In the first legal challenge to a lottery pay out, Leolin Price QC said the Arts Council agreed to hand over pounds 55m for the pounds 215m Covent Garden opera house redevelopment project in central London - involving land of which the council was a joint owner.
"There is no power for the council to distribute lottery money to itself, or to a project in which it has an interest," the QC told a judge. Mr Price said the pounds 55m allocated was the largest distribution of lottery money so far contemplated by the council.
"The conflict between the council's statutory responsibility for choosing between competing applicants for lottery money and its interest in this particular intended distribution is intolerable", said Mr Price. "The law should not permit - and in our submission does not permit - an exercise of discretion in favour of the person given that discretion."
The QC was asking Mr Justice Tucker to give Jo Weir, chairman of the Covent Garden Community Association, which fears the proposed redevelopment will damage the area, permission to seek a judicial review of the council's decision.
Planning conditions laid down by Westminster councilhad not yet been satisfied and the Opera House was applying for some of them to be discharged, having failed to get approval for designs for buildings which will replace historic ones in Russell Street, Bow Street and the Covent Garden Piazza.
Despite this, the Arts Council had wrongly begun to distribute the lottery cash on the basis that the conditions would be properly met.
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