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

Annex 26

Letter, 15 June 2001, from Sport England to DCMS


  Following the announcement regarding a Government Review of the project, we have undertaken further work to ensure that our grant remains adequately protected, and to explore ways of facilitating the project.

  In view of reports that the new Secretary of State and the Minister will be reviewing matters in connection with the project over the weekend, I thought it might be helpful to update you on a number of matters. I hope this is helpful to them in their deliberations, and we would be very happy to meet with them at an early stage to brief them more fully on the issues involved, and the range of options that may come forward.

  Our prime concern remains the protection of the Lottery grant, and I would therefore reiterate my comments from previous letters regarding the need to ensure that the Review exercise does not cut across our obligations as a distributor of Lottery funds towards the project. As you know, we have suggested that the review should focus on Wembley in the first instance, and that arrangements for repayment of the grant would need to be concluded before other options can be considered. Whilst we have security over the project to protect the grant, the complexities of securing repayment should not be underestimated. I look forward to receiving the terms of reference, which I understand are due to be issued during the course of next week.

  We have had further discussions with WNSL and the FA regarding the potential options for the project, which range from the current scheme, to a reduced cost version, through to a complete redesign. The FA has reconfirmed its commitment to the development of the national stadium at Wembley, with a substantial contribution towards the project capital costs and annual operating costs.

  We have also asked our project monitoring team to review the potential options for the project, particularly in respect of the scope for reducing cost, together with the impact on planning, procurement, and programme. Whilst there is a need for more detailed work, some initial conclusions can now be drawn. These include the following:

    —  We believe there is considerable scope for reducing the cost of the project, whilst still retaining its original objectives and core business function as a national stadium. This would entail the removal of the hotel, offices, visitor attraction and other areas from the design. Initial estimates, based upon review of design, engineering, and procurement issues, suggest that there is a potential cost saving in excess of £100 million. We are undertaking further work to assess this in greater depth.

    —  In programming terms, the stadium could still be completed by December 2004, allowing for time for redesign, rescheduling works on site, any variations to planning, and assuming a start on site early in 2002.

    —  We are still assessing the impact of removing elements of the scheme on the business plan and should be able to make an assessment of the funding situation in the very near future. This will build in the impact of the proposed payment of £20 million in respect of the removal of athletics, which forms a critical part of the Picketts Lock project.

  In the meantime, we are continuing our assessment of the grant application for Picketts Lock, in order to present a report to the joint meeting of the Lottery Panel and the Council on 2 July. There was a very useful meeting on Wednesday with the applicants, attended by Niall McKenzie and Ian O'Neill. I am grateful for the input they were able to make. As you are aware, there are a number of fundamental issues regarding the viability of the project which remain outstanding, related to: project underwriting and commitments to funding (capital and revenue); the planning situation and its potentially serious impact on timetable and project cost; and finally, the underlying rationale for the project. On this point, we are meeting with UK Athletics again next week to discuss the balance between World Championship and legacy issues, and the current lack of commitment to the event profile. I understand Ian Fytche has arranged to meet with Niall again next week to discuss the key points as recommendations are being finalised for the Council.

  Finally, we would be happy to brief the Secretary of State and the Minister on both projects in more detail at an early stage. In the meantime, please do not hesitate to contact me if you wish to discuss any issues related to these projects.

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