Boris Johnson accused of costing taxpayers £20m a year in bungled Olympic stadium conversion

The former Mayor of London put himself in charge of the London Legacy Development Corporation, the company tasked with finding a sustainable financial future for the London Olympics' venues

Tom Peck@tompeck
Friday 01 December 2017 17:39
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The stadium now hosts West Ham United football club and occasional athletics meetings
The stadium now hosts West Ham United football club and occasional athletics meetings

London Mayor Sadiq Khan has accused Boris Johnson of landing the taxpayer with a £20m-a-year bill over his handling of the deal with West Ham United for the former Olympic Stadium.

An independent review commissioned by Mr Khan found “a catalogue of errors” in the transformation of the centrepiece of the 2012 Games into a multi-purpose venue, but with far higher running costs than anticipated, which are many times higher than the rent paid by the football club.

The Mayor announced he will take over full control of the stadium, with the London Borough of Newham withdrawing from the partnership that owns it.

He promised to work with West Ham, UK Athletics and other partners to “move it towards a more secure and stable financial footing”.

The 169-page report by forensic accountants Moore Stephens found the £323m cost of the conversion would never be recovered, while the stadium itself would continue to lose £10m-£20m a year.

The decision to transform the stadium and enter into the “onerous” contract with West Ham was made on “incorrect financial estimates” caused by “errors in their calculation, compilation and presentation”, along with an “insufficient appreciation” of the risks involved, it said.

Mr Khan said the findings were “simply staggering” and revealed “a bungled decision-making process that has the previous Mayor’s fingerprints all over it”.

He claimed Mr Johnson “panicked” in 2011 when faced with legal challenges over a joint bid by West Ham and Newham to take ownership of the stadium and “decided to re-run the bid process with the taxpayer taking all the risks and footing almost the whole bill”.

The report identified this decision as the moment when the process of finding a legacy for the Olympic stadium “went awry”.

West Ham, who have a 99-year lease on the 60,000-seat stadium, made a one-off contribution of £15m to the cost of the conversion, which followed the Olympic and Paralympic Games, and pay £2.5m a year in rent.

The total price tag for the stadium, which also has a new roof, is estimated to be £752m.

Sources close to Mr Johnson, now Foreign Secretary, said that blame should be directed at the original planning for the 2012 Games by previous Mayor Ken Livingstone and former Prime Minister Tony Blair.

“No other city has an Olympic legacy like London’s – all seven venues on the park are in private hands, with millions of visitors a year, and a positive economic legacy for east London,” said the former Mayor’s ally. “The stadium has a secure future with athletics and football.

“The mistakes belonged to Khan’s Labour predecessor Ken Livingstone and the Blair government. Signing off on a stadium fit only for athletics was a massive error. The only option for Boris was conversion to a multi-use venue.

“If Sadiq Khan wants to try and blame someone he should blame his New Labour pals and the old Labour Mayor for their catastrophic planning failures.”

West Ham United said the club had “entered a fair and competitive tender process” as they were selected as anchor tenant.

The Premier League club view the Concession Agreement signed in 2013 as “a watertight, legally-binding contract” and remain “absolutely committed to its terms for the entire 99-year duration”.

West Ham will “continue to devote our absolute commitment to London Stadium”, but added “our first priority in this sense is always to act in the best interests of our supporters”.

“We fully concur that West Ham United has played a significant part in the most successful regeneration programme in the history of the modern Olympics, however the stadium itself craves renewed leadership and direction and we welcome the Mayor’s decision to step in and deliver this. West Ham United is firmly behind him,” the statement concluded.

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