Poorest borough's £40m plan for an Olympic future
Remember how plans for a £40m loan from Newham Council to West Ham lead to the deal over the 2012 Olympic Stadium collapsing?
Well, I've learned that a Newham Council meeting on Monday night will discuss how the council wants to fund the future stadium plans. Guess what? They're asking councillors to approve £40m of money from Newham.
The original deal with West Ham collapsed in October because of a legal complaint to the European Commission about the loan which could be regarded as state aid to West Ham.
But it was also controversial because Newham is London's poorest borough and some people questioned whether it should be giving money to a football club at a time of spending cuts.
That second argument still stands as the council discusses whether to give its chief executive, Kim Bromley-Derry, the power to offer the Olympic Park Legacy Company (OPLC) money to help rebuild the stadium after the Games.
Newham officials say they want to have a say in how the stadium is run after the Games and need, therefore, to have a legal stake in it. It will be owned by a public body set up by the OPLC.
A spokesman told me that the council would pay back any costs by sharing in the revenue generated by the stadium. It expects to raise the cash either through a loan or by using public funds to buy equity in the public body running the stadium.
But the council will also share the risk if the stadium becomes a white elephant.
West Ham may ask to rent the stadium, instead of sharing in a lease like last time, and it is hoped that the venue could become a successful concert arena.
But after £9.3 billion has been spent on building Olympic facilities, is it right that the poorest part of London should be spending more cash on its future?
It certainly would be a surprise if councillors turned down the proposal.
But, as ³ÉÈË¿ìÊÖ London reported at the time, there was controversy over the original loan.
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Comment number 1.
At 29th Nov 2011, Mike Law wrote:I'm amazed that Newham's councillors have repeated the same mistake without any scrutiny of the previous Newham/WHUFC bid. I'd like to know why Monday's meeting was held in camera? There should be no commercial confidentiality requirement as it is the Council (public body - public funds) investing in another public body.
Furthermore, why should Newham be the ONLY London authority investing in the stadium? If Newham's mayor is concerned that Newham's residents will not get allocated sufficient use of the stadium once it is in public hands he should use his considerable influence with the Mayor of London and the Government to ensure that Newham residents DO get to use the stadium. He should no be pouring public funds into a potential white elephant when the funds are needed to save local services.
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Comment number 2.
At 29th Nov 2011, Newham wrote:GREAT NEWS!
I applaud Newham Council for persevering with what is an after all, an investment in its own future - and for future generations.
Central govt. has pulled back from investment in the country, and we learn today that the legacy is a £50bn black hole in tax revenues and a commitment to increased dole handouts.
Newham clearly have been unwavering in their support for the bid from day one, yet have faced unrelenting attack from the media, and from the despicable actions of football teams in other boroughs.
Newham's plan also allowed us to win the 2017 Athletics World Championships - for which the wider economic benefit to the capital is estimated at £100 million.
A £40m loan on a £537 Million asset that will regenerate the poorest borough in London appears to me to be sound commercial sense.
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Comment number 3.
At 29th Nov 2011, Mike Law wrote:And no doubt "Newham" is a councillor who voted for the proposal. Tell me, if the economic benefits for the people of Newham are so good, why have the details been kept from the public?
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Comment number 4.
At 30th Nov 2011, Susan Fernandes wrote:This comment was removed because the moderators found it broke the house rules. Explain.
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Comment number 5.
At 30th Nov 2011, Cottee Potty wrote:The £40 million is an investment. The stadium will produce jobs for people in the borough. Once West ham leave Upton park it will also allow regeneration of that area bringing investment and more jobs for a relatively run down area. I remember growing up in the 70's & 80's and there being a thriving Saturday market in Queens and the High Street , there were also two cinemas.
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