The Picketts Lock Stadium
132. When the Secretary of State decided that Wembley
National Stadium would not be the venue for the 2005 World Athletics
Championships, he assured UK Athletics that £60 million would
be available for "world-class athletics".[369]
This was not the Government's own money, but represented the Government's
estimate of what it considered Sport England would have spent
on staging the 2005 World Athletics Championships at Wembley (£40
million), combined with the £20 million payment to Sport
England expected from Wembley National Stadium Limited.[370]
Sport England has repeatedly contested the calculation by the
Government of the level of expenditure required to stage the 2005
Championships at Wembley.[371]
On 21 March, the Secretary of State told this Committee in oral
evidence that Sport England had viewed the least expensive option
for a warm-up site at Copelands School as "a non-starter".[372]
The following day, Mr Brooking, in a letter to the Chairman already
referred to, said:
"We have always made
it clear that Copelands School could have provided an acceptable
warm-up track for the World Athletics Championships in 2005".[373]
However, in the letter on Department for Culture,
Media and Sport headed paper dated 27 March, Mr Brooking put his
name to the statement, signed jointly with the Secretary of State
that, "it was agreed that it [the Copelands School site]
was not ideal" and that, indeed, the Copelands School site
"would be likely to weaken any World Athletics Championship
bid".[374] This
second letter signed by Mr Brooking gives an entirely different
impression to that given in his letter of 22 March which came
from the Sport England offices. Sport England has pointed out
that the £20 million will be worth somewhat less by the time
the payments are completed. Sport England has nevertheless made
what it sees as a "prudent" decision to allocate £20
million from its World Class Performance Plan and £20 million
from its Community Fund to finance a viable bid from athletics.[375]
The uncertainty around the payment timetable of the £20 million
is likely to cause cash-flow problems that may have a detrimental
effect on other bids. The question arises of what happens if the
first payment is not made by the time that the second payment
falls due under the payment timetable on which the Secretary of
State continues to insist.
133. From early 2000, UK Athletics, supported by
Sport England and the Department for Culture, Media and Sport,
sought to select a venue to stage the 2005 Championships.[376]
On 31 January 2000, an outline bid for the event was submitted
with Twickenham as the venue, but the problems that we identified
with that option in early March 2000 proved too great and the
idea was quickly abandoned.[377]
In February 2000, we were told that the other options being explored
included "Hackney Wick, Crystal Palace, Southall, the Linford
Christie Stadium, RAF Northolt and Cricklewood".[378]
By March 2000, a short-list of five sites—Hillingdon House
Farm, Hackney Wick, Crystal Palace, Twickenham and Picketts Lock—had
emerged, from which the last option was chosen as the preferred
venue by UK Athletics.[379]
134. The proposed site for the Stadium at Picketts
Lock comprises 143 acres in Lee Valley Park close to Edmonton
and Ponders End in north east London. The site is approximately
7.5 miles from central London and 2.5 miles south east of Enfield
town centre.[380]
Lee Valley Park is currently the location of a leisure complex
which the owners—Lee Valley Regional Park Authority—were
already seeking to replace.[381]
The proposals included a commitment by the Park Authority to make
capital and revenue contributions and plans for athletes' accommodation
centred on new campuses that Middlesex University intends to develop
nearby.[382]
These factors helped to explain the perceived superiority of the
bid from Picketts Lock to that from Crystal Palace, even though
the latter option involved the temporary conversion of an existing
stadium and held out the prospect of project completion well in
advance of 2004.[383]
135. On 3 April 2000, representatives of UK Athletics,
accompanied by the Secretary of State for Culture, Media and Sport
and representatives of Lee Valley Regional Park Authority and
the London Borough of Enfield, made a submission to the IAAF to
stage the 2005 Championships at Picketts Lock and were awarded
the Championships of that year.[384]
Undertakings were given to the IAAF that "a suitable venue
and supporting infrastructure would be available in time for the
Championships".[385]
UK Athletics considered that the presence of the Secretary of
State and his "assurances over the Stadium", together
with a preceding letter from the Prime Minister stating that "world-class
facilities will be ready", were "crucial" to the
success of the bid.[386]
136. Since April 2000, initial business and design
feasibility studies have been completed and further and more detailed
preparatory work commissioned.[387]
The initial design study estimated that the total cost of the
project would be £95 million, a total based on the cost per
seat of recent traditionally-designed football stadia and including
the cost of conversion of the Stadium from its 43,000-seat capacity
in 2005 to its permanent capacity of 20,000.[388]
The Secretary of State, giving evidence in February, and Lee Valley
Regional Park Authority believed that the total project cost could
be reduced.[389]
That view has been supported by the subsequent announcement that
the latest estimated budget for the Stadium is between £83
and £87 million.[390]
There are, however, several unresolved issues about the project.
137. First, even if the most optimistic cost forecasts
prove correct, there is a funding gap between the known public
provision and the total required. On top of the £60 million
provisionally allocated for athletics, Picketts Lock expects to
receive £7 million also allocated by Sport England from the
Lottery for the high performance infrastructure and £5 million
from Lee Valley Regional Park Authority, creating a total of £72
million.[391]
The remainder is expected to be sought from the commercial sector.[392]
Private sector funding would be sought on a different basis from
that for Wembley National Stadium, because commitments from the
Football Association and commercial facilities are expected to
make Wembley profitable, while Picketts Lock holds out fewer prospects
for commercial gain. The Greater London Authority continued to
be concerned about "the funding shortfall for the Stadium
development".[393]
Mr Moorcroft said that, as time went on, "the gap" between
projected costs and projected funding "has narrowed rather
than been extended".[394]
The Secretary of State did not see the funding gap as "insuperable"
and, on the basis of the interest already apparent, had "every
confidence that that gap will be bridged".[395]
138. Second, it is not clear who will underwrite
the project and bear the ultimate risk if costs exceed the budget
or funding falls short of commitments. There is a tendency for
costs to increase either as the design process progresses—as
was the case with Wembley National Stadium—or during the
construction phase—as is the case with the City of Manchester
Stadium, the costs of which have increased by £4 million
in the last two years.[396]
Lee Valley Regional Park Authority acknowledged that "the
potential financial commitments and liabilities are too large
to be borne or underwritten by any of the existing project partners".[397]
The Park Authority said that the financial risk would either be
borne by the organisation established to deliver the project or
"allocated to private sector partners".[398]
It is not clear what resources the delivery organisation would
have at its disposal to meet unexpected costs or an unexpected
shortfall in funds or why the private sector partners would wish
to accept disproportionate risks.
139. Third, the design process is at an early stage
and begs a number of questions. It is known that the Stadium will
not be built with a roof, even though this was part of the original
design brief, because inclusion of a roof would add about £20
million to the budget.[399]
It is also known that the Stadium will not comply with the optimum
sight-line specification for athletics by which the design for
Wembley National Stadium was judged and found wanting.[400]
Although the technical specifications established by UK Athletics
required "C" values to be calculated with a focal point
on the outside of the outside lane of the athletics track, the
design team found that none of the stadia that were examined by
the team met that viewing standard and decided to settle for a
minimum "C" value of 60 millimetres based on a focal
point on the outside of lane three.[401]
Those new lower standards were considered to be "perfect"
by Mr Moorcroft.[402]
The initial feasibility study made allowance for "a design
of architectural merit" in its cost plan.[403]
According to Sport England, the same study suggested that "a
reduction in the quality and specification of the project might
be necessary to help bridge [the funding] gap".[404]
Mr Brooking attached importance to the quality of the Stadium:
"We want to go there
and feel very proud of the facility. We do not want to go with
our cloaks over our heads embarrassed because of the quality of
the facility."[405]
The Secretary of State said that "feasibility
work on the design is well-advanced" and looked forward to
the construction of a "high quality stadium".[406]
140. Fourth, there are vital issues to be resolved
relating to transport and infrastructure at Picketts Lock. Whereas
a decision to stage athletics at Wembley would have enabled the
sport to benefit from investment funded by football, the public
sector and the private sector to ensure effective transport links
and appropriate surroundings for the National Stadium, an entirely
new funding package is required to make the Picketts Lock option
viable. The costs of off-site improvements are excluded from the
provisional budget.[407]
It is acknowledged by Enfield Council that existing transport
links are "relatively poor" and 90 per cent of visitors
to the current leisure complex come by car.[408]
The scale of the likely demand is indicated by the fact that nearly
half a million people attended the Seville World Athletics Championships
in 1999. It is envisaged that it will be necessary to upgrade
the railway line and open a new railway station at Picketts Lock.
Funding for these improvements is still being sought.[409]
Lee Valley Regional Park Authority considered it "far too
early to judge what these capital cost implications might be".[410]
141. One of the lessons that we draw from the Wembley
National Stadium saga is that infrastructure needs and their funding
must be considered at a very early stage of a project of this
nature. It is all very well to hope that Stadium development will
serve as a "catalyst" for infrastructure development,
as it should at Wembley, but firm guarantees are needed.[411]
If a new railway station is indeed required, the transport challenge
at Picketts Lock is arguably greater in some ways than that at
Wembley. We do not agree that it is "far too early"
to judge the cost implications.[412]
We consider it essential that one of the crucial lessons of
the Wembley National Stadium project is learnt and that funding
for essential improvements in transport infrastructure at Picketts
Lock is in place at an early stage in the development of the project.
142. Fifth, there are risks associated with the tight
timetable for the Picketts Lock Stadium. Demolition of the leisure
complex is expected to take place in 2002 with the Stadium construction
beginning in 2003 and due for completion by the end of 2004.[413]
The initial feasibility study indicated that "the Stadium
can be built in time for the 2005 World Athletics Championships
if key dates are met".[414]
In November 2000, Sport England suggested that a planning application
"needs to be submitted" by the end of March 2001.[415]
It is now expected that the application will be submitted by the
end of May 2001.[416]
The planning process may not be straightforward because the Stadium
is a proposed development on land designated as Green Belt and,
notwithstanding its support for the project, Enfield Council is
committed to undertaking its statutory planning role impartially
and rigorously.[417]
Although Lee Valley Regional Park Authority thought that the Stadium
would be ready "comfortably before" the 2005 Championships,
the timetable appears to be essentially the same as that for Wembley
National Stadium, which, it has been decided, cannot stage the
event because of the risks and possible costs associated with
such a tight timetable.[418]
143. Sixth, there remain question marks over the
long-term viability of the Picketts Lock Stadium. It is intended
that the capacity of the Stadium will be reduced to 20,000 after
the Championships, but in this country smaller athletics stadia
than that are rarely full and it is accepted that the Stadium
will run at a loss.[419]
The running cost subsidy required is expected to be nearly £1
million a year.[420]
Some of these costs will be paid for by Lee Valley Regional Park
Authority and Enfield Council, but a commitment from the London
Marathon Charitable Trust that remains to be finalised is "crucial".[421]
The Secretary of State thought that arrangements for revenue-funding
for the Stadium were "coming fully into place", but
both the Council and the Charitable Trust placed emphasis on community
use as the rationale for subsidy while the key rationale for the
Stadium is as a venue for international events. It also remains
to be determined who will bear the risk if forecasts of the subsidy
required prove over-optimistic.[422]
144. Finally, it is likely that the development of
the new Stadium at Picketts Lock will have an impact on the broader
ecology of athletics venue provision across the United Kingdom.
The likelihood that the Stadium would represent a centripetal
force dragging events away from regional stadia was a concern
of Gateshead Council and Sheffield City Council.[423]
Major events in London will be transferred from Crystal Palace,
although the future of the Crystal Palace complex as a sports
venue now seems more secure than it did some months ago.[424]
UK Athletics said that it remained committed to ensuring a spread
of events across the United Kingdom, but Sport England confirmed
that the potential impact of Picketts Lock on the viability of
other venues would be a factor in its decision on the funding
of Picketts Lock.[425]
145. In February of this year, the Secretary of State
told us that he was encouraged by what he saw as "a decision
which Sport England themselves took to have an in principle allocation
of £60 million in mind for the Picketts Lock Stadium".[426]
In the carefully-worded letter to the Committee dated 27 March
signed by the Secretary of State and Mr Brooking one sentence
appears to confirm that statement made by the Secretary of State
in February of this year, when it states:
"In our evidence to
the Committee, we were clear that Sport England have allocated
within their budget up to £60 million (£40 million allocation
and £20 million to be paid to Sport England by the Football
Association) to the Lee Valley National Athletics Centre subject
to a satisfactory application coming forward for substantive funding".[427]
Yet, in the very next sentence, that apparent confirmation
is diluted with the statement:
"Sport England is not
able to make a formal commitment to funding a project which has
yet to make a full application and this will remain the position
until such an application comes forward".[428]
However, even this dilution is at odds with what
Mr Brooking said on 22 March, namely:
"We have long made it
clear that no such money has yet been committed to the project
... We have made this clear at every possible opportunity, and
it is almost exactly a year since I wrote to the Secretary of
State (on 23 March 2000) to express my concern at statements which
suggested, unconditionally, that we had £60 million to devote
to an athletics facility."[429]
Previously, in his oral evidence during this inquiry,
the Secretary of State stood by his earlier contention, referring
to the minutes of meetings of the Sport England Lottery Panel
and the Council of Sport England in support of his view.[430]
It is a parliamentary convention that, when documents are cited
by Ministers in the House, those documents are made available
to Members of the House.[431]
Accordingly, we requested a copy of those minutes and the Secretary
of State furnished us with them. Although one small reference
in those minutes might appear to justify the Secretary of State's
oral evidence, broader reading of those minutes shows continuing
concern within Sport England about any allocation to Picketts
Lock.[432]
146. The Secretary of State has endorsed the arm's
length principle and accepted that the final decision on a Lottery
grant for Picketts Lock is for Sport England alone, while expressing
the hope that Sport England also takes account of the importance
of the 2005 event and of the legacy for athletics.[433]
He nevertheless accepted that Sport England had a "legal
duty" to examine the bid carefully on its merits.[434]
147. Sport England has confirmed on more than one
occasion that any application for funding will have to be considered
on its merits and in accordance with Sport England's Lottery Fund's
usual criteria relating to "eligibility, viability, value
for money and financial need".[435]
Sport England has also endorsed our previous comments that design
quality and the issue of equity in relation to venues across the
country should be factors in this particular decision.[436]
In oral evidence, Sport England asserted its confidence in its
own independence in taking the decision.[437]
148. The Secretary of State agreed that there was
"further work to be done" on the Stadium, but did not
see this as unusual at the current stage of the project and he
said that he was "absolutely confident that we will be able
to ensure a good, world-class athletics facility at Picketts Lock".[438]
He reaffirmed his conviction of the value of a world-class dedicated
facility for athletics at Picketts Lock providing a long-term
legacy of real benefit for athletics and the country.[439]
We have no doubt that a viable new national stadium for athletics
would represent an important addition to the elite sporting facilities
of this country. We hope that the Secretary of State's confidence
will prove justified. However, there are important issues that
remain to be resolved with regard to the Picketts Lock Stadium
project. Satisfactory solutions to the problems of underwriting,
cost control, risk management, timetable guarantees and long-term
viability must be firmly in place before Lottery funding is granted.
Sport England must judge the project by its usual criteria for
capital projects and must also bear in mind the need to consider
both the issues relating to the 2005 World Athletics Championships
and the distinct and strong case for a National Stadium for Athletics.
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