For much of the time since the bid was won, it has been hard to know who is in charge. It took months to announce the chief executive of the Olympic Delivery Authority, when it could usefully have been done a day after the victory.
A 10-year-old student of politics would know a lot more about how this place works than Rowan Moore does, and the headline ought to be Rowan Moore, get a grip on the facts, but the fact remains that the article will now appear in the IOCs files. Rowan Moore is doing a disservice to the Olympics and to this nation. As Opposition Members have said, no one could have been more open than the Department, and I invite Rowan Moore to check his facts.
What concerns me more, however, is that when the Secretary of State asked the editor of the Evening Standard whether we could have the right to reply to the article just to put the record straightafter all, we are talking about a national programmeshe was denied that right. I say this more in sorrow than in anger, but that article, with its ill-informed commentary, will now be in the IOCs file, and we do not even have the right to reply to put the record straight. Broadly speaking, in the run-up to London winning the bid, editors and the press were very supportive
The press were very supportive, and we welcomed that. All I am saying to them is, if they want the information, they can come and get it, but will they please not put such ill-informed articles in newspapers and then try to argue, on the back of that, that the thing is likely to go wrong? As the hon. Member for Bath said, there will be constructive criticism, and that is absolutely rightwe can accept that.
Mr. Caborn: We will scrutinise this issuethat is what these debates are about. If the press want the information, they should please come and ask for it, and we will give it to them. I hope that the Evening Standard will give us the right of reply and thatMr. Moore will make sure that he gets his facts right in future.
Mr. Fraser: May I draw the Minister back to the debate? As I sat on the Back Bench, I noted that he was asked more than 37 questions, but he has spent the past three and a half minutes on what I would suggest is a rant about an issue that he should take up outsidethe Room. He should perhaps spend the next 13 to15 minutes answering our questions, which are totally relevant and which would give him the opportunity to put on the record his support for our comments and to let us know that the financial probity of the games is secure, rather than spending time on a rant against a newspaper.
Mr. Caborn: I totally reject that. I would not have had to come here to say what I did had the Evening Standard been reasonable about a national project and given us the right of reply. This is the only place where I can say that that was fundamentally wrong and that it will do a lot of damage to the British caseit is power without responsibility. If people write such things and know that they are fundamentally wrong, but then deny us the right of reply, the issue needs raising. However, I will leave it at that.
The EDAW consortium has been appointed to design the Olympic park and infrastructure. The relocation of high-voltage overhead power lines into tunnels underground is under way to deliver an essential improvement to the environment of the Olympic park. A charitable trust to support cultural and sporting initiatives associated with the games has been announced. That initiative is worth £35 million and will see the end of the Millennium Commission with the funding going to the trust. On 24 January, the Department for Culture, Media and Sport hosted a business summit, which was attended by more than300 business representatives and was massively oversubscribed. The summit set out the key challenges and opportunities facing business, including up-to-date information about procurement. That was followed up with a further business summit in the west midlandson 9 May, which was organised by the regional development agency, Advantage West Midlands, which is very proactive. On 30 January, the Olympic Delivery Authority announced updated plans for the Olympic park site. Camelots income target for raising lottery income for 2005-06 was met, and indeed exceeded by some £2 million.
The first Go for Gold scratchcard was launched on 28 July and sold faster than any other £1 scratchcard launched by Camelot since November 2002. A second edition was issued in September 2005. On 1 February 2006, a new £1 winter sports scratchcard, Win Gold, was also launched. During its recent visit, the International Olympic Committee expressed itself well pleased with the progress that is being made.
In 2003 the Government agreed a public sector funding package of £2.375 billion to deliver the Olympic venues and infrastructure and to secure the development of athletes. The package will be funded from the Olympic lottery, the sports lottery, other lotteries, the Greater London Authority and the London Development Agency. The bulk of the package£1.5 billionwill be met from the lottery. The Olympic lottery has already raised some£16 million. It is expected to raise a total of £96 million in 2006-07 and to deliver a total of £750 million by 2012. The sports lottery will deliver £340 million for elite athletes and associated sports infrastructure. The £200 million of Exchequer money that the Chancellor announced in the Budget is on top of that.
Other lottery funding of up to £410 million will come on stream from January 2009-10. The London Development Agency will deliver up to £250 million from 2008-09. The GLA has agreed to contribute up to £625 million from the London council tax precept. The funding that comes on stream this year accounts for around a quarter of the public sector funding package. I recognisethis was clearly spelled out during the London local electionsthat hon. Members are concerned about the impact of the precept on London council tax payers, particularly in west London. However, to put the financial impact in context, it is expected that average London home owners in band D properties will pay 38p a week, or a total of £20 a year. As hon. Members know, that formula has been used in many United Kingdom cities, including Manchester for the Commonwealth games and Sheffield for the World Student games. That is reasonable because those cities received considerable investment in their infrastructure. The formula has been tested, and given the massive benefits that the games will bring to the UK and particularly to London as a whole, we feel that it is justifiable to put that financial burden on London.
I recognise that hon. Members are concerned about the risk of increased gambling addictionthe hon. Member for Bath raised the matterresulting from the Olympic lottery. The Gambling Commission will be looking at the monday lottery, and if there is a move away from what Parliament intended, we will revisit the matter. We believe that the risk of problem gambling will be very low. The national lottery is not generally associated with problem gambling. Indeed, around70 per cent. of the adult population play the National Lottery, but spend relatively small amounts of money. The average weekly spend on the lottery was just over £2.84 in 2004-05. In 2004, only 3 per cent. of calls to GamCarethe organisation that looks into problem gambling issuesconcerned national lottery products. Olympic lottery games need to be approved by the National Lottery Commission, and the NLCs statutory duties include preventing excessive play. It would not license a game that it considered encouraged that.
The hon. Member for Faversham and Mid-Kent (Hugh Robertson) raised the issue of how cost increases would be addressed. We went round the world and looked at cities that had staged the games: Munich, Barcelona, Sydney and Moscow. We also looked at what Athens and Beijing were doing. The cities that we looked at, Sydney especially, were generous in giving us advice. As I have said before, two or three major themes emerged from that. One is that the first two years are crucial if people are to keep costs on track. What is needed is a company with the powers of compulsory purchase, which we have, and planning, and a robust budget.
It is also important to ensure that there will be a sustainable legacy. If there was any failure in Sydney, it related to the legacy. Sydney is spending £10 million a year servicing not debt but a main stadium that does not have a tenant. Another problem is that there are now two arenas in Sydney, although it wishes that there
was only one. The tennis went down to Melbourne, which now has a massively underused tennis park. The legacy is important in terms of both sports infrastructure and the cost of that. We have considered the issue carefully as we have gone through the process.
It also became apparent to us that there are three stages to an Olympics. One is winning the right to stage the games, and we put together a formidable team to do just that for 2012. The second stage is producing the infrastructure, which basically involves construction and which we are doing through the ODA. The third stage is to deliver the games, which is the role of LOCOG. That body is chaired by Seb, and Paul Deighton is the chief executive.
The overarching body is the Olympic board. There are three stakeholders: the Government, the Mayor and the British Olympic Association. The Olympic board provides a strategic overview. The Government have learned the lessons of Wembley and the dome. There will be no Government interference in the ODA other than to give clear instructions and to ensure that it carries out its duty within a budget that will be defined and negotiated with the ODA. The ODA board is skilled; indeed, it has expertise like no other board that we have put together. I am very confident that the chief executive, the chairman and indeed the entire board will carry out the project and will do so with transparency.
We are committed to tight control of the funds, but we have never shied away from the possibility that costs will increase. The Government have given assurances that they will act as ultimate financial guarantor should there be a shortfall between Olympic costs and revenues. The 2003 memorandum of understanding between the Government and the Mayor envisages how any cost increase would be managed. We have rehearsed this many times in Committee, but I repeat that the memorandum explains that, should the shortfall between Olympic costs and revenues exceed £2.075 billion, the Government would expect to discharge that responsibility in a sharing arrangement to be agreed as appropriate with the Mayor of London, and through seeking additional national lottery funding in amounts to be agreed at the time.
A number of hon. Members are suggesting that we place a cap on the amount of London council tax that can be drawn on to support the development of venues and infrastructure for the Olympic games. As we have rehearsed, we do not accept that proposal. Capping the share of one contributor would simply increase the amount required from others. That would not be consistent with the pressure that needs to be exerted to keep costs down. Nor does it seem reasonable that council tax payers in west London should not make a contribution to the cost of the games. London as a whole is a major beneficiary of the games, so it is only fair that council tax payers in London as a whole should bear an appropriate share of the costs.
Hon. Members will know that we are undertaking a review of costs, which includes building inflation. In the light of that review, we shall consider howany additional costs should be met within the terms of
the arrangements agreed. The cost review work embraces many strands, including security, venuesand infrastructure, reducing risk, contingencies and taxation. Maximising private investment is also important in the review. Any revised estimates will be reported only when they have been agreed and when the cost review has been completed.
The staging of the games is the responsibility of LOCOG, whose budget is now £2 billion, which takes into account inflation from 2004 through. The move from £1.4 billion to £2 billion is due to the costs of inflation over the period of the games.
Hugh Robertson: Wait a minute. Inflation over a six-year period cannot be 33 per cent. If the budget has gone up from £1.5 billion to £2 billion, that is a£500 million or 33 per cent. increase. Is the Minister really saying that he expects inflation to equal 33 per cent. over the relevant period? That would be far in excess of the Treasurys estimates.
Mr. Caborn: The advice that I have been given is that the reason for the move from £1.5 billion to £2 billion is the calculation on inflation. If the calculation is less, the figure will be less than £2 billion, but that is the calculation that has been made, and that is why the figure has moved from £1.5 billion to £2 billion. Ifthe hon. Gentleman wants, we can go back to that issue. I shall write to him.
Mr. Foster: For clarity, will the Minister confirm that he is saying that the operating costs of LOCOG to run the games are, on a real-cost basis, exactly the same now as when we first discussed them, and that the only difference is in which years base we are talking about?
Mr. Caborn: Yes, the advice that I have been given is that the reason for the move from £1.5 billion to the figure that I have given was the calculation on inflation. If that is wrong, up or down, we shall adjust the figure.
Hugh Robertson: One final problem: it seems extraordinary to me that that figure should not have been used in the first place, because presumably that calculation can be made. Will the Minister guarantee that the same problem will not occur with all the other budgets, and that they have been done at 2005 figures? Will the £2.375 billion, for example, need to be compounded by 33 per cent. as well?
Mr. Caborn: As I said, there has been a review on costs. The hon. Gentleman asked me about LOCOG and I gave him the answer on LOCOG. We are reviewing those costs. In 2004, the figures in the17 chapters of the candidate file were costed at 2004 figures. That is now under review. As the hon. Gentleman knows, before we won the bid on 6 July, we had to keep very firmly to those 17 chapters because we were making a bid. From November 2004 to 6 July 2005, we kept to that very religiously, as any change in cost would have been detrimental to our bid.
Since 6 July 2005, we have gone through the cost review to which I referred. The KPMG study will be built into the ODAs. It is looking at areas such as construction inflation as wellthe hon. Gentleman
said that that was 7 per cent., although I do not know whether that is true. These are exercises that we would expect to go through after making the bid. I have said clearly that once the cost review has been completed, we shall come back and report.
Hugh Robertson: I am confused. Thirty-three per cent. is a hell of a hit and considerably in advance of the Treasurys estimates. Inflation is running at about2 per cent.; if one compounds that over six years, there is no way that it comes to 33 per cent. Clearly, we are not going to make much further progress on the issue this afternoon. Will the Minister agree to write to all Members who have attended this debate to explain the situation? There is a disparity between 2 per cent. compounded over six years and 33 per cent.one does not need to be a banker to work that out. We need to nail the issue down.
Mr. Caborn: I was asked why the figure had moved from £1.5 billion to £2 billion. My answer was based on my officials advice, which was that the later figure included the inflation from 2004. If the figure is greater or less than £2 billion, I shall write to the hon. Gentleman to inform him. However, that is the reason for the increase.
A substantial proportion of LOCOGs expenditure will be met by sponsorship and the legislation has been drafted specifically to protect LOCOGs right to raise sponsorship. LOCOG has the rights to deal with the sponsorship and any illegal actions, as was clearly explained when the Bill was going through Parliament.
Helen Jones (Warrington, North) (Lab): I begin by congratulating the Government on the improvements that they have made in further education and on recognising the importance of the sector in their White Paper. The contribution that FE can make to improving our skills base, widening opportunities for 14 to 19-year-olds and addressing my particular concern of giving second chances to those who may not have had the educational advantages that they deserved is vital if we are to improve our educational standards and maintain a vibrant economy. It is fair to say that the Government have recognised that with the investment that they have put in; I believe that it has increased by 48 per cent. in real terms since 1997.
The results can be seen in bricks and mortar in constituencies such as mine. My local college has a£27 million new build, which will replace outdated and unsuitable buildings with something fit for the21st century. In turn, the investment has produced rising success rates in FE; there has been a rise from59 per cent. in 2001-02 to 72 per cent. in 2003-04. We know that more 19-year-olds get level 2 qualifications and that more people are completing apprenticeships.
Nothing that I say today is intended to detract from that success, which is real and life-transforming for many people. I do not suggest that we do not need to focus on skills and on ensuring that more people stay on at 16. That has been a blot on our educational record for far too long in this country, but we are making progress in that area. Some 8 per cent. of people in their 20s do not have any qualifications, and although that figure is still far too high, we are making progress.
We have a mountain to climb in respect of the people who left school 20, 30 or 40 years ago. We should focus on one stark fact: 24 out of every 100 adults aged between 40 and 64 have no qualifications. Those adults will need to reskill if they are to participate in the labour market. It is estimated that in the next decade two out of three jobs will be filled by adults rather than by new entrants to the labour market, so we should not neglect their needs. The difficulty that we need to discuss is how we get such people, particularly those with no qualifications, back into education. That is not always done in the way that we might expect. In my experience, many people first come back into education by doing shorter courses at venues that are not threatening. We should not underestimate how difficult it is for people who have failed in the past just to get through the doors of a college.
If we do not succeed, the penalties will be stark. I looked at the latest figures that I could findthose for 2004and they were clear. Some 49 per cent. of those with no qualifications were in employment, whereas71 per cent. of those who had a level 1 qualification and 75 per cent. of those who had a level 2 qualification were. I am sure that the figures have risen since then, but the ratio will have remained similar.