Annex 7
Letter, 13 December 1999, from the Chief
Executive and Accounting Officer, Sport England to the Permanent
Secretary and Accounting Officer, DCMS
ENGLISH NATIONAL STADIUM
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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