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The funders decided that a public sector approach offered better value for money than a deal with private developer Lend Lease and would cost substantially less public money in the long term. The terms of the Lend Lease deal had been materially affected by the economic
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downturn, such that it no longer offered best value for money. Previous releases of contingency (totalling £326 million) have kept the progress on site on track over the last year.

The decision to make a further £324 million available to the ODA makes a total of £650 million being made available to deliver the village for the games.

This further investment now means the public sector will own the village and receive returns from sales after the games.

Over the medium to long term, as the market improves, the ODA will seek alternative private investment and management for the village on terms more favourable to the taxpayer. At least all of the additional £324 million public investment being made today from contingency and savings is expected to be returned after the games when the flats are sold.

To fund this investment, the Funders Group agreed to release £324 million of public funding from within the Olympic budget. Of this, £26l million comes directly from the contingency fund while £63 million is from savings made elsewhere across the ODA’s programme.

Following a competitive tender process the ODA was in discussions with developer Lend Lease about private sector investment into part of the village development. Lend Lease has already been appointed construction and development manager and this remains unchanged.

Lend Lease and its banking consortium were prepared to invest up to £150 million of equity, involving a return to Lend Lease, and £225 million of bank debt to finance part of the construction and development costs.

However, the current economic climate has resulted in the private sector becoming more risk averse and, for the deal to proceed, the ODA would have had to carry an increased level of risk.

After careful assessment it is clear that the publicly funded option will provide the best value for money over the longer term.

It was also confirmed today that agreement in principle has been reached for a further £268 million to be invested in the Village through the pre-sale arrangement for the affordable housing element. This funding is separate to the Olympic budget and made up of grant from the Homes and Communities Agency (HCA) and lending from a private sector banking consortium on commercial terms.

This means the funding for the village has now been confirmed. The total cost of the village, including £147 million of post games development costs, can now be confirmed as £l,095 million. This will be funded using:

Our valuations demonstrate that at least all of the contingency being invested today and the balance needed to meet the total cost of the village will be recouped in sales. It is impossible to know exactly how much will be recouped from private housing sales, given the uncertainty of the market, but independent analysis has supported the valuation used.

Construction work on the village started on schedule last June and remains on track with building now underway on four out of the eleven residential blocks.

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Quarterly Economic Report—May 2009

I have today published the Government Olympic Executive’s first Quarterly Economic Report—“London 2012 Olympic and Paralympic Games Quarterly Economic Report May 2009”.

The report explains the latest budget position including the impact of the decisions made at the Funders’ Group meeting on 12 May 2009.

Due to cost savings and good management the overall forecast cost of the programme has reduced by £179 million since our last report in January to £7.234 billion—being £865 million less than the maximum budget available.

It also outlines the progress that has been made since January 2009 on providing support for businesses and individuals through training, apprenticeships and other initiatives.

The report shows that, after taking into account the £324 million made available to the ODA yesterday, around £1.3 billion of contingency remains unreleased and the overall programme remains on time and within budget.

It also demonstrates the real impact that the games are having now—providing skills, training, apprenticeships and jobs for individuals and contracts to UK businesses—and how they are helping to prepare the new, post-downturn economy.

This is the first quarterly report produced by the Government Olympic Executive. It marks a shift from a six-monthly to a quarterly reporting cycle, which will increase further the transparency of the project.

I would like to commend this report to the Members of both Houses and thank them for their continued interest and support of the London 2012 Games.

Copies of the Quarterly Economic Report May 2009 are available at: and will be deposited in the Libraries of both Houses.


Written Answers (Correction)

The Parliamentary Under-Secretary of State for Transport (Paul Clark): I wish to inform the House that the consolidated answer I gave on 22 April 2009, Official Report, column 758W to four Parliamentary Questions 267114, 267115, 267117 and 267165 regarding the distribution of salt for the treatment of roads, during January and February 2009 was not sufficiently clear in respect of the restrictions that drivers’ hours had on deliveries.

The answer advised that “During the weekend of the 7 and 8 February 2009, one of the primary salt suppliers could not make deliveries due to drivers’ hours restrictions”.

The restriction on drivers’ hours was lifted on 6 February, specifically to allow salt deliveries to take place. However, due to the extensive logistics required to plan deliveries and the late stage at which the drivers’ hours relaxation was received, a salt supplier, with whom the Highway
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Agency were in direct contact (via the Central Government led “Salt Cell”) to discuss the distribution of salt, confirmed it would not be possible to deliver over the weekend of 7 and 8 February.

Given the critical need for salt over that weekend, the Highways Agency put in place appropriate arrangements to facilitate immediate deliveries.

Sustainable Travel City (Demonstration Project)

The Parliamentary Under-Secretary of State for Transport (Paul Clark): I am today announcing that large urban areas across England are being given the chance to bid to become the country’s first Sustainable Travel City.

Up to £29 million will be invested over three years in at least one of England’s larger cities to encourage greener travel choices. These could include plans to support walking, cycling and initiatives to improve public transport.

This follows the success of the Department for Transport’s three Sustainable Travel Towns who, over the last five years, have seen car use fall by up to 9 per cent., walking increase by up to 14 per cent., and cycling increase by at least 12 per cent..

The aims of the Sustainable Travel City or Cities are to ease congestion, reduce carbon dioxide emissions and increase levels of physical activity in the local area. By achieving this, the city will provide a model for others to follow. The chosen city will introduce innovative new strategies and build on existing work to achieve this, which could include:

The major urban areas eligible to apply suffer from the worst congestion in the country. The nine areas are; Greater Manchester, West Midlands, West Yorkshire, South Yorkshire, Tyne and Wear, Merseyside, West of England (Bristol), Nottingham and Leicester.

We are also announcing up to £3 million of funding to smaller local authorities areas to help them develop their own green travel initiatives.

Work and Pensions

UN Convention on the Rights of Persons with Disabilities

The Parliamentary Under-Secretary of State for Work and Pensions (Jonathan Shaw): I am pleased to announce that the Government are taking the final steps towards ratification of the UN Convention on the Rights of
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Persons with Disabilities, and we aim to deposit our instrument of ratification with the United Nations on Monday 8 June. I will make a further announcement when this has been done.

The Government have given very careful consideration to the views that have been expressed in response to the Explanatory Memorandum which we laid before Parliament on 3 March setting out the basis on which we propose to ratify, including those of the Joint Committee on Human Rights in their report of 17 April. It remains our view that the handful of reservations and the interpretative declaration are required and we will now proceed to ratification on that basis.

With regard to education, an interpretative declaration will be entered to make clear that the UK general education system includes both mainstream and special schools, thereby clarifying how the UK Government interpret the Convention. A reservation will be entered to allow for circumstances where disabled children’s needs may be best met through specialist provision, which may be some way from their home, and which means that they will need to be educated outside their local community. This also maintains parental choice for schools outside the local community. The purpose of the interpretative declaration and reservation is to maintain the present policy and legislative position in respect of inclusive education.

On freedom of movement, a general reservation will be entered in order to retain the right to apply immigration rules and to retain the right to introduce wider health screening for applicants entering or seeking to remain in the UK, particularly in the event of a global health emergency, if this is considered necessary to protect public health.

A reservation will be entered in respect of service in the armed forces to preserve the position already reflected in the Disability Discrimination Act 1995 as amended (DDA). Service in the armed forces is exempt from the employment provisions of the DDA. This approach is entirely consistent with EU Council Directive 2000/78/EC establishing a general framework for equal treatment in employment and occupation. Service in any of the naval, military or air forces of the Crown are excluded from the DDA’s employment provisions to preserve their combat effectiveness. The Government decided to exclude members of the armed forces in the DDA because armed forces personnel need to be combat effective in order to meet a world-wide liability to deploy, and to ensure that military health and fitness remain matters for Ministry of Defence Ministers based on military advice, not for the courts.

The Explanatory Memorandum of 3 March explained that the UK’s reservation in respect of service in the armed forces and a complementary one proposed by the European Commission in respect of its proposals for European Community Conclusion (ie ratification) would be the subject of discussion. Following (and reflecting) discussion with the European Commission, the terms of that will be entered are:

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This is a slight change in wording—but the substance and rational for the reservation have not changed.

A reservation will be entered in respect of Article 12.4, which concerns safeguards for the exercise of substituted decision-making and includes a requirement for “regular review” by a competent, independent and impartial authority or judicial body. There is currently no review system for Department for Work and Pensions (DWP) appointees, that is, people who are appointed to claim and collect benefits on behalf of another person due to that person’s lack of physical or mental capacity. Those appointee arrangements are not at present subject to the safeguard of regular review, as the Government
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believe this Article requires. DWP is therefore actively working towards a proportionate system of review to address this issue.

Ratification of the Convention is our immediate objective, and represents the end of a detailed process. But equally importantly it marks a beginning, and enables the start of the process of implementing this important Convention within the UK.

Ratification of the Convention is further demonstration of our commitment to equality of human rights for disabled people, and our determination to achieve equality by 2025.

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