FA baulks at paying out for Wembley failure

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The Football Association could claim it has no responsibility to repay £120m of Lottery funding if the new Wembley does not come to fruition, thus leaving a £90m hole in the public purse, according to senior sources close to the project.

Although the FA is committed, both publicly and privately, to pressing ahead with the £715m stadium, as it confirmed on Wednesday, it is horrified at the prospect of paying the astronomical price of failure. Instead of doing so, it might explore the possibility of passing the buck to its subsidiary company, Wembley National Stadium Limited.

"The responsibility [for the Lottery funding] lies with WNSL," one source told The Independent yesterday. "The obligation was never passed on to the FA." Although there would be strong objections and disputes about small print, the onus would fall on Sport England, which gave the grant, to retrieve the money and prove that the FA, and not WNSL, was liable. This is thought unlikely to happen. "Can you imagine Sport England turning on the country's oldest sporting governing body and trying to sue it towards bankruptcy?" one Whitehall insider said. "I don't think so."

WNSL has already received, and spent, the £120m Lottery money, primarily on land acquisition (£102m), stamp duty (£3m), and design and development costs. If the new stadium is scrapped, WNSL could simply sell the Wembley site, probably for around £30m, and hand that money back to Sport England. The site is worth relatively little with no prospect of a stadium. Having no other assets, WNSL would then effectively go bust and walk away from the situation. The FA would still have borne much of the estimated £15m cost of keeping the Wembley project on hold since October last year, but would not face another £90m hole in its accounts.

The most preferable option for the FA is for the stadium to go ahead and not, as one source said yesterday, face an embarrassing wrangle over Lottery money that was "too horrible to contemplate." The chance of avoiding such a situation was the clinching factor in the decision to press ahead with the new Wembley rather than have no stadium and keep England "on the road".

"The cost of not going to Wembley has dwelt on a number of people's minds in the last few days," a source said yesterday. "The whole situation would become very difficult indeed. That's why we're pressing ahead and not debating what might happen if the whole thing falls through."

Both Adam Crozier, the FA's chief executive, and Tessa Jowell, the Secretary of State for Culture, Media and Sport, have admitted there is a chance the venture could still fall through, although there has been friction between the Government and those involved in the Wembley project about the presentation of those fears. Crozier was upbeat on Wednesday, while Jowell was much more cautious. "None of us expected such ambivalence from her statement," a Wembley insider said. "We'd spent an age getting all our ducks in a row and then we heard that."

Until a final decision is made on whether the stadium will be built, the Wembley complex will remain largely deserted. In the six months after the final game in October last year which England lost to Germany, there were still plenty of staff around, including personnel from WNSL, architects, engineers, quantity surveyors, acoustics specialists and security men. Running costs were around £2m a month.

Since then, most of the specialists and contractors involved in the new stadium have been laid off. Security has been cut back to a bare minimum. And the small number of other staff remaining – about 20 WNSL administrators and accountants plus some personnel from the FA's mobile hospitality unit – have been working out of an adjacent office building. Running costs, paid by the FA, are thought to be between £150,000 and £200,000 a month. The closest the venue has come to seeing footballers was in Spring this year when the film, Mike Bassett, England Manager was shot on location. In that case, the Beautiful Game returning to its spiritual home was intended to be pure fiction.