Labour MP criticises 'lack of transparency' over good cause money used to finance the Olympics

Fiona Mactaggart, a member of the Public Accounts Committee, says arrangements for repayment puts the National Lottery, and the causes it funds, at a disadvantage

Fiona Mactaggart
Fiona Mactaggart

The Labour MP Fiona Mactaggart has said there is a "lack of transparency" for good causes about when they can expect to receive National Lottery money used to finance the cost of the London Olympics and Paralympics.

Speaking at a post-Games review meeting of the Public Accounts Committee last week, Mactaggart, who is a member of the committee, also said she had a letter from the Secretary of State for Culture Media and Sport that said the lottery will receive between £30m and £50m of the £377m contingency fund that went unspent.

She referred to figures that showed central government provided about 67 per cent of the cost of the Games; the Lottery about 23 per cent; and the Greater London Authority and the London Development Agency less than 10 per cent.

But she said arrangements for the repayment of money from the sale of assets seemed "to put a huge amount of power in the hands of the Greater London Authority and the LDA", at the expense of the bigger contributor, the Lottery.

She said she was worried about the payback that will come from capital sales and the mechanism by which good causes can ensure they get it because they are not in the contract "circle".

Mactaggart pointed out that if large assets, such as the Olympic Stadium, are not sold but instead used to produce a rental income, the lottery good causes will not get the money and they are "not at the table".

She added that there is a "real lack of transparency" for good causes about what is going to happen and when they can expect money.

"We are at a time when charities are under the cosh," she said. "Most of this money from something like the Big Lottery Fund will go to smaller charities, which are really suffering because philanthropy is being squeezed at the moment. They want to know when this is going to happen and they aren’t at a place where they can put any leverage on it – and I don’t think that’s right."

Jonathan Stephens, permanent secretary at the Department for Culture Media and Sport, said the contract had been negotiated by the DCMS specifically to protect good causes and ensure they share in receipts generated from development. He said this year what was previously a non-binding memorandum of understanding was converted into a binding contract and also brought forward the stage at which receipts would accrue to the lottery.

Stephens said any money in the Olympic Lottery distribution fund that is left unspent goes back directly to the lottery good causes. He added that a "significant" contribution the lottery made to the development and funding of the Olympic Village in the form of a loan would be repaid on completion of the village’s sale in 2014, resulting in some £75m going back to lottery distributors.

When pressed by the committee chair, Margaret Hodge, for a "guestimate" as to when the first lot of the £675m taken from lottery distributors to help finance the Games will go back to the lottery, Denis Hone, chief executive officer, of the London Legacy Development Corporation, http://www.londonlegacy.co.uk/, said he would write to the committee with details of when that would come but there were "uncertainties".

The National Lottery minister John Penrose said earlier this year that the full amount might not be repaid until 2030/31.

Jay Kennedy, head of policy at the Directory of Social Change, which is running a campaign calling for the repayment of the £425m taken from the BLF to pay for the Olympics, welcome Mactaggart's line of questioning. He agreed that there had not been sufficient transparency, especially considering the large amount of money involved. 

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