Inquiry into 'unlawful' lottery grant to opera house

MARIANNE MACDONALD

Arts Reporter

The National Audit Office is investigating a complaint that the pounds 55m lottery grant given to the Royal Opera House by the Arts Council was unlawful, as the council is a trustee of its land. The complaint also claims the Royal Opera House would be in breach of lottery law if it used the pounds 55m to pay for a proposed shopping development on its Covent Garden site.

The ROH lottery application asked for money for a pounds 213m scheme to redevelop the Grade I listed opera house in Covent Garden. It said it would raise extra funding through donations and by building shops to sell at a pounds 65m profit.

But the NAO complaint claims the Arts Council should not have given the ROH cash, as directions under the Lottery Act forbid it to fund a company of which it is "a member".

It argues the Arts Council is a "member" of the ROH because the redevelopment work will be carried out by a subsidiary company of the Royal Opera House Development Land Trust, of which the Arts Council is a trustee. Gouldens, solicitors acting for the Covent Garden Community Association, a local residents' group, said the award represented a "plain conflict of interest". It told Jeremy Newton, the national lottery director, that the Covent Garden site is held under a trust deed which specifies that the proceeds from any sale of its land are to be split between the Arts Council and the ROH: "Any money distributed by the Arts Council to the Royal Opera House for the development of the site will be money distributed for the benefit of the Arts Council itself."

A spokeswoman for the funding body said the ROH assessment report would not be made public because it was too"sensitive".

Mr Newton denied the funding body was guilty of illegality. He said the pounds 55m would not be used to pay for the shops but for the opera house extension.

He denied the Arts Council was a "member" of Royal Opera House Developments Ltd. "We are not a shareholder in the company," he said. "We have had legal opinion from two law firms and a QC that we have a cast-iron case." A spokeswoman for the Royal Opera House said that the Arts Council had been appointed joint trustee of its land to protect the public interest.

The complaint was filed by Denis Vaughan, the conductor and director of the new Council for the Advancement of Arts, Recreation and Education. Fiendish saga, page 2