Annex 26
Letter, 15 June 2001, from Sport England
to DCMS
ENGLISH NATIONAL STADIUM PROJECT
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.
|
