On 15 March 2007 when I announced the new funding provision for the London 2012 Olympic and Paralympic Games I said that land values in the Olympic Park were expected to increase considerably as a result of the investment we are making and that the lottery good causes, having contributed a further £675m to the Olympics, should share in any such windfall.
I also said that the Mayor and I had agreed that we would re-write our memorandum of understanding and put in place profit-sharing arrangements to enable the lottery and future regeneration needs of the local area to benefit from the returns on the investment that we are making in the Olympic Park.
The Mayor and I have now agreed a new memorandum of understanding which will enable the lottery, as well as the local area, to benefit from the returns in investment that we are making in the Olympic Park.
The memorandum provides that after the London Development Agency (LDA) has been reimbursed for its land acquisition costs and disturbance compensation payments (which are not expected to exceed £650 million) the proceeds of the Land and Property disposals, as and when made, shall be split between DCMS and LDA in a two-stage process.
top
First, three-quarters of the additional National Lottery income we called upon (£506m) will be re-paid, through DCMS, along with a quarter of the LDA’s costs (£125m) associated with the remediation and disposal of land and buildings in the Olympic Park. This will happen on a pro rata basis.
When this is done, the National Lottery - again through my Department - will be reimbursed the remaining quarter of its contribution £169m) and the LDA will receive the outstanding three-quarters of its costs, £375m. Again, this will be on a pro rata basis.
If there is a surplus once the repayments have been made, the Government will discuss with the Mayor how best to use this money.
These arrangements are set out in the revised memorandum of understanding, a copy of which I have placed in the House Library.
This is a good deal for the National Lottery, for those who benefit from its projects, and for London. It fulfils the promise I made in my statement to this House on March 15th. It should give lottery distributors real confidence that the additional funding necessary for a successful Olympic and Paralympic Games will be re-paid – providing them and the whole country with a further 2012 dividend.
Text of the Memorandum of Understanding between the Government and the Mayor of London.
