London Games site which will create thousands of new homes.
But Mr Armitt admitted the situation was now even worse than previously thought and said it was unclear how much more money could be raised privately in the current financial climate.
He said: "The reality is that the situation is changing by the day and the amount of finance that was available six months ago, a lot less than that was available two months ago and less than that was probably available last week.
"The reality is that getting a loan from the private sector for just about anything at the moment is just about impossible. And that goes for most businesses. In the meantime we've gone on with building the Olympic village. We are continuing our negotiations with Lend Lease and the banks.
"I'm very confident that we probably have more than half of the village covered. But it's a question of how much we finish up getting from the private sector."
The news follows suggestions that the £525 million Olympic stadium may have to be demolished to build a venue for a Premier League football club.
Ms Jowell spoke of the importance of securing an Olympic legacy for the capital.
She said: "This is what we are doing it for. There is no more powerful motivator than to regenerate the east end of London."
And Lord Coe said: "Fifty per cent of our teams in LOCOG and the ODA have the sole focus of developing great venues. The other half think about how we maximise their use afterwards."
Jonathan Edwards, Britain's former triple jump Olympic champion and world record holder, backed the Evening Standard's campaign to secure a proper sporting legacy for the 2012 Games.
He said: "I don't think anyone believes we should spend billions of pounds for a few weeks of sport. We all hope to look back on 2012 as a moment that changed London and the UK for the better for many generations to come."
Reader views (10)
Perhaps the legacy of all these homes in the village could be used to house all those who have lost their homes and jobs due to the credit crunch.
- Terry, London UK
Stick them all in tents and then stick the tent pole somewhere.
- Frederick, London, UK
No doubt Gordon Brown will consider it "fair" to pass the bill on to the taxpayer - and quickly before he is out of office.
- James Elliott, Eastbourne UK
I the tax payer will help to fund the games even though I don't want them.To help fund them get rid of the vastly overpaid managers and hangers on.They must meet budget by whatever means without getting money from the TAX PAYER who already pay's extortionate rates of tax by both direct & indirect taxes and the government MUST realize this...
will they NO.
- Allan Pointon, Stafford
An isolated council tower block estate, in recent years taken over for student housing, was demolished at the outset of the Olympic building programme: it's beginning to sound as if the end result will be what they started with, and of course the taxpayer will pick up the tab.
Of course the current (and continuing) crash was not allowed for, despite years of warnings from the wiser financial journalists, by all the clever people who are in charge; at the end of it all, I wonder whether Lord Coe will be out of pocket at all?
- Mdj, Leyton, e10 london
They now have a ready made excuse "the credit crunch". Attracting private funding was a smoke screen from the start. You only get private funding if they are going to get more back than they put in, it's called profit, another expense for the London tax payer.
- Mick, London, England
So the poor athletes might miss out and the overseas ones can see what a joke the UK is at times..
Sure all or Mr Coe's mates and the IOC will be ok though.
- Mark, Watford
Never mind. The taxpayer will end up paying out for this no matter what anyone involved in it says.
Lend Lease have just laid off 100 managers in England and sent the cheapest (least value for money) managers to build the olymipics site. At least we know we are getting value for money.
Still not too late to let Paris host it?
- Jimbob, Kensington
Ah. The most expensive council estate in the world, in the middle of nowhere with no transport links, just like classic 1970's GLC overspill. Are you sure Tony's advisers didn't just go through the A-Z with a pin, looking for a big green area to drop into the fantasy they'd conjured up for a bit of feel-good spin? Or am I just being retrospectively cynical?
- Michelle, London
.........and the excuses start !!
- Sarsfields Ghost, London , England.
