sport

The National Lottery will contribute to the public sector funding package for the Games. 

 

DCMS has published answers to some frequently asked questions about how it is proposed to fund an Olympic Games from the Lottery; how this will impact on existing Lottery good causes; and the UK-wide benefits of staging the Games.

The costs of bidding to host the Olympic and Paralympic Games in London in 2012 were met by DCMS from exchequer funds, by the London Development Agency, and through financial support or value in kind from commercial and other organisations. Lottery funding was not used for bidding costs.

 

A public sector funding package of up to £2.375 billion has been put together to help meet the costs of staging the Games including support for elite sport and associated sports investments. 

 

This figure consists of up to £1.5 billion of Lottery funding, up to £625 million from London council tax and £250 million from the London Development Agency. The Games will be financed through a combination of public and private funding, including ticket sales, marketing and sponsorship, and the sale of television rights.

 

The first £2.05 billion of the funding package will be met from up to £1.5 billion equally from the National new Olympic Lottery, plus up to £550 million from London Council Tax. This equates to a £20 a year increase on Band D council tax, which will start in 2006-07.  

 

Beyond £2.05 billion, provision has been made for a further contribution of £75 million from London Council Tax and then £250 million from the London Development Agency.

 

Of the Lottery contribution to the cost of the Games, Camelot plans to raise £750 million through hypothecated Olympic Lottery games. A further £340 million would come from expenditure by the established Lottery sport distributors. Exactly how this money would be spent is a matter for discussion with the sports distributors, although it is envisaged that the bulk would be met by Sport England. The remaining contribution could be derived by changing the shares of Lottery income passing to existing good causes beyond 2009. It has never been envisaged that percentage shares would be set in stone beyond that date.
 

We are aware that organisations in the Lottery funding sectors have legitimate concerns about the impact of the new Olympic Lottery games on the existing good causes. Camelot's estimates, as reviewed by the National Lottery Commission, are that around 60% of the monies raised from the Olympic Lottery games might come from sales diversions from existing games. This could lead to an overall reduction in income to the existing good causes of just over 5% over the seven-year period of the games.
 
It is, however, worth bearing in mind that the positive public response to the UK hosting the Olympics could have an effect of revitalising the Lottery as a whole. Camelot has advised that the expected receipts timing for the new games means that the reduction in income to existing good causes would be less in the early years of the Olympic Lottery games and greater in the years leading up to 2012. Camelot would continue, of course, to launch non-Olympic Lottery games.
 

Camelot plans to launch the first of the Olympic Lottery games – a scratchcard game – as soon as practicably possible.
   
How can we be confident that the new Lottery games will raise the estimated £750 million?

Camelot's proposals to raise £750 million from the new Olympic Lottery games have been reviewed by the National Lottery Commission. The Commission considers that the proposals are achievable and provide a realistic basis for forward planning. Camelot has contingency plans in place, should the Olympic lottery games under perform, including further games communications and the development of additional games.