Select Committee on Culture, Media and Sport Minutes of Evidence

Memorandum submitted by Sport England


  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 nation—by 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 game—not 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 area.

  1.6  During the World Cup itself, we welcomed the ECB's efforts to build on its existing sports development plans—which 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 would—in future—offer 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 roadshows—supported by Sportsmatch, which we fund—focusing, 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 leaders—supported by Exchequer funding of £200,000 from Sport England.

  1.11  More generally, both cricket and rugby union—as well as rugby league—facilities 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 2-3 years.

  1.12  Finally, it is worth noting that rugby league has just been added to the Sport England's Active Sports programme—which already includes cricket and rugby union.


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 development terms.

  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 events—the Commonwealth Rowing Championships and the World University Rowing Championships, both to be held in August 2002—were 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 vesting—through our World Class Performance Programme—in 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 young people).

  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 table—as 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-lasting—and 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 Games

  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 funding—along with other partners including, most notably, BAA—the 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 August—making 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.


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 potential—with 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 Plan—which now forms part of the Lottery Funding Agreement—to ensure that the Sportcity's six key sports seek to: (i) involve members of the local community; and (ii) play their part in alleviating social exclusion.

  3.3  Economic factors have also been taken into account in other decisions on major facilities—such as the Nottingham Ice Arena.

  3.4  In the case of Wembley, Sport England was—and remains—conscious 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 dimensions—including 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 events—which, by their very nature, are the ones with the greatest economic potential. Indeed, UK Sport, publishes Major Events: The Economics—A 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 held—with £13,000 of support from Sport England—in 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).


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 strategies—covering 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 local needs.

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 coverage—not 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 venue—giving us a better chance of staging more international hockey tournaments in the future.

    (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 Sport

  4.4  Both the Velodrome in Manchester and the Ice Arena in Nottingham are components of the English Institute of Sport—which 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 Centre—which 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)


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 Games—and 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 supporter—with 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 alike—and 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 Games—with 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 2002.

  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 facility—money 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 elite competitors

  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—£1,593,527—for 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 regions—even 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.


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 Sport—not Sport England.


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 purposes—not 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 enormous—in both economic and sports development terms—that 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 in football".


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 Olympic Committee.

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 bid—which, as the Association has previously indicated, would be based on London.

  8.3  We can understand why, in the run-up to Sydney, the BOA had other pre-occupations—not 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 studies—before its focus on Athens 2004 becomes too intense.

  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.


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 met—in 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 sports—football, athletics and rugby league—lacked 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 stadium—meeting the needs of these three sports—was required.

  9.4  After a competitive selection process—also involving bids from Birmingham, Bradford, Manchester and Sheffield—Wembley 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 bodies—the Football Association, the Football League, the FA Premier League, the Rugby Football League, and the British Athletic Federation—was fully involved.

  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 endorsement.

  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 soccer—which 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 category—the 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 positions; and

(iii)  emphasised that the re-submitted application would need to be assessed and presented to its Council members for decision.

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 application—seeking the formal and final withdrawal of athletics from Wembley—was 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 signed—not 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 body—and the bodies involved in bidding for and staging the Olympics and the World Athletics Championships—state 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 10—on 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 host—on a "cost-only" basis—Olympic 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; and

    (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 Picketts Lock

  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 Lottery criteria.

General progress: an update

  9.24  After a number of delays—including the uncertainties over athletics—good progress has been made on many other aspects of the Wembley project, as outlined in the submission the Committee has received from Wembley National Stadium Limited.

  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 funding commitments.

  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.


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 the future.

  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 sites—Hillingdon 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 sites;

    (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; and

    (iii)  the project's long-term viability required careful consideration.

  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 Valley—thus 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—£150,000—were 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 Lock—plus 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 20,000—in 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 use.

  10.12  Drivers Jonas called for elements of the project to be clarified or reconsidered—such 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 deficit—of £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 itself.

  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 Marathon Trust

  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 and—helped by the positive stances of Enfield Council and representatives of the London Marathon Trust—the 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" nature—and UK Athletics needed to undertake further work on the contribution that athletics events would make to the stadium's viability.

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 assessed—as required by Sport England's Policy and Financial Directions—against 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 England—as 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 Lottery.

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 events—not 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 criteria—eligibility, viability, value for money and financial need.

December 2000

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