APPENDIX 19
Further supplementary Memorandum submitted
by Sport England
1. Sport England
has been responsible for assessing the Lottery application for
the Lee Valley National Athletics Centre at Picketts Lock. Can
we see the exchanges of correspondence between the organisation
and DCMS concerning the viability of the project as mentioned
in evidence?
2. The former Secretary
of State was consistently confident about the prospects for Picketts
Lock and the 2005 WAC as you have quoted in your evidence. To
what extent did this reassure you about the Lottery funds you
were committing to the development phase of the project?
The following evidence demonstrates that:
— Sport England consistently advised
Ministers and officials at the Department for Culture, Media and
Sport that there was considerable doubt about the viability of
the project being proposed at Picketts Lock from the outset.
— Sport England made it very clear
to both the Government and the applicants (UKA and LVRPA) that
lottery funding for Picketts Lock would have to meet our standard
criteria including viability, value for money and sporting legacy.
Despite being under considerable pressure to fund for the project,
Sport England consistently and objectively applied the same criteria
to this application as it does to every other lottery application.
— Sport England was constantly reassured
by the previous Secretary of State and Minister for Sport that
the DCMS were strong supporters of the project and that they would
do all they could to address the issues of viability. This of
course informed our decision-making process and gave us confidence
that it was sensible to proceed with the project. We took a prudent
decision to allocate a small amount of feasibility funding to
the Lee Valley project to assist in assessing its longer-term
viability.
More specific evidence is set out in the chronology
and annexes that follow:
On 15 and 24 March 2000, the Secretary of State
chaired meetings at the DCMS attended by UK Athletics, Sport England
and other key parties to consider an alternative London site to
Wembley at which international athletics and the World Athletics
Championships could be staged. Sport England had facilitated the
assessment work of potential sites in London.
In these meetings, Sport England made it clear
that the cost of an athletics stadium of the standard required
for hosting the World Athletics Championships was likely to be
in excess of £100 million. The Secretary of State had already
acknowledged that the maximum support that Sport England could
provide for this project was £60 million.
Our assessment report that was presented to
and discussed at the meetings of 15 and 24 March had drawn the
following conclusions:
— There was a lack of certainty about
the project being deliverable at any of the sites (including Picketts
Lock), the key issues being budget, quality, programme and planning;
— Preliminary cost assessments suggested
that the aspirations of UK Athletics were unlikely to be achieved
within the projected budget available (£60 million lottery
funding)—the costs were assessed as likely to be in excess
of £100 million;
— There was a substantial funding requirement
that needed to be addressed at an early stage;
— The economic viability of the project
was questionable, given the event profile and other potential
uses for the stadium.
A copy of the paper presented to the meeting
chaired by the Secretary of State on 24 March 2000 is included
with this submission.
On 2 October 2000, the Minister for Sport chaired
a meeting of the Lee Valley Forum. At this meeting Ian Fytche,
Head of Major Projects at Sport England expressed continuing concern
about the uncertainty facing the project, namely the capital funding
gap, the level of planning permission still required, the revenue
deficit, the project delivery vehicle, and transport improvements
required.
On 2 November 2000 Sport England wrote to the
Secretary of State raising our concerns at the funding problems
facing Picketts Lock. Our reasons were twofold:
1. We were shortly expecting to conclude
negotiations with WNSL confirming the voluntary return of £20
million in return for dropping their obligation to stage athletics.
We wanted to confirm that the Secretary of State wished us to
formally preclude the option of athletics at Wembley when we still
had to resolve doubts about the funding and planning issues at
Picketts Lock. Len Hatton, Chairman of the 2005 WAC organising
committee had expressly stated his concern that we should not
remove athletics from Wembley until the future of Picketts Lock
was clearer.
2. We also advised the Secretary of State
that the Council was shortly to consider an application for feasibility
funding for Picketts Lock (on 6 November 2000). Before agreeing
to commit our lottery funds, the Council thought it useful to
secure some clarification of the additional funds that might be
available for the project from local and/or national Government
to address the funding shortfall.
A copy of this letter is attached.
On 3 November 2000, the Secretary of State wrote
to Trevor Brooking ahead of the Council's consideration on 6 November
of the LVRPA application for lottery funding for feasibility studies.
He wrote "the Government are firmly committed to the success
of the Lee Valley Stadium project . . . At this stage of the project's
development, there is, of course, a lot of further work needed,
particularly in identifying sources of funding. But I wanted you
to know that we, for our part, will do all we can to support the
Lee Valley Partnership in identifying funding sources which will
help bridge the funding gap." A copy of his letter is attached.
On 13 November 2000, at a Lee Valley Forum meeting,
the Minister for Sport Kate Hoey publicly addressed the project's
capital funding gap. She was recorded in the minutes stating that
it was "vital the design team were aware the project had
a capital deficit and took account of this."
On 14 December 2000, the Secretary of State
wrote to the major partners in the Lee Valley project, including
Sport England, stating "I just wanted to confirm that the
Government are determined to put in place the best possible facilities
for the 2005 World Athletics Championships and that we believe
that the Lee Valley stadium offers the best potential to bring
this about." A copy of this letter is attached.
On 12 January 2001, the Secretary of State wrote
to Trevor Brooking addressing the Council's concern as to whether
it ought to continue funding the Picketts Lock feasibility studies
while a review of the Wembley option was being undertaken. The
Council was concerned not to spend further lottery funding on
Picketts Lock if the review by Sir Rodney Walker was to recommend
the return of athletics to Wembley. The Secretary of State wrote
that it was in his view "vital that momentum is maintained
on the Lee Valley stadium project." A copy of this letter
is attached.
On 16 January 2001 at a Lee Valley Forum meeting,
the Chief Executive of the Lee Valley Regional Park Authority
informed the Secretary of State that substantial capital and revenue
funding gaps still applied to the project.
On 26 January 2001, the Secretary of State again
wrote to Trevor Brooking, "I believe it is now time to shift
up a gear both in progressing the project and in ensuring that
clear and positive messages are given. Sport England will have
a key role and I know you will ensure that your officers who are
working on the project give it the priority and energy which will
be essential if it is to be delivered on time . . . I should be
grateful if you would continue to take a close personal interest
in the project and keep us informed of its progress and any issues
or opportunities where we might be able to help. Perhaps we can
touch on this when we meet to discuss the Sport England Funding
Agreement next month." A copy of this letter is attached.
On 21 March 2001, the Secretary of State told
the Select Committee in response to a question from David Faber
on the funding of Picketts Lock that "I have assured David
Moorcroft, as indeed everyone involved in Picketts Lock, that
Government will be doing everything it possibly legitimately can
to ensure that this is going to be a success". He also reiterated
to the Committee that "I am, as I indicated earlier on, absolutely
confident that we will be able to ensure a good, world class athletics
facility at Picketts Lock. That remains my belief."
On 22 March 2001, the Secretary of State issued
the following statement to the press regarding the Lee Valley
National Athletics Centre designs: "The stadium is the best
thing to happen to athletics in the UK for a generation. The National
Athletics facility will provide a fitting venue for the 2005 Championships
and a wonderful legacy for the sport."
On 12 April 2001, as evidence submitted by the
LVRPA reveals, the DCMS wrote to the LVRPA stating "we are
currently considering a number of different options for resolving
the capital funding gap and on the question of who ultimately
stands behind the construction of the new stadium. There is no
specific progress to report at this stage, but Ministers are optimistic
that current discussions taking place will bear fruit and that
there will be some development to report before the end of this
month."
On 2 May 2001, the Secretary of State made the
following statement in a debate in the House of Commons on Wembley
Stadium "The 2005 world athletics championships have been
bid for and won by London, and we must ensure that we provide
a high-quality stadium for that event. I am proud that we will
have a purpose-built, dedicated athletics facility for those championships.
One of the reasons why we were so successful in winning IAAF approval
for the proposal in Paris last year was the fact that that facility
would be designed and built specifically for athletics. We want
to stick to that."
3. The costs of the development at Picketts
Lock were known to be in the order of £90-£120 million
from an early stage. Why was the Lottery application only for
£65.3 million? Is it not part of your role to advise applicants
on a realistic bid?
Sport England has always made it clear that
the maximum allocation it could make available to the development
at Picketts Lock from its Lottery Fund was £60 million (including
the £20 million to be returned by the FA from the Wembley
project). A further £7 million was subsequently allocated
towards the cost of an English Institute of Sport performance
centre on the site that would have included indoor facilities
for athletics.
We have also earmarked up to £15 million
towards the revenue costs of staging a World Athletics Championships
in England.
The Secretary of State informed the Select Committee
on 1 February 2000 that the following lottery funds might be available
"what is effectively available for the support of athletics
is the £20 million coming back from Wembley through the Football
Association; and up to £40 million, which will not now be
required, for the creation of the platform and the warm-up facilities
at Wembley."
As you will note from our previous evidence,
we consistently advised the Government, UK Athletics and the LVRPA
that the project they proposed had an identifiable funding gap.
This was discussed in the meetings that took place at the DCMS
on 15 and 24 March 2000 when UK Athletics and the Government decided
to proceed with selecting a new site for an athletics stadium
in London.
The evidence submitted to the Select Committee
by the LVRPA demonstrates that they were fully aware there was
a capital shortfall between our funding commitment and the total
amount they needed. The LVRPA constantly sought to raise the issue
and how it would be addressed with Government.
On 7 September 2000, Ian Fytche of Sport England
wrote to the LVRPA confirming the award of feasibility funding
to develop the project and advising the applicant that Sport England's
Council was mindful that there was a considerable funding gap.
"Please note that this award is part of the overall total
budget available for the project (of up to £60 million)".
The total available for sport from our Lottery
Fund for sport has fallen from a high of £300 million to
an anticipated £175 million next year. It has always been
our intention that 75 per cent of this is made available for community
sport initiatives. We are currently over-stretched in funding
all the community sports we would like to support. It would just
not have been possible for us to commit more than half our fund
for one year to supporting the proposals at Picketts Lock given
all the competing and worthwhile demands for our funding.
4. Did Patrick Carter's review of the Lee
Valley Stadium tell you anything about Picketts Lock that you
did not know already?— The Government's reply
to this Committee's last report on the topic states that "Patrick
Carter's conclusions on the risks to the likely delivery of the
necessary transport infrastructure improvements in time for the
2005 Championships was one of the principal reasons why the Government
and Sport England decided that the project was unsustainable"
(p7), Is this a fair statement of Sport England's position?
As our previous evidence demonstrates, the lottery
application submitted in May 2001 for £65.3 million towards
a National Athletics Centre at Picketts Lock failed to address
many of Sport England's policy and financial directions—including
eligibility, viability, sustainability, value for money, and financial
need.
Sport England subsequently agreed with the new
Secretary of State that Patrick Carter should be appointed to
undertake a review of Picketts Lock to see if these issues and
other wider concerns associated with the project could be addressed.
Patrick Carter's report subsequently endorsed
Sport England's strong reservations as to the viability of the
project—which included the capital and revenue funding,
transport and planning issues covered in our earlier report. Patrick
Carter concluded that Picketts Lock could not demonstrate clear
value for money when set against the many other demands on the
Sport England Lottery Fund.
5. What formal role do Ministers have in
deciding the sustainability of applications for Lottery funds?
Ministers have no formal role in assessing lottery
applications. This is a role undertaken by the Council and Lottery
Panel of Sport England.
6. When will you publish the full Carter
report?
Sport England published the relevant extracts
of the Carter report on its Website on the 4 October 2001. This
was the same day that Tessa Jowell announced her decision that
the Government would not be able to continue offering its support
to the Picketts Lock proposals.
The reason we did not publish the evidence on
the alternative options is that it contains commercially sensitive
information relating to the potential assessment work we may have
to undertake of future lottery applications.
We understand the Committee has, under terms
of confidentiality, a full copy of the Carter report. We will
keep under review whether in time it might be appropriate to publish
the rest of the report.
7. Patrick Carter told the Committee on 16
October that in reviewing the Lee Valley Stadium and the 2005
WAC he was "not looking at whether a platform worked at Wembley
because the time for that has passed" and "the Wembley
option was not there"(Q112). Can you confirm that Mr Carter
did not assess Wembley as an alternative view for the 2005 WCA
in the course of the Lee Valley Stadium review?
In his report on Picketts Lock, Patrick Carter
reviewed Wembley and other options in London before concluding
that he needed to look outside of London as well.
8. Have you made any kind of allotment of
funds for a 2005 WAC in Sheffield—in principle—in
outline?
—Has the Government asked you to fund improvements
to the Don Valley Stadium in Sheffield? If so, is this appropriate?
Sport England's Council has continued to allocate
a budget for staging a World Athletics Championships in 2005.
We cannot and have not guaranteed this funding, as the Committee
knows and supports, it is dependent on a lottery application meeting
our standard criteria which includes viability, value for money
and sporting legacy.
£15 million has also been set aside for
the revenue costs of staging the Championships. Any further costs
for staging the games would have to be met by either Sheffield
City Council or the Government.
When the Government became aware that it was
unlikely to be able to support Picketts Lock as a viable option,
it looked at alternative sites and was advised in this process
by Sport England. It was the view of Government and Sport England
that Sheffield has many advantages. It already has a good infrastructure
and transport links; there are few planning problems and the city
has experience in staging major events. As Carter reported it
is likely to be much better value to stage the WAC at Sheffield
than PL, largely as a result of the project not being a "new
build" development.
9. Given the IAAF's preference for "major
world cities", and the UK's track record with these particular
games, are you confident that Lottery funds for feasibility work
or a bid related to Sheffield would be money well spent?
As the Committee is aware, it is not within
out remit to advise directly on whether we should bid. The actual
decision to bid is one for UK Athletics as members of the IAAF.
They will of course require the backing of the Government. Sport
England's role is potentially to provide lottery funding for the
facilities that would be required to stage the games and for the
costs of the Championships.
UK Athletics will decide whether to bid based
on their consultations with the Government and Sport England.
We will advise on the support that we are able to provide to the
provision of facilities for a Championships, and the lasting legacy
they will provide. The IAAF meets at the end of November to decide
on whether to re-open the bidding, all indications are that it
will. If in the coming weeks, UK Athletics does choose to make
a bid, we will work with them to advise on how a bid can be taken
forward.
Any lottery funding provided would of course
have to meet out standard criteria including viability, value
for money and legacy.
10. Can you remind the Committee how the
position was reached that £20 million was to be paid by the
Football Association and/or WNSL to Sport England in lieu of provision
for athletics at Wembley?
The £20 million payment was negotiated
outside of the Wembley Lottery Funding Agreement, without any
Sport England involvement, by the previous Secretary of State
and the Football Association.
The following chronology provides a background
to this issue and demonstrates that Sport England has taken every
possible step since then to secure the return of this £20
million.
This has so far not proved possible and we are
currently seeking legal advice on the matter.
THE ENGLISH
NATIONAL STADIUM
LOTTERY FUNDING
AGREEMENT—THREE
SPORTS FOR
£120 MILLION
Sport England entered into a Lottery Funding
Agreement (LFA) with the Football Association (FA) and WNSL on
12 January 1999. This covered our award of £120 million toward
the development of an English National Stadium at Wembley.
The LFA is our legal mechanism for safeguarding
grants and ensures appropriate accountability for lottery funds.
Failure to comply with its terms and conditions provides Sport
England with the right to demand repayment. In this case the LFA
(a copy of which has previously been submitted to the Committee)
stated that WNSL would design and build a world class national
stadium for three sports. The LFA required that WNSL meet the
following criteria;
— The capability to meet International
Amateur Athletic Federation requirements for athletics;
— A minimum seating capacity of 80,000
seats for football and rugby league, and 65,000 seats for athletics;
— The stadium must be made available
for the World Athletics Championships and the Olympics on the
terms on which the event is offered.
— Design standards and sight lines
at least comparable to other major national stadia such as Stadium
Australia (Sydney) and the Stade de France.
THE WEMBLEY
DESIGN
In July 1999, WNSL announced their detailed
design plans for the new Wembley project. These plans were widely
acclaimed and endorsed by all three of the sports who had committed
their events to the project—the Football Association, Rugby
Football League and UK Athletics—together with other key
parties including the then Secretary of State Chris Smith and
the British Olympic Association.
The Select Committee has since then twice heard
oral evidence from Rod Sheard, lead architect for WNSL, on the
design plans for Wembley which included the platform option for
converting the stadium to athletics use. We believe the Committee
shares our view that this design did then, and still does, represent
the best value approach to building a national stadium that meets
high standards for each of athletics, football and rugby.
We also noted with interest that this design
is now likely to be used by some of the cities bidding for the
Olympics in 2012 and that the IOC have endorsed the design concept
as a welcome development in addressing how major stadia can secure
a lasting and viable legacy beyond the staging of an Olympic Games.
ATHLETICS WITHDRAWN
FROM WEMBLEY
AND THE
REPAYMENT OF
£20 MILLION
On 22 December 1999, the then Secretary of State
for Culture, Media and Sport, Chris Smith, decided that the National
Stadium project at Wembley was no longer suitable for athletics,
based primarily upon his assessment of a report prepared in just
two weeks by the architects Ellerbe Becket.
This report was subsequently found to be fundamentally
flawed in its main recommendations. It is our regret that neither
ourselves nor WNSL were given sufficient time to discuss this
report with the Secretary of State before he made his formal announcement
to Parliament that he was proposing withdrawing athletics from
Wembley.
On 22 December 1999, the Secretary of State
announced that he had decided that athletics should not be staged
at Wembley, and that, in return for a relaxation of their contractual
requirements, he had agreed with the Football Association that
a payment of £20 million be made to Sport England.
It should be noted that despite Sport England
being a party to the LFA, the Secretary of State did not involve
Sport England in any of his meetings with the Football Association
to discuss the £20 million payment. A unilateral and non-binding
renegotiation of the LFA had taken place, sealed at a meeting
between Ken Bates and Chris Smith in late December 1999.
On 10 January 2000, 18 days after the Secretary
of State had concluded his deal with Ken Bates, the Department
for Culture, Media and Sport wrote to Sport England providing
formal notification of the agreement. This letter, which we attach
with our submission, states "You ask whether we have any
information on the outcome of discussions with the Football Association.
As you will be aware, the FA has offered to repay some of the
grant they have received in return for removing the requirement
to stage athletics at the national stadium. Details of the offer
are set out in the attached letter from the Secretary of State
to Ken Bates. It is of course for you, to flesh out the agreement,
and to improve its terms if possible".
We were subsequently surprised to learn in an
evidence session of this Committee that the Secretary of State
had initially sought that the repayment be £40 million and
that this had been reduced to £20 million as a result of
FA "haggling".
Sport England had not been asked to contribute
to or be involved in any of the meetings or discussions which
subsequently led to a request that we try and renegotiate an LFA.
THE RETURN
OF THE
£20 MILLION
As we have indicated, once the Secretary had
met with Ken Bates, he passed over to Sport England the responsibility
to secure the actual return of the £20 million. He 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.
This was not a straightforward task. As the
Chief Executive of Sport England indicated in oral evidence to
the Committee on 27 January 2000, there appeared to be no contractual
basis for WNSL having to repay £20 million to Sport England
on the basis that the stadium was not suitable for athletics.
The Secretary of State had in effect agreed that WNSL would make
a voluntary repayment that has no legal basis
Sport England was extremely concerned about
this scenario. Indeed when we had become aware from press reports
that a deal of this nature was being considered, we had written
to the Permanent Secretary at the DCMS on 13 December 1999 expressing
our reservations. The Chief Executive of Sport England wrote "it
is not open to ourselves unilaterally to change the scope of the
project, and in the context of the current legislative framework.
I am concerned about the apparent attempts by HM Government itself".
Despite our advice, the Secretary of State went ahead and did
just that. A copy of this letter is attached.
SEEKING THE
RETURN OF
THE £20 MILLION.
Upon learning of the agreement, Sport England
immediately entered into discussions with the FA to secure the
return of the money. However we found it hard to clarify their
position. To add to our difficulty in securing the return of this
voluntary payment was the fact that there then developed a dispute
between the FA and the Secretary of State as to the exact nature
of the agreement they had come to.
As the attached letters demonstrate, we wrote
to the Football Association on five occasions between January
and June 2000 seeking their confirmation that they intended to
honour the voluntary repayment they had agreed with the Secretary
of State. It subsequently transpired that the reason we could
not secure any detailed agreement with them is that they were
still negotiating with the Secretary of State as to the exact
nature of their agreement.
It was finally brought to our attention on 2
August 2001 that the Secretary of State had received a further
letter from the Chairman of the Football Association on 30 January
2001 setting out the deal the FA believed it had agreed with him.
This was a different interpretation to that of the Secretary of
State in his letter of 7 January 2000 involving the relaxation
of commercial rights. The confusion was added to when the Secretary
of State wrote again to the FA on 9 February 2000 appearing to
agree with the FA's interpretation of the agreement, rather than
his earlier views. Copies of this correspondence are enclosed.
Again, Sport England had not been privy to any
of these letters or discussions as they took place but had been
expected to conclude the legal documentation.
On 30 June 2000, Sport England again wrote to
the Football Association seeking to clarify the exact agreement
that the two parties had come to. We have attached a copy of this
letter.
We again wrote on similar terms to the DCMS
on 4 September setting out the problem that we had in interpreting
the exact nature of the agreement between Mr Bates and the Secretary
of State. To try and move things forward, we set out three different
options for consideration. This letter is attached with our evidence.
The issue was only finally resolved on 13 September
2000 when a meeting took place at DCMS at which all parties were
for the first time present, ourselves, the Football Association
and DCMS. The next day we wrote to the Football Association setting
out the terms of the agreement that all parties were now content
with. This letter is attached.
On 29 September 2000, the FA/WNSL submitted
an application to Sport England to amend the terms of the initial
Lottery Funding Agreement. The key amendments to the LFA were
to be:
— the obligation on the new Wembley
stadium to retain the design capability for athletics would be
removed.
— £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;
At its November and December 2000 Council meetings,
Sport England considered the FA/WNSL application requesting an
amendment to the LFA that would see the removal of athletics from
Wembley.
Before so doing, the Council had to consult
with all the interested parties to the project to confirm that
they were happy to see athletics removed, this included UK Athletics,
the BOA, the WAC organising committee and the DCMS. This consultation
process took a few weeks. As our previous evidence demonstrates,
there was not unanimous agreement to this in the first place.
Once we had confirmed that all parties agreed to the changes proposed
by WNSL, we were able to proceed.
The Council agreed the WNSL application on 4
December 2000. In doing so, they concluded that the main issues
behind the application 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.
Sport England wrote to WNSL/FA on 8 December
2000 confirming that the Council had accepted the application
to amend the LFA, and stating that it hoped this could soon be
put into legal documentary form. We have attached a copy of this
letter.
Just as this agreement was ready to be signed,
the FA announced that the syndication of the loan for Wembley
had failed. Subsequently a new Chairman, Sir Rodney Walker, was
appointed at WNSL. He immediately introduced a review of the project
to consider whether Wembley could in fact satisfactorily accommodate
athletics. WNSL did not want to sign an agreement to remove athletics
while they were assessing its feasibility. This meant that Sport
England still had no legal mechanism to expedite the return of
the £20 million, as WNSL was not prepared to sign the amendment
to the LFA agreed by the Council and WNSL on 4 December 2000.
Sir Rodney announced the results of his review
on 18 January 2001. These were that while it was feasible to host
athletics at Wembley, he could not guarantee that the stadium
and its ancillary facilities would be ready in time to stage the
2005 WAC Championships.
He did not announce when WNSL intended to repay
the £20 million it had agreed with the Secretary of State
or when it would put a signature to the request it had made to
amend its LFA.
Sport England wrote to the Chairman of WNSL
three times in January seeking progress on this issue without
receiving any satisfactory conclusion. Copies of these letters
are attached.
Sport England then wrote to Adam Crozier on
the 26 February 2001 to seek clarification on how the FA/WNSL
was to proceed in meeting the amendment to the LFA and repaying
£20 million. Adam Crozier wrote back on the 2 March saying
"we are all aware that there is no obligation on the FA to
repay this, though it currently remains in the FA plan. This will
be discussed by the FA board in due course."
We continued to seek reassurance from the FA
and WNSL in February and March. Indeed we were heartened that
both the Chairman of WNSL and the Chairman of the Football Association
stated to this Committee in March 2001 that they recognised their
"moral" obligation to repay this £20 million, even
if there were no legal obligation. This was a view also reiterated
and supported by the Secretary of State, Chris Smith.
As the Committee will be aware, in April 2001
the FA announced that it did not feel it could continue with its
plans to finance the project in its existing form. As a result
the Government announced that Patrick Carter would be appointed
to review the Wembley project.
THE CARTER
REVIEW—PROTECTING
SPORT ENGLAND'S
FUNDS
The willingness of the FA/WNSL to pay £20
million to Sport England had been made clear during the negotiations
over the amendment of their Lottery Funding Agreement with Sport
England. Once the Carter review was announced we were keen to
ensure that the review did not in any way infringe on our ability
to protect lottery funds, both the full grant of £120 million
and the proposed repayment of £20 million.
We have attached with this submission copies
of letters we sent to the DCMS on 11 May 2001 and 15 June 2001
in which we made it clear we wanted the Department to ensure that
in conducting the Carter review they did not undertake any action
that might undermine our ability to protect the grant. We also
wanted to remind them of the commitment that the £20 million
would be repaid and that they should not come to a conclusion
that would lessen the likelihood of the Football Association still
making this payment.
Since the appointment of Patrick Carter and
then Tessa Jowell as the new Secretary of State, we have reminded
both of them in writing and in conversation of the expectation
of the Council and Panel that the commitment to repay the £20
million will be met. Attached with this submission is a copy of
the letter that was sent to the new Secretary of State on 30 August
2001. The Committee will note that in that letter we write "it
is likely that the review will re-confirm that project as the
national stadium for association football and rugby league. It
is important, therefore, that the agreement reached by the Government
and FA in December 1999 is retained, and that £20 million
is repaid to Sport England."
11. Can you clarify whether the £20
million payment from the Football Association and/or WNSL to Sport
England is predicated upon (a) the removal of the obligation to
host athletics events at Wembley (at cost); (b) the removal of
the potential to host athletics at a Wembley National Stadium;
or (c) some other formula?
The current terms of the proposed amendment
to the LFA that will lead to the return of the £20 million
to Sport England are set out in Sport England's letter to WNSL
of 8 December 2000.
This states that WNSL, on the basis of repaying
the £20 million, would no longer have to:
(a) hold athletics events at the stadium
on a "cost only" basis
(b) retain the design capability of the stadium
to accommodate athletics.
12. What does the Lottery Funding Agreement
(LFA) say about the provision of athletics at Wembley—does
it refer to the 2005 championships specifically?
The LFA does not refer specifically to the World
Athletics in 2005. Instead it states that WNSL must make the stadium
available, in athletics mode (to IAAF standards), on a "cost
only" basis to any World Athletics Championships or Olympic
Games that the UK might stage.
The advantage of this is that it was hoped we
might stage the World Athletic Championships perhaps three times
in a fifty-year lifetime of the stadium.
13. Given the delay in the project is there
not now the potential for Sport England to declare the Lottery
Funding Agreement unfulfilled and require WNSL to reapply (perhaps
for only £100 million) if a national stadium is given the
go ahead at Wembley in due course?
As Sport England stated in oral evidence on
23 October 2001, if the project fails to go ahead, Sport England
will take legal action to recover our grant. At present our Council
has considered it reasonable to await the outcome of the Government
review led by Carter into the project before making any final
decision.
14. Have Ministers always drawn the correct
line between involvement and interference in the history of the
National Stadium and the 2005 WCA?
Sport England welcomes Government involvement
in major sporting projects, in fact it is essential to their success.
A major event requires a joined-up and pro-active approach across
Government.
We have been grateful for the very positive
support the Government has given to the Commonwealth Games. Sport
England believes that in Manchester we have secured the right
balance in securing new facilities for the Games and providing
a lasting legacy for the communities in which they are based.
It is essential to solve major infrastructure
projects and clearly government has a role to play in this. We
would advise that we do not think it is appropriate that the Government,
against advice from Sport England or any other relevant body,
to interfere in a Lottery Funding Agreement agreed between two
other parties.
We welcome the review announced by Tessa Jowell
into major events that will be led by the Performance and Innovation
Unit. We hope that the review will take on the previous recommendations
this Committee has made on this issue, in particular its recommendation
in April 2001 that:
"the Major Events Steering Group of UK
Sport and the Government and Agencies Committee within Government
be abolished and that they both be replaced by a single decision-making
body within Government chaired by the Minister for Events and
with a membership including the Ministers responsible for sport
in the United Kingdom Government and in the devolved administrations".
We would also urge that the Government recognises
that if it wishes to support major sporting events in future,
it cannot expect the Sport England Lottery Fund to take on the
sole burden of funder. In light of falling lottery ticket sales
and increasing demands for Lottery Funds from the grass roots,
this really is imperative.
1 November 2001
| 
