£100m black hole discovered in 2012 Olympics accounts

A £100m black hole in the 2012 Olympics accounts of the London Development Agency (LDA) is to be investigated by independent auditors, it was revealed last night.

A routine check on the accounts of the LDA, which is the business and development arm of Mayor Boris Johnson, hasrevealed huge irregularities with the accounting of taxpayer's money. A team of external accountants from KPMG, the consultancy that has been advising other parts of the London 2012 set-up on cost-cutting measures, has now been called in to investigate the whereabouts of the missing money.

Two senior members of staff at the LDA have been suspended. Gareth Blacker, who oversaw the purchase of the huge Olympic site on the Lea Valley, adjacent to Stratford in east London, is on indefinite leave, as is his accountant. No evidence of wrongdoing is attached to either Mr Blacker or his accountant.

Concerns began to mount after the Mayor announced a comprehensive audit of LDA accounts in March. The Olympic Legacy Directorate (OLD) was the last of the LDA departments to be reviewed. Analysis of its accounts revealed that between £60m and £100m, which was due to be put aside as compensation for businesses forced to relocate from the site, is unaccounted for.

Previously a highly contaminated industrial waste land, the Olympic site in Stratford is being redeveloped in the biggest construction project in Western Europe. The LDA has so far paid around £750m for its work on the land, which included deals of close to £1m per acre with each of the 193 small and medium-sized businesses forced to relocate. Many have moved to nearby industrial complexes in east London but more than four years after London's bid proved successful 72 claims are yet to be settled.

The LDA is due to stop existing in October when its £1.1bn budget, which is mostly tied up in the price of land, is handed over to an Olympic legacy company set up to ensure lasting benefits from the games. The LDA budget has no bearing on the overall £9.3bn budget for the construction of the Olympic site by the Olympic Delivery Authority (ODA), which continues to be ahead of schedule.

The auditors will be tasked with discovering whether or not taxpayer's money was wasted or misplaced through incompetence – and whether or not it is now retrievable. A source told The Times: "This has gone beyond a routine audit, into the realms of a fraud investigation".

The revelations will come as a fresh blow to Johnson. In December, David Ross, the founder of Carphone Warehouse who oversaw the Olympic budget and advised on legacy issues for the Mayor, quit from his position following a shares scandal. Just this week, Ian Clement, a deputy Mayor, resigned after irregularities were found in the use of his taxpayer-funded credit card.

A spokesman for the LDA said "additional spending commitments" have been identified.

KPMG declined to comment.The two suspended LDA employees were unavailable for comment, and the agency refused to discuss personnel issues.

Have you tried new the Independent Digital Edition apps?
Caption competition
Caption competition
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Daily Quiz
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

Day In a Page

The saffron censorship that governs India: Why national pride and religious sentiment trump freedom of expression

The saffron censorship that governs India

Zareer Masani reveals why national pride and religious sentiment trump freedom of expression
Prince Charles' 'black spider' letters to be published 'within weeks'

Prince Charles' 'black spider' letters to be published 'within weeks'

Supreme Court rules Dominic Grieve's ministerial veto was invalid
Distressed Zayn Malik fans are cutting themselves - how did fandom get so dark?

How did fandom get so dark?

Grief over Zayn Malik's exit from One Direction seemed amusing until stories of mass 'cutting' emerged. Experts tell Gillian Orr the distress is real, and the girls need support
The galaxy collisions that shed light on unseen parallel Universe

The cosmic collisions that have shed light on unseen parallel Universe

Dark matter study gives scientists insight into mystery of space
The Swedes are adding a gender-neutral pronoun to their dictionary

Swedes introduce gender-neutral pronoun

Why, asks Simon Usborne, must English still struggle awkwardly with the likes of 's/he' and 'they'?
Disney's mega money-making formula: 'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan

Disney's mega money-making formula

'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan
Lobster has gone mainstream with supermarket bargains for £10 or less - but is it any good?

Lobster has gone mainstream

Anthea Gerrie, raised on meaty specimens from the waters around Maine, reveals how to cook up an affordable feast
Easter 2015: 14 best decorations

14 best Easter decorations

Get into the Easter spirit with our pick of accessories, ornaments and tableware
Paul Scholes column: Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season

Paul Scholes column

Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season
Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

The future of GM

The greenhouses where Monsanto 'plays God' with the future of the planet
Britain's mild winters could be numbered: why global warming is leaving UK chillier

Britain's mild winters could be numbered

Gulf Stream is slowing down faster than ever, scientists say
Government gives £250,000 to Independent appeal

Government gives £250,000 to Independent appeal

Donation brings total raised by Homeless Veterans campaign to at least £1.25m
Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

The most borrowed book at Bank of England library? Oh dear

The book's fifth edition is used for Edexcel exams
Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

Cowslips vs honeysuckle

It's the hunt for UK’s favourite wildflower
Child abuse scandal: Did a botched blackmail attempt by South African intelligence help Cyril Smith escape justice?

Did a botched blackmail attempt help Cyril Smith escape justice?

A fresh twist reveals the Liberal MP was targeted by the notorious South African intelligence agency Boss