A new ‘Memorandum of Understanding’ between Tessa Jowell and Ken Livingstone, deposited in the House of Commons library today, sets out how the Lottery and the London Development Agency will be paid back using proceeds from the land sale.
The agreement is the formalisation of the commitment made by Tessa Jowell in March that the National Lottery would be repaid from the financial benefits of increased land values in the Lower Lea Valley after 2012 as well as reimbursing the LDA for the purchase of the land and relocation of businesses to create the Olympic Park.
The potential proceeds from the sale of land and property are to be shared to allow both the Lottery and the LDA to recover all of their investment. In order to allow continuing spend on regeneration and to repay the Lottery good causes, the proceeds will be shared on a staged basis.
After the LDA has recovered the initial cost of buying the land, the Lottery will recover 75 per cent of its additional funding (£506m), while the LDA recovers 25 per cent of its outstanding costs (£125m), on a pro rata basis. Then each will recover their remaining costs from subsequent sales – with £169m going to the National Lottery and £375m going to the LDA. This will cover the LDA costs in remediating and clearing the Olympic Park land.
Ms Jowell told MPs:
“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.”
Mayor of London, Ken Livingstone, said:
“The new memorandum makes it crystal clear once and for all that the further funding of the 2012 Games agreed between myself and the Secretary of State means Londoners will not have to pay a penny more towards funding the Olympics.
“We now have an agreed funding framework that ensures we can make the quick decisions that will be necessary if we are to continue our success in meeting all our key milestones as we prepare for the Games.
“I am confident that proceeds from land sales will be sufficient to repay the Lottery in full and deliver hundreds of millions of pounds for further investment in local regeneration.”
Notes to editors
1. View the full MOU
2. On the 15 March 2007 the government announced a revised funding provision for the London 2012 Olympic and Paralympics Games
