3 Delivering a lasting legacy
15. The prospect of the legacy the Games would bring
was an important element of London's bid, in particular that the
Olympic Park will be a blueprint for sustainable living and help
transform the heart of London.[27]
The Department told us that three-quarters of the Olympic Delivery
Authority's construction budget is contributing directly to this
regeneration aspiration.[28]
16. The Olympic Park Legacy Company was established
in May 2009 to assume responsibility from the London Development
Agency for securing a positive legacy from the Olympic Park. Accounting
Officer responsibility for the Legacy Company within Government
rests with Communities and Local Government.[29]
The Legacy Company will be responsible for the long-term development
and regeneration of the Olympic Park land and venues over the
next 10-20 years, including plans for further housing. It is responsible
for finding end users for the Olympic Park venues after the Games
and for generating revenues from the sale of Olympic Park land
and assets after the Games in 2012.[30]
17. Despite our previous recommendations it is still
unclear how publicly funded venues will be used after the Games,
and if unused how their upkeep will be funded. The Legacy Company
is currently in the process of putting together a business plan
setting out how it plans to develop the Park and manage the revenues
and costs of running the Park after 2012, with the intention of
maximising the return for the taxpayer. The Department told us
that the Legacy Company will have to meet the bill for any costs
associated with unused venues.[31]
18. The Media Centre is forecast to cost the taxpayer
£334 million, yet there are no firm plans for its use after
the Games.[32] The Department's
ambition for the Media Centre is the creation of new job opportunities,
in Hackney in particular, with a focus on the creative, media
and 'sunrise' (new) industries. The decision to locate the Media
Centre in the North West corner of the Olympic Park, away from
the main public transport hub at Stratford and within the security
perimeter, was determined by security, cost and operational considerations.[33]
It is located close to the A12, but of the 1,300 car parking spaces
available during the Games, as a condition of planning approval,
only 220 will be available to commercial users of the Media Centre
after the Games. The Media Centre's location makes it potentially
less attractive to commercial users increasing the risk that it
will remain vacant after the Games.[34]
19. The Main Stadium will seat 80,000 during the
Games and is forecast to cost £537 million.[35]
The Olympic Delivery Authority has designed the stadium with flexibility
in mind in line with the original intention for its capacity to
be reduced after the Games from 80,000 to 25,000. Despite the
commitment in London's bid for the Games that the Stadium will
be used as an athletics venue it is unclear what the plans are
for the Stadium after the Games and who will be responsible for
running it. The Olympic Park Legacy Company will soon provide
the opportunity for interested parties, for example West Ham United
Football Club, to put forward proposals for the Stadium's future
use.[36]
20. The National Lottery is contributing £2,175
million to the £9,325 million budget for the Games and we
have previously highlighted our concerns about the impact of this
on other National Lottery funded good causes. The Government aims
to repay £675 million to the National Lottery from a share
of the future profits from the sale of Olympic Park land and assets
owned by the London Development Agency, as set out in a 2007 Memorandum
of Understanding between the Government and the Mayor of London.
We pressed the Department on whether, in light of the current
economic situation, it could guarantee the reimbursement of the
National Lottery. While the Department provided us with a guarantee
that it would make no further calls on the National Lottery, it
did not provide any guarantee about the future revenues from land
and assets or the value and timing of the return on the National
Lottery's investment.[37]
21. The Olympic Village is part of the wider Stratford
City regeneration in East London and is situated outside, but
adjacent to, the Olympic Park land. The Olympic Delivery Authority's
budget is dependent on receiving some £600 million from the
sale of the Village units after the Games and from a share of
future profits from further post-Games development. The Delivery
Authority's objective is to achieve at least £500 million
in sales from the Village units, in part to meet its commitment
to repay £324 million of contingency funds provided by the
Ministerial Funders Group. The Department has proposed a strategy
for how any excess sale receipts from the Village will be redistributed
to funders. The Olympic Lottery Distributor will receive a proportionate
share of the receipts arising from its share of funding for the
Village, based on a January 2010 Memorandum of Understanding with
the Department.[38]
22. As part of London 2012's long-term legacy the
Olympic Delivery Authority has targets for the creation of new
training and employment opportunities for local people during
the construction of the venues and infrastructure.[39]
There is a target to recruit 15% of the construction workforce
from the five host boroughs, but the Olympic Delivery Authority
has encountered difficulty in accurately determining whether a
worker is a long-term local resident or is counted against the
target only because they moved to the area to work on the Olympic
Park.[40] The Delivery
Authority is also unable accurately to determine whether local
residents in the workforce were previously unemployed.[41]
23. The Olympic Delivery Authority has secured from
its contractors a commitment that 3% of the workforce will be
apprentices, which appears an excellent idea in principle. However,
given the scale of the London 2012 construction programme and
the desire to leave a lasting legacy the target does not seem
very ambitious. Nor was the target included in the initial contracts
for the site preparation works.[42]
The Delivery Authority has also reported that since 2008 some
2,400 workers have attended training courses at the National Skills
Academy for Construction.[43]
During the next phase of the Delivery Authority's construction
programme there will be a need for large numbers of skilled trades
people such as electricians and plumbers, and therefore an opportunity
to increase the numbers of apprentices working on site.[44]
24. The Olympic Delivery Authority's spending power
is being used to promote good practice in the construction industry,
but it is less clear how the lessons are being shared more widely
with other public organisations. The Department told us that the
Office of Government Commerce is one way the Government tries
to ensure lessons are learned from projects. The Office of Government
Commerce has reviewed the Delivery Authority's major procurements
and will be reviewing aspects of the wider London 2012 programme.[45]
27 HC (2007-08) 890; C&AG's Report, para 3.9 Back
28
Q 7 Back
29
C&AG's Report, paras 3.9 and 3.10 Back
30
Qq 7, 50 and 59 Back
31
Qq 58-59 and 112;, HC (2007-08) 890; C&AG's Report, para 5 Back
32
Qq 11-12 and 31; C&AG's Report, Figure 2 Back
33
Qq 32 and 48-49 Back
34
Qq 34 and 99-103 Back
35
Department for Culture, Media and Sport, London 2012 Olympic and
Paralympic Games Annual Report, February 2010 Back
36
Qq 31 and 112-113; London 2012 Candidate File Back
37
Qq 5, 7-8, 38 and 54-55; C&AG's Report, paras 1.2 and 4.13 Back
38
Qq 5-7; C&AG's Report, paras 2.7 and 4.10-4.12 Back
39
Q 65; www.london2012.com Back
40
Qq 65-67 Back
41
Qq 71 and 72 Back
42
Qq 78-79 and 84 Back
43
Qq 88 and 89 Back
44
Q 81 Back
45
Q 109 Back
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