Olympics and Paralympics (Funding)

Debate between John Whittingdale and Ian Swales

Monday 27th February 2012 Commons Chamber

[Mr Whittingdale]

My hon. Friend anticipates me. I was going to say that the clear reason why the contingency has been spent to a far greater extent than we had originally hoped was that the private sector contribution to the athletes’ village and the media centre simply failed to materialise and had to be met from the public purse. Recouping some of that money through future sales is still an issue of some interest to us, and I hope that the Minister might be in a position to say more about it.

There was always a degree of controversy about the extent to which the financing of the facilities would have to be met out of national lottery funding, and the impact that that would have on the lottery’s ability to fund projects in the rest of the country. We were always very clear that if the lottery was to meet a substantial part of the bill for hosting the Olympics, it would inevitably be less able to fund a lot of worthwhile projects elsewhere, and that some causes would therefore not get the funding that they otherwise deserved. For that reason, we expressed the hope that should the contingency not be fully spent, it could be given back to the national lottery. As it transpires, that will not be possible.

I still very much hope that even though the National Audit Office has expressed concern, the funding package will prove just about sufficient to meet all the costs. I am sure the Minister will want to say a few words about that if he is fortunate enough to catch your eye, Mr Speaker. I believe it is fair to say that it will be very tight. The NAO’s last estimate identified a residual risk of something between £127 million and £999 million, with the most likely risk being £318 million, to be met out of the remaining contingency of £354 million. That would leave 0.39% of the budget unspent, so I am afraid the national lottery will not get much from that source.

The Committee identified that future receipts from land sales could be used to compensate the national lottery, and the Government included such a provision in the funding agreement. That is still intended, I hope, to raise £675 million. Perfectly understandably, the Minister is reluctant to give a firm guarantee about that, given the uncertainty about the price of land, but I hope he shares my hope that that can be achieved.

[Ian Swales (Redcar) (LD)]

Does my hon. Friend agree that the House should not regularly follow the precedent of sequestering money from the national lottery, since it is not general taxation, and that the lottery should be independent of the House? Does he therefore agree that it is important that the lottery is recompensed as much as possible for the funds that it put into the project?

[Mr Whittingdale]

Yes, I basically do agree with my hon. Friend, but the financing of the Olympics seemed to me a legitimate use of lottery funding, because it is a sporting event and that was one of the four good causes that the lottery was originally established to fund.