Select Committee on Culture, Media and Sport Appendices to the Minutes of Evidence

Annex 7

Letter, 13 December 1999, from the Chief Executive and Accounting Officer, Sport England to the Permanent Secretary and Accounting Officer, DCMS


  I am writing to express my concern and to seek discussion about a number of issues in connection with the English National Stadium project. In particular, DCMS have asked us to assist in their overview of the development process for this project. Our report is being supplied to Philippa Drew this afternoon, but in the light of the many meetings and exchanges between DCMS's Ministers and officials and the English Sports Council over the course of the project, I believe it appropriate to summarise some of my key concerns about the current position, and the implications it has for the English Sports Council's position as Lottery Fund Distributor.

  I do not wish to repeat what is well known to the Department, and indeed the background to the project as set out in detail in the report to be sent. Nevertheless, there are a number of important facts which need to be taken into account:

    —  the English National Stadium has its origins in 1994 when the proposal was to develop a stadium for three sports (athletics, football and rugby league), without unacceptable compromise to any of the sports, which was viable in the long term and within a project structure which complied with the Lottery Act requirement. This, and not a project based on football alone, was the basis of the series of applications from many cities. It remains our objective, which we continue to believe is achievable;

    —  during the last five years, the progress of the project has been fully aired both publicly and with the Department. We believe we have worked hard to avoid "unacceptable compromises". What has been achieved is a balance between the legitimate requirements of football (by far the largest event holder and funder), and those of athletics in track and field and Olympic mode. Both have consistently indicated that the only potential use of the stadium is for bid events of which there are likely to be only two and for which there is no certainty that a bid will be successful (and in the case of Olympics, if indeed made);

    —  in addition, whilst the Financial Directions as originally drafted were clearly inappropriate for major projects of this type, we have had to balance the justifiable commercial concerns of private funding with proper protection of public funding in order to secure the best use of Lottery money. As you and Treasury Solicitors are aware this was achieved by our joint efforts and we are confident of our compliance with the Financial Directions. We were extremely grateful to the Department for its efforts in this regard;

    —  finally, we now have a binding contract with the owners of Wembley which requires them to fulfil certain obligations in relation to all three sports and does not permit voluntary repayment of the Lottery grant. We believe that these obligations remain capable of being fulfilled both technically and operationally, in the manner agreed by all parties on signing and subsequently supported by all, including the Department, in July of this year. In particular, the Olympic capability (in fact between 65,000 and 80,000) is capable of fulfilment. 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.

  As I have said, it is clear that the project does not allow for a permanent athletics facility, and that there have been compromises. These have been known for some time. They are not unreasonable and especially so in a project where the key user is contributing (through its events and third party funding) almost 75 per cent of the overall costs of acquiring the site and constructing the new stadium. My concern is that it would rather have been unreasonable, if not unlawful, to have established a permanent athletic facility in the first place when no specific demand was in place. It would be equally so now fundamentally to change or cancel this project. Indeed such actions (in the context of the process to date) could lay both the English Sports Council and the Department open to criticism and challenge and require the whole process to begin again. This is particularly so in the context of the legislative framework of the Act, which requires the Council to take the relevant decisions. We have done so within a context of close consultation with the Department.

  I am concerned about these issues and would welcome the opportunity to discuss them with you. I believe that the proper process has been followed throughout and am happy to review this with you. With the current uncertainly, I believe that there has to be a risk that the project will not progress (eg. for lack of confidence of third party funders). If this means that the project ceases to be viable, we will be left in the difficult position of having to consider seeking repayment of grant in circumstances not caused by the Applicant.

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