Memorandum submitted by Sport England
1. IMPACT OF
THE 1999 CRICKET
1.1 We share the Committee's view, expressed
in its previous report on this subject, in May 1999, that the
staging of international sporting events can bring major benefits
to the host nationby assisting both its elite competitors
and increasing community interest in sport.
1.2 We believe that major events can best
do this as part of a wider sports development plan. Accordingly,
we encourage each sport to produce such a plan, and help many
governing bodies in their preparation.
1999: a carnival of cricket
1.3 We were pleased to have played a part
in making it possible for England to stage cricket's 1999 World
Cup. In the early 1990s, we worked with the predecessor of the
England and Wales Cricket Board (ECB), the Test and County Cricket
Board (TCCB), on a Strategy for the Development of Test Match
Grounds. Among its other objectives, the Strategy aimed
to ensure that England had the right quality and quantity of grounds
to stage the World Cup.
1.4 Trent Bridge has been greatly improved
under this Strategy, with substantial Lottery funding from
Sport England providing both improved indoor facilities and new
spectator accommodation. This is bringing long-term benefits to
the gamenot least because Trent Bridge provides over £50,000
a year to the Cricket Foundation in return for the Lottery funded
increases in its capacity.
1.5 Headingley is the next Test venue to
be transformed. In October, Sport England announced that Lottery
funding of £2.9 million will help to increase its capacity,
refurbish the cricket school, and develop a new community sports
1.6 During the World Cup itself, we welcomed
the ECB's efforts to build on its existing sports development
planswhich include the employment of numerous Cricket Development
Officers, helped by £120,000 of funding from Sport England.
It did so by: (i) promoting the World Cup as a "carnival
of cricket"; (ii) taking World Cup matches all around the
country (particularly to areas with large ethnic minority populations);
and (iii) attracting younger supporters to the game.
1.7 In similar vein, we welcomed the ECB's
announcement, in September, that it wouldin futureoffer
half-price admission to young people attending Test matches.
1.8 However, we regret the England team's
early exit from the 1999 World Cup, which reduced domestic interest
in the competition and, therefore, made it more difficult for
the event to be exploited in sports development terms.
Rugby Union: raising its game
1.9 Inevitably, Sport England was not as
deeply involved in Rugby's World Cup, as Wales was the host nation.
However, we were pleased that the Rugby Football Union recognised
the need to exploit the event's sports development potential.
For example, the RFU: (i) organised a "World Cup Run"
which successfully connected a number of schools and clubs; and
(ii) joined forces with Lloyds TSB and Nike to run World Cup-related
workshops and roadshowssupported by Sportsmatch, which
we fundfocusing, respectively, on teacher education and
performance development for young people, often in deprived areas.
In addition, rugby-based numeracy and literacy projects were launched
in schools, targeted at pupils in Key Stages 2 and 3, and Ford
promoted tag rugby in some primary schools, often using the World
Cup theme. The latter is now an integral element in Sport England-promoted
Annual Area Youth Games.
1.10 These initiatives added to the impact
of the RFU's pre-existing sports development programme, including
the employment of 54 Youth Development Officers, including nine
team leaderssupported by Exchequer funding of £200,000
from Sport England.
1.11 More generally, both cricket and rugby
unionas well as rugby leaguefacilities will benefit
from the Safer Sports Grounds Initiative, which is based on the
strategic requirements of cricket and both codes of rugby and
will involve investment of around £7.5 million over the next
1.12 Finally, it is worth noting that rugby
league has just been added to the Sport England's Active Sports
programmewhich already includes cricket and rugby union.
2. SPORT ENGLAND'S
Making the most of major events
2.1 As the Committee noted in May 1999,
the staging of major events can produce invaluable sporting spin-offs,
with Euro 96, for example, generating an appreciable increase
in the number of people playing soccer. (In our view, despite
the excellent efforts of the relevant local authorities, more
could have been done to attract people into the sport on the back
of the event).
2.2 As indicated in Section 1, more systematic
efforts were made to maximise the sporting benefits from last
year's cricket and rugby union World Cups. Both events showed
the importance that is increasingly being attached to ensuring
that all major sporting events are exploited effectively in sports
2.3 Both UK Sport and Sport England, expect
governing bodies, when applying for funding to host sporting events,
to incorporate specific sports development proposals in their
plans. For example, our recent decisions to support two rowing
eventsthe Commonwealth Rowing Championships and the World
University Rowing Championships, both to be held in August 2002were
influenced by the coaching forum and FISA accreditation courses
that will be organised at the same time.
Making a success of the Commonwealth Games
2.4 Looking to the future, we are determined
to maximise the sporting spin-offs from events that, directly
or indirectly, we help to support.
2.5 For example, we want to ensure that
English sport receives the biggest possible boost from the Manchester
Commonwealth Games in 2002. As well as funding many of the facilities
that will stage the Games (and which will subsequently be used
by both casual participants and elite performers), we are vestingthrough
our World Class Performance Programmein England's established
and up-and-coming sportsmen and women. This will increase the
chances of English competitors performing well and, in the process,
becoming sporting role models for young people to emulate and
admire. (Indeed, we are currently developing a successor to the
"sporting Ambassadors" scheme, to ensure that more high-profile
sportsmen and women promote sport to schoolchildren and other
2.6 World Class support is being provided
to English competitors in all seventeen of the sports that will
feature in the Games, and we hope this backing will yield dividends
in terms of the medals tableas it did in Sydney. As we
explained last year, in our ten-year Lottery Strategy, our target
is to help the governing bodies in their collective aspiration
to top the medals table in 2002.
2.7 Sport England is determined to ensure
that the Games' impact is long-lastingand we are playing
a leading role in a legacy programme, designed to secure enduring
sports development benefits for the North West, in particular.
For example, we are involved in: (i) the recruitment and training
of new sports volunteers; (ii) the preparation of Games-related
curriculum packs; and (iii) the "Queen's Relay", which
will help to heighten public interest in the Games.
Investing in the future: the Millennium Youth
2.8 Looking further ahead, Sport England
is equally keen to ensure that the country benefits, on a long-term
basis, from hosting the World Athletics Championships in 2005.
(Please see section 10). We are already working with partners,
including UK Athletics, to prepare development strategies that
will exploit the opportunities created by the staging of such
a major sporting event. UK Athletics is currently completing a
five-year development strategy, with the 2005 World Athletics
Championships as its focus.
2.9 A further example of Sport England's
long-term thinking is provided by its key role in organising and
fundingalong with other partners including, most notably,
BAAthe Millennium Youth Games. In total the Games involved
250,000 twelve-to-fifteen-year-olds, from all parts of the United
Kingdom. Around 6,500 won their way to the Olympic-style Grand
Final, in Southampton, in Augustmaking it one of the biggest
sporting contests in the world. The evaluation of follow-up research
is already under way, to determine the best ways of building on
the event's success.
3. SPORT ENGLAND'S
Lottery funding: tackling economic deprivation
3.1 We have long taken economic factors
into account when considering requests to invest Lottery funding
in the facilities required for major sporting events. For example,
when the Sport England Lottery Panel assessed the Manchester "Sportscity"
application, it took account of both its sporting benefits and
its economic potentialwith an independently produced economic
impact assessment (by KPMG) showing the project's likely effects
on employment (both temporary and permanent), inward investment,
the reclamation of derelict sites, and the regeneration of the
deprived Beswick and Clayton area.
3.2 In addition, we specifically required
Manchester City Council to prepare a Community Development Planwhich
now forms part of the Lottery Funding Agreementto ensure
that the Sportcity's six key sports seek to: (i) involve members
of the local community; and (ii) play their part in alleviating
3.3 Economic factors have also been taken
into account in other decisions on major facilitiessuch
as the Nottingham Ice Arena.
3.4 In the case of Wembley, Sport England
wasand remainsconscious of the project's ability
to revitalise an area of London which DETR indices have shown
to be relatively deprived. We were pleased to become a founder
member of the Wembley Task Force, as we recognised that the project
had a number of non-sporting dimensionsincluding economic
regeneration and infrastructure renewal. Indeed, by June 2000,
the package of regeneration and infrastructure improvements planned
for the Wembley area was worth £106 million.
3.5 After the Secretary of State's decision
to remove athletics from Wembley, we assisted with the assessment
of a number of alternative sites for a stadium for the World Athletics
Championships, and took account of economic factors (including
regeneration potential) as we did so.
Exploiting sport's economic potential
3.6 As far as events themselves are concerned,
UK Sport has the lead responsibility for ensuring that Britain
is able to attract and stage major sporting eventswhich,
by their very nature, are the ones with the greatest economic
potential. Indeed, UK Sport, publishes Major Events: The EconomicsA
Guide to help applicants assess the likely economic impact
of the event for which they are seeking funding. Once these figures
have been produced, UK Sport uses an economic impact model to
refine the statistics and provide a reliable indication of the
event's probable economic effects.
3.7 Sport England supports a number of events
that have a lower profile, but which are of (i) world class status
and (ii) strategic importance, in the context of the sport's development
plans. Events to have been supported on this basis include the
European Coarse Angling Championships which were heldwith
£13,000 of support from Sport Englandin June.
3.8 Although we do consider the likely economic
impact of all events, as we did in the cases of the two rowing
championships to be held in 2002 (for which we will require post-event
economic reports), we do not expect every governing body, however
small, to produce a formal economic impact assessment. For example,
no such requirement was imposed on the National Federation of
Anglers in respect of the European Coarse Angling Championships.
3.9 The seriousness with which Sport England
takes the subject of sport's economic spin-offs has been demonstrated
by (i) our appointment of a specialist in this area, who is currently
leading a number of projects designed to investigate and improve
the synergy between sport and social and economic regeneration,
and (ii) many of the commitments we made in our ten-year Lottery
strategy, Investing for our Sporting Future, published
last May. (Please see, for example, the references to economic
impact studies on pages 19, 36, 39 and 47).
4. PROGRESS OF
Audit after audit for sport after sport
4.1 In the year or so preceding the Committee's
last comments on this subject, in May 1999, national facilities
strategies, jointly prepared by Sport England and the relevant
governing body, were published for: lawn tennis (April 1998);
football (autumn 1998); and athletics (November 1998). In addition,
in the very month when Staging International Sporting Events
was published, strategies were published for basketball and canoeing.
4.2 Since the Committee's Report was published,
we have continued to work very closely with a large number of
national governing bodies to conduct audits and subsequently strategiescovering
sports from badminton to sailing, and cycling to squash. By the
end of 1999-2000, fourteen such strategies were in place, helping
to determine more precisely the sports' national, regional and
New national centres
4.3 The results of our facilities development
work are becoming increasingly apparent. For example:
(i) National Cycling Centre. The Velodrome
in Manchester, has recently attracted a good deal of positive
Press coveragenot least because our Olympic cycling medallists
praised its contribution to their success. Sport England played
a major role in its construction. We identified the need for such
a centre in 1991; we contributed £2 million (from our Exchequer
income) to its costs; we continue to take an active interest in
the project, through the stakeholders' management group; and we
fund the revenue programmes which yielded such excellent dividends
in Sydney and at the recent World Track Championships, which the
Velodrome hosted. (Other Commonwealth Games facilities, also supported
by Sport England, are covered elsewhere in this submission).
(ii) National Hockey Centre. The need for
such a centre was also identified in 1991, and it was subsequently
built (in Milton Keynes) with support of £1.5 million from
Sport England's Exchequer income. As well as giving our top hockey
players an excellent training facility, it provides the country
with a much-needed competition venuegiving us a better
chance of staging more international hockey tournaments in the
(iii) Nottingham Ice Arena. This new facility
is another product of the 1991 document A Framework for the
Development of National Sports Facilities. Supported by £22.5
million of Lottery funding, and with Phase One opening earlier
this year, it will be the only twin "pads" centre in
the United Kingdom and, therefore, the sole UK venue capable of
meeting the sport's competition requirements. It will be used
extensively by members of the community, as well as by elite competitors.
Eighty facilities for the English Institute of
4.4 Both the Velodrome in Manchester and
the Ice Arena in Nottingham are components of the English Institute
of Sportwhich is, itself, part of the United Kingdom Sports
Institute. Other elements of the EIS include the National Badminton
Centre in Milton Keynes (supported with £3.6 million of Lottery
funding) and Manchester's new Aquatics Centrewhich will
also be used for the Commonwealth Games. Each of these facilities
is already available to athletes, while the development of other
parts of the Institute is currently in progress. In total, Lottery
awards totalling £120 million are being given to no fewer
than 80 facilities, on key sites across the country, that will
together form the EIS. (Please see para 11.6)
2002 COMMONWEALTH GAMESTO
1999, TOGETHER WITH
THE 2002 COMMONWEALTH
Sport England: the Games' biggest single supporter
5.1 As the Committee noted in May 1999,
Manchester City Council and Manchester Commonwealth Games Ltd
had the lead responsibility for organising the 2002 Gamesand
this continues to be the case. However, Sport England is deeply
committed to the Games and their success: we are, in financial
terms, the Games' biggest single supporterwith our total
contribution amounting to approximately £120 million.
5.2 The fruits of this investment are becoming
increasingly obvious as the Games draw closer. For example, in
October Her Majesty, the Queen opened the new Manchester Aquatics
Centre, supported by almost £22 million of Lottery funding,
which will host all the swimming and diving competitions in 2002.
In the meantime, the facility is being enjoyed by elite competitors
and members of the local community alikeand each group
will continue to use it long after the Games are over. Indeed,
the Centre (which includes two 50-metre pools) will be both an
important community facility and an integral part of the EIS for
many years to come.
5.3 £6 million is being invested in
new facilities at Bisley which, although far from Manchester,
will host all the Games' shooting events. These facilities, which
will enhance Bisley's status as the National Shooting Centre,
include a clay target range, upgraded 50-metre and 20-metre ranges,
and indoor airgun and smallbore ranges. Bisley will also cater
for the training needs of our elite competitors and, after the
£6 million redevelopment is complete, it will be firmly established
as the world's leading centre for shooting.
5.4 Sport England's support for the new
City of Manchester Stadium represents by far its biggest single
investment in the Commonwealth Gameswith Lottery funding
meeting the majority of its costs. This new, state-of-the-art
stadium will be used for the rugby sevens, plus all the Games'
athletics events, and remains on target for completion in March
5.5 To ensure that the stadium has a viable
future after the Games, it will become, once the necessary adaptations
have been made, the new home of Manchester City Football Club
from the 2003-2004 season onwards. As well as making parts of
the stadium available for community use, Manchester City will
pay rent for their occupancy of this facilitymoney that
will contribute to the viability of the wider Sportcity site,
including the National Cycling Centre.
Sporting excellence and urban regeneration
5.6 The City of Manchester Stadium will
be only one part of the new SportCity, which will regenerate the
currently deprived Eastlands area of Manchester. The other new
facilities in the locality will include an Indoor Tennis Centre
(which will host the Games' tennis and table-tennis competitions)
and the new National Squash Centre (which will also be used in
the Games)both of which will become parts of the English
Institute of Sport.
Investing in community participants as well as
5.7 Sport England has been keen to ensure
that Lottery applications from community sports groups in Manchester
are not disadvantaged because of the city's success in attracting
funding for facilities for the Commonwealth Games. All applications
from such groups continue to be assessed objectively, on their
merits, and in accordance with the usual criteria employed by
the Sport England Lottery Panel.
5.8 As a result, many community sports projects
in Manchester have successfully attracted Lottery funding, totalling
almost £8.9 million. The grants to have been made include:
£241,097 for School Sports Co-ordinators (at the Wright Robinson
Sports College and in the East Manchester Education Action Zone);
£200,624 for the Greater Manchester Sports Partnership; and
£45,000 for Manchester's involvement in the Millennium Youth
Games. In 1999-2000, Greater Manchester received more Lottery
funding£1,593,527for community sports projects
than the three other areas (Cheshire, Lancashire and Merseyside)
in Sport England's North West region.
5.9 Indeed, in terms of Lottery funding,
Manchester has been a successful part of a successful region.
The North West has received more money from the Sport England
Lottery Fund, on a per capita basis, than most other regionseven
if Commonwealth Games facilities are excluded from the calculation.
A "Minister for Events"
5.10 Finally, Sport England would like to
take this opportunity to recognise the role of the Rt Hon Ian
McCartney MP in helping to co-ordinate the Government's involvement
in the 2002 Commonwealth Games. In our view, his position as,
in effect, a "Minister for Events" has been beneficial
to the overall progress of the project.
2003 WORLD INDOOR
Sport England/UK Sport
6.1 We feel unable to provide the Committee
with an authoritative update on the arrangements for the 2003
Championships, as they are the responsibility of UK Sportnot
7. THE FINANCING
2006 FIFA WORLD CUP
Strong but conditional support
7.1 As the Committee reports in Staging
International Sporting Events, Sport England provided the
English bid for the 2006 World Cup with support amounting to around
£3 million. (The exact size of the grant is £3,142,000).
7.2 As the Committee noted at the time,
conditions had been attached to this funding. For example, as
the Committee's Report observed, the money would be returned to
Sport England in the event of the bid proving successful.
7.3 Sport England also insisted that the
money it provided should be used only for practical purposesnot
for hospitality, for example. (A breakdown of the actual expenditure
in 1999-2000 is given on page 51 of Sport England's Annual
Report for that year).
7.4 Sport England shared the Committee's
view, expressed in May last year, that the English 2006 bid was
"well conceived, well-managed and well-executed".
A worthwhile investment
7.5 In common with the Football Association,
we regret that years of good work by the 2006 team and its ambassadors
(including Sir Bobby Charlton and Sir Geoff Hurst) were unsuccessful.
7.6 The potential benefits of staging the
World Cup are so enormousin both economic and sports development
termsthat we still feel it was right to provide a good
bid with strong, if conditional, support. As the Committee itself
noted last May, a successful bid would have provided "an
enormous return" and "a significant boost to participation
8. THE PROSPECTS
The need for honesty, transparency and trustworthiness
8.1 The BOA and the Government have previously
indicated that they will support a Britih Olympic bid only when
they have satisfied themselves that the IOC's bidding system is
honest, transparent and capable of earning the confidence of the
Olympic movement as a whole. Accordingly, we look forward to hearing
their assessment of the reforms recently introduced by the International
Feasibility studies on a possible London bid
8.2 We also look forward to the BOA completing
its feasibility studies on a future British Olympic bidwhich,
as the Association has previously indicated, would be based on
8.3 We can understand why, in the run-up
to Sydney, the BOA had other pre-occupationsnot least the
preparation of the Gold Coast training camp, which was warmly
praised by the Committee in May 1999 and proved so advantageous
to our Olympic and Paralympic competitors earlier this year. Now,
though, it is time for the BOA to complete and publish its long-awaited
feasibility studiesbefore its focus on Athens 2004 becomes
8.4 We hope the feasibility studies will
recognise that (as the Committee noted last year) Olympic facilities
should offer long-term value and viability.
The BOA, Wembley and Picketts Lock
8.5 In particular, we hope the studies will
provide a final and definitive clarification of the BOA's position
on the uses to which (i) Wembley and (ii) the proposed new stadium
at Picketts Lock would be put in the event of London being invited
to host a future Olympic Games.
8.6 However, we recognise that an effective
British bid does not depend on the BOA alone. As the Committee
noted in 1999, any such bid "would require public investment"and
that investment would, in our view, have to be very substantial,
particularly if Britain is to rise to the new Olympic and Paralympic
standards recently set by Sydney.
9. SPORT ENGLAND'S
OF £20 MILLION
FA/WNSL TO SPORT
Key contextual information
9.1 The origins of the national stadium
project date back to 1994, when, following approaches from the
key sports concerned, the then Sports Council explored the need
for such a new stadium.
9.2 It is noted that, of the major spectator
sports, the needs of rugby union and cricket were already being
metin the case of the former, by the redevelopment of Twickenham
and, in the case of the latter, by the development of a strategy,
mentioned in section 1, for improving Test Match grounds.
9.3 It was apparent that, in contrast, three
other major spectator sportsfootball, athletics and rugby
leaguelacked a modern national stadium. Each of the three
had used Wembley: it had been football's "home" since
1923; rugby league had used it since 1929; and Wembley had hosted
the 1948 Olympics. By the 1990s, however, it was becoming increasingly
apparent that Wembley was nearing the end of its working life,
and a new national stadiummeeting the needs of these three
9.4 After a competitive selection processalso
involving bids from Birmingham, Bradford, Manchester and SheffieldWembley
was selected as the preferred site for this new national stadium.
As the Committee noted, in May 1999, the selection process was
one in which each of the relevant governing bodiesthe Football
Association, the Football League, the FA Premier League, the Rugby
Football League, and the British Athletic Federationwas
9.5 Throughout this procedure, the brief
for the project recognised that the new stadium had to meet (i)
the needs of the three sports and (ii) the relevant international
standards, so that it could host world-class sporting contests.
In the case of athletics, this meant the technical requirements
specified by the International Amateur Athletic Federation.
9.6 Over the period of its development,
the concept of a three-sport stadium received sport's and political
9.7 It was widely accepted that, because
of (i) its likely event profile and (ii) the economics of the
project, which involved the majority of the funding coming from
football, the stadium should ordinarily be configured in a way
that would meet the needs of soccerwhich are essentially
the same as those of rugby league. The stadium would then be adapted
whenever necessary for the large-scale athletics events that could
not be hosted by any of the country's existing athletics stadia.
As the Committee observed, in May 1999, only two events fell into
this categorythe Olympics and the World Athletics Championships.
9.8 The stadium designers considered the
advantages, disadvantages and costs of the different ways of converting
the new stadium into athletics mode. As Wembley National Stadium
Limited told the Committee in April 1999, their architects had
proposed the construction of a temporary "platform"
or "deck" as the most appropriate and cost-effective
means of conversion. Ultimately, in July 1999, this design solution
was agreed by each of the key parties and publicly launched.
9.9 However, on 1 December 1999, the Secretary
of State announced that, having considered a consultant's report
on the design solution's suitability for athletics (i) athletics
events might not, after all, take place at the new Wembley stadium
and (ii) a new venue would probably have to be found for the World
Athletics Championships in 2005. (Please see section 10).
9.10 Later in December, the Secretary of
State confirmed that the new Wembley stadium would be used only
for football and rugby league, and alternative arrangements would
be made for athletics. He added that the Football Association
had "proposed that £20 million of the existing Lottery
grant be returned to Sport England", in recognition of the
fact that, following his announcement, the new stadium would no
longer be required to host athletics.
9.11 Giving oral evidence to the Select
Committee, the Secretary of State reiterated, on 1st February,
his doubts about Wembley's suitability for athletics, and explained
how the proposed £20 million payment had been agreed at a
meeting he had had, on the morning of 22 December, with the Chairman
of WNSL, Ken Bates.
Compliance with the Lottery Funding Agreement
9.12 As the Chief Executive of Sport England
indicated in oral evidence to the Committee, on 27 January, there
appeared to be no contractual basis for WNSL having to repay any
of its £120 million Lottery grant. As WNSL had met the conditions
of the Lottery Funding Agreement, not least by ensuring that the
new stadium could stage major athletics events to IAAF requirements,
no repayment was legally necessary.
The proposed payment of £20 million from
the FA/WNSL to Sport England
9.13 The Secretary of State wrote to Mr
Bates on 7 January, confirming that (i) athletics would be removed
from the Wembley project (ii) in return, the FA/WNSL would pay
£20 million to Sport England over a five-year period, beginning
in December 2000; and (iii) the detailed arrangements would have
to be resolved by Sport England and the Football Association.
9.14 Having received a copy of this letter,
Sport England reviewed the extant Lottery Funding Agreement in
the light of this arrangement and against the Policy and Financial
Directions which guide its operation as a Lottery distributor.
In addition, Sport England commissioned expert legal advice and,
after receiving Counsel's opinion:
(i) informed the FA/WNSL that they would
need to re-submit their grant application in order to request
a change in the purpose of the project (ie the removal of athletics);
(ii) decided to consult, once the resubmitted
application had been received, all interested parties to assess
the demand for athletics at the new stadium, in the context of
the Secretary of State's announcement and their previous stated
(iii) emphasised that the re-submitted application
would need to be assessed and presented to its Council members
Changes to the Lottery Funding Agreement
9.15 Differing interpretations of the scope
of the agreement (in relation to commercial restraints, such as
naming rights) of 22 December, between DCMS and WNSL, caused a
delay of several months. However, negotiations to resolve these
issues reached a successful resolution in mid-September, when
it was agreed that:
(i) WNSL/FA would re-submit their grant application,
requesting the removal of athletics. They would, in return, pay
£20 million to Sport England;
(ii) the relaxation of commercial restraints
would not form part of this application, but the FA/WNSL would
reserve the right to re-submit the application at some future
stage (following financial close) on the basis and understanding
that Sport England would have the unfettered right to approve
or reject the request;
(iii) the key interested parties would be
consulted formally for their views before this applicationseeking
the formal and final withdrawal of athletics from Wembleywas
considered by Sport England. (Accordingly, consultation letters
were sent, on 6 October, to: the Secretary of State; the British
Olympic Association; UK Athletics; the London 2005 Organising
Committee for the World Athletics Championships; UK Sport; and
the English National Stadium Trust;
(iv) the application would subsequently be
appraised and presented to the Sport England Lottery Panel and,
ultimately, to the organisation's Council members for decision;
(v) changes to the Lottery Funding Agreement
would reflect the withdrawal of athletics from Wembley and, if
approved, the handling of the £20 million payment would be
agreed prior to financial close; and
(vi) until any variation to the Lottery Funding
Agreement was agreed and entered into, the original terms of the
LFA would remain valid in full.
The timing of the proposed £20 million payment
9.16 The FA/WNSL re-submitted their application
on 29 September, on the following basis:
(i) the obligation on the new Wembley stadium
to host the World Athletics Championships and the Olympic Games
on a "cost-only" basis would be removed;
(ii) the obligation to retain the design
capability for athletics would also be removed;
(iii) £20 million would be paid to Sport
England, by WNSL, over five years, in line with the following
timetable: December 2000, £3 million; December 2001, £3
million; December 2002, £3 million; December 2003, £5
million; and December 2004, £6 million;
(iv) the athletics obligations would be removed
at the time of the variation to the Lottery Funding Agreement
being signednot when the final element of the £20
million payment had been paid; and
(v) there would be a progressive reduction
in grant liabilities under the Lottery Funding Agreement, reflecting
the payment schedule summarised above.
9.17 A joint meeting of Sport England's
Council and Lottery Panel members considered a range of Wembley-related
issues on 6 November. In doing so, they concluded that the main
issues were not technical or financial as (i) there had been no
discernible breach of the Lottery Funding Agreement's technical
requirements and (ii) there was no technical or pre-existing legal
basis for a payment of £20 million to Sport England.
9.18 The Council and Panel members concluded,
however, that the main issues they had to consider in deciding
upon the new application were:
(i) demand for the project. The brief for
the new national stadium has always been based on the expressed
demand of the three sports involved. Should athletics' governing
bodyand the bodies involved in bidding for and staging
the Olympics and the World Athletics Championshipsstate
that they no longer had a need for the Wembley project to accommodate
athletics, it would seem reasonable for Sport England to accede
to their views; and
(ii) an alternative home for athletics. The
availability of an alternative project that would provide a new
home for athletics, capable of hosting world-class events.
9.19 The second of these issues is considered
later in this submission, in section 10on Picketts Lock.
As far as the former issue is concerned, Sport England's Council
and Panel members considered the arguments that had been put forward,
by 6 November, as part of the consultation process. In summary:
(i) the British Olympic Association, while
wanting to see athletics removed from Wembley, sought to ensure
that the new Wembley stadium would host other Olympic events on
a "cost-only" basis;
(ii) DCMS wished to remove athletics from
Wembley but retain the obligation for it to hoston a "cost-only"
basisOlympic events (such as the football tournament) which
would require no alterations to the stadium;
(iii) the London Organising Committee 2005
sought the removal of athletics from the project, on the basis
that in its opinion the Government had guaranteed
that a purpose-built athletics stadium would be developed at Picketts
Lock. It was the personal view of the Chairman, however, that
the Wembley option should be retained until the viability of the
proposed Picketts Lock stadium had been confirmed;
(iv) UK Athletics wanted athletics to be
removed from Wembley, while recognising that an alternative venue
for the 2005 World Athletics Championships had yet to be confirmed;
(v) UK Sport believed that the new Wembley
stadium should host Olympic athletics events but not the World
Athletics Championships which, in its view, should be staged at
9.20 Given the lack of unanimity, it was
decided, at the joint meeting (on 6 November) to have further
consultations with interested parties, and subsequently re-consider
the issue at the next Council meeting (on 4 December).
9.21 Prior to this second meeting, further
responses were received from the following organisations, whose
views are summarised below:
(i) DCMS. The Secretary of State reiterated
his view that athletics should be removed from Wembley, but that
it should stage Olympic events which did not require alterations
to the stadium;
(ii) the London Organising Committee 2005
and UK Athletics still wished to see athletics removed from Wembley,
while recognising that the Government had not necessarily guaranteed
a new stadium for 2005; and
(iii) UK Sport stated that they previously
had written in error, and did not want to see any athletics events
staged at Wembley.
9.22 On 4 December, Sport England's Council
members considered the FA/WNSL application, requesting the removal
of athletics from Wembley. After extensive deliberations, they
agreed to this request on the basis that:
(i) there is no longer any demand from the
relevant athletics bodies, or the Government, for athletics events
to be staged at Wembley;
(ii) early progress has been made on an alternative
project, Picketts Lock (although further work is needed); and
(iii) the removal of athletics from Wembley
will result in Sport England receiving a £20 million payment
without which, if the Panel decides to allocate this money to
athletics, there would be a more difficult prospect of bridging
the current funding gap in respect of Picketts Lock.
9.23 The Council reiterated its position
on the Picketts Lock application being assessed against the usual
General progress: an update
9.24 After a number of delaysincluding
the uncertainties over athleticsgood progress has been
made on many other aspects of the Wembley project, as outlined
in the submission the Committee has received from Wembley National
9.25 We welcome this progress which, since
the Committee completed its inquiry into Wembley, has seen:
(i) the project secure planning and listed
building consent from the London Borough of Brent;
(ii) the agreement of an associated Section
106 planning agreement, relating to transport improvements;
(iii) the appointment of a design and procurement
contractor, Multiplex; and
(iv) the launching, by the project financiers
(Chase Manhattan), of a syndication process to secure the remaining
9.26 Throughout this period, Sport England
has closely measured progress against both (i) the Lottery Funding
Agreement and (ii) its Policy and Financial Directions.
2005 WORLD ATHLETICS
Seeking an alternative to Wembley for 2005
10.1 We have long been keen for the United
Kingdom to host the World Athletics Championships. The United
Kingdom has never previously staged them and the hosting of a
successful Championships would strengthen, significantly, the
country's chances of attracting other major sporting events in
10.2 Since the Secretary of State first
expressed concern about Wembley's suitability for athletics, on
1 December 1999, Sport England has worked, with a variety of partners,
to help identify a suitable alternative venue, within London,
for the 2005 World Athletics Championships.
10.3 A large number of options were considered.
By spring 2000, many had been rejected, leaving a short-list of
five potential sitesHillingdon House Farm, Hackney Wick,
Crystal Palace, Twickenham and Picketts Lock.
10.4 Sport England identified the key issues
relevant to each of these sites, in order to provide a basis for
decision by UK Athletics. Our report reached the following conclusions:
(i) at that stage, there was a lack of certainty
about the project being easily deliverable at any of the five
(ii) preliminary cost assessments suggested
that the aspirations of UK Athletics were unlikely to be realised
within the budget (£60 million) expected to be available;
(iii) the project's long-term viability required
10.5 While the report considered the advantages
and disadvantages of each site, it did not include a recommendation
as the final decision had to rest with the prospective Lottery
applicant, and it would have been inappropriate for Sport England
to have pre-judged, in any way, the decision that it would subsequently
make on that application as a Lottery distributor. This stance
was accepted by all the other parties involved.
Picketts Lock: UK Athletics' preferred choice
10.6 In March 2000, UK Athletics indicated
that Picketts Lock in the Lee Valley, was its preferred site for
a new stadium to host the World Athletics Championships in 2005.
The factors behind this decision included the size of the site,
its potential ability to attract regeneration funding, and the
positive approach of Middlesex University, which envisaged creating
a new campus in the Lee Valleythus providing athlete accommodation
for the event.
10.7 On 3 April, a panel consisting of UK
Athletics, UK Sport and the Secretary of State attended the International
Amateur Athletic Federation (IAAF) Council in Paris to present
the British bid, based on a new stadium at Picketts Lock, for
the 2005 World Athletics Championships. After receiving reassurances
(on issues such as planning, the project timetable and Government
support), the IAAF accepted the bid and awarded the Championships
to London, at Picketts Lock.
10.8 The Lee Valley Regional Park Authority
subsequently applied to Sport England for grant aid to fund two
feasibility studies on Picketts Lock. In August, Sport England's
Council members approved a grant of £240,000 to help pay
for these studies. (The remaining costs£150,000were
met by the LVRPA itself).
The first feasibility studies: technical feasibility
10.9 The first of the studies was conducted
by Drivers Jonas, and considered the technical feasibility of
building a new athletics stadium, capable of hosting top international
events, at Picketts Lockplus the associated planning issues.
10.10 Drivers Jonas were asked by LVRPA,
to base their study on the construction of a stadium capable of
(i) hosting 43,000 spectators for the World Athletics Championships
and, because of the one-off demand for a stadium of this size,
(ii) subsequently having its capacity reduced to approximately
20,000in line with UK Athletics' wishes.
10.11 The Drivers Jonas report, completed
and received by Sport England in October, concluded that the LVRPA
had established technical requirements which provided a basis
for the development of a detailed brief and the commissioning
of design work. The LVRPA's developing proposals now included
(i) a venue for the 2005 World Championships, (ii) a new National
Performance Centre for athletics, and (iii) facilities for community
10.12 Drivers Jonas called for elements
of the project to be clarified or reconsideredsuch as (i)
its non-stadium elements and (ii) whether the stadium itself should
have a permanent capacity of 43,000 or have its capacity reduced
to around 20,000 post-2005.
10.13 While Drivers Jonas noted the LVRPA's
willingness to contribute £5 million to the project's capital
costs, they still identified a funding deficitof £18-23
million. As a result, their report concluded that (i) further
sources of funding should be sought and, depending on the success
of this process, (ii) a reduction in the quality and specification
of the project might be necessary, to help bridge this gap.
The first feasibility studies: economic viability
10.14 The second feasibility study, commissioned
from Ernst and Young, concentrated on (i) the project's likely
economic viability and (ii) options for the project delivery body.
10.15 As part of this study, Ernst and Young
were commissioned to prepare a business plan for the proposed
Picketts Lock development. Three options were considered, based
on (a) an athletics-only facility, (b) an athletics facility,
plus health/fitness/conference/events income, and (c) a range
of other options, including those based on the stadium attracting
an anchor tenant.
10.16 Annual operating deficits were expected
under both option (a) and option (b), with the figures being around
£1 million and £886,000 respectively. Under option (c),
the operating performance would depend on a wide range of issues
but it was noted that the development's ability to generate income
could be limited by a number of factors, including space constraints,
planning issues, and the likely level of demand for the stadium
10.17 It was noted that UK Athletics had
submitted a long list of events which might be held at the new
stadium during the first twenty years of its life. However, at
the time of writing, further clarification is still needed on
(i) UK Athletics' likely success in attracting the "bid-for"
events on its list, (ii) the desirability of Picketts Lock attracting
events traditionally held elsewhere, such as at Sheffield, Gateshead,
Birmingham and Glasgow, and (iii) the income that Picketts Lock
could derive from these and other events.
Bridging the gap? Enfield Council and the London
10.18 After the initial completion of the
Ernst and Young report, the LVRPA and UK Athletics continued to
seek partners who could help them eliminate the likely running
cost deficits that the consultants had identified. In early October,
the London Borough of Enfield and the representatives of the London
Marathon Trust decided, provisionally, to back the project (although
the Trust as a whole has yet to formally consider this).
10.19 We understand, from the LVRPA, that
the support of the Trust would be conditional on a number of important
factors, including athletics having primacy at the new stadium
and the Trust having an active role in (i) its operation, (ii)
event promotion, and (iii) the project delivery body.
10.20 Ernst and Young's report was concluded
in mid-October. LVRPA have since made progress in addressing a
range of ongoing funding issues andhelped by the positive
stances of Enfield Council and representatives of the London Marathon
Trustthe Authority has increased the chances of eliminating,
or minimising, any annual operating deficits.
10.21 Ernst and Young added the proviso
that many offers of support were still of an "in principle"
natureand UK Athletics needed to undertake further work
on the contribution that athletics events would make to the stadium's
Further feasibility studies
10.22 On 6 November, a joint meeting of
Sport England's Council and its Lottery Panel considered a number
of options in respect of Picketts Lock and decided to make an
additional £1.33 million available so that the second stage
of feasibility work could be undertaken. This money is enabling
design, planning, funding and other issues to be taken forward
with a view to further, more detailed reports being completed
by 31 March 2001, when the relevant planning application needs
to be submitted.
10.23 We look forward to receiving the second
tranche of feasibility reports which will help the Council make
an informed decision as and when it receives an application for
the proposed Picketts Lock stadium to receive Lottery funding.
10.24 As with all other applications for
Lottery funding, it will be considered on its merits, and assessedas
required by Sport England's Policy and Financial Directionsagainst
the usual criteria, including viability, eligibility, value for
money, and financial need.
10.25 In relation to viability, the Lottery
Panel and Council have agreed that, when they take their decision,
they will need to take account of its implications for other athletics
venues across Englandas the Committee would wish (see Wembley
National Stadium,para 141).
11. Funding commitments and plans for funding
major events or facilities which might be used for major events
in the context of Sport England's overall funding and forecast
Lottery income in current and future years.
The Community Projects and World Class funds
11.1 As previously indicated to the Select
Committee, in our submission to its inquiry into The Operation
of the National Lottery,Sport England's Lottery income in
1999-2000 was £212.477 million.
11.2 Our ten-year Lottery Strategy, published
last May, explained that this money is divided into two core funds(i)
the Community Projects Fund and (ii) the World Class Fund. Over
this period, three-quarters of our Lottery income will be allocated
to the former, and the remainder to the latter.
11.3 Accordingly, if our income remains
at 1999-2000 levels, the World Class Fund can be expected to receive
around £53 million a year.
11.4 This money has to pay for a wide range
of expenditure, including the World Class athlete support programmes
summarised in our submission on The Operation of the National
The funding of facilities
11.5 It is hard to provide the Committee
with a precise indication of our annual expenditure on facilities
designed to let England host major sporting eventsnot least
because of our insistence that, wherever possible, such facilities
(like Manchester's Aquatics Centre) should meet community needs,
as well as those of international competition.
11.6 However, the Committee may find it
helpful to know that £70 million was budgeted for English
Institute of Sport-related projects in 2000-01, and a further
£50 million has been budgeted for this purpose in 2001-02.
Prudent financial management: Picketts Lock
11.7 In the interests of responsible financial
management, the provision of up to £60 million for a new
national athletics stadium has been factored into Sport England's
long-term financial planning. This reflects the Secretary of State's
calculation of the money that has been saved by removing athletics
from Wembley, plus £20 million that the FA/WNSL has provisionally
agreed to pay to Sport England. However, as previously indicated,
any application from the LVRPA or UK Athletics, in respect of
Picketts Lock will have to be considered on its merit and in accordance
with our usual criteriaeligibility, viability, value for
money and financial need.