Olympic land debt deal will impact on regeneration
Boris Johnson is set for a grilling from the London Assembly over the impact the Olympic Park land debt will have on London-wide regeneration.
The Mayor's regeneration plans will need to be re-examined with the £349million debt incurred by the London Development Agency due to be transferred to the Greater London Authority on April 1.
The GLA expects to inherit £349 million of Olympic land debt and sufficient Government funding is being provided to reduce the debt to £231 million by March 31 2014. Under an old arrangement the LDA was expecting grant funding to repay the entire sum.
It means the Mayor will have to balance his regeneration plans against the need to repay the debt.
According to the Mayor's draft budget for 2012/13, the GLA will get full receipts from the sale of land at Sugar House Lane - to the south of the Park - plus the first £223m in land receipts.
After that profits will split 25:75 between the GLA and Lottery until the Lottery has been repaid in full.
There is also a 50:50 split between the GLA and central government on any remaining land receipts. The Government will also provide the GLA with an extra £12million in 2011-12 to put towards Olympic land debt costs over the next three years.
The LDA took on the debt to pay for the acquisition and remediation of the Olympic Park.
Sir Edward Lister, the Mayor's Chief of Staff, told the London Assembly's Budget and Performance Committee this morning that the money tied up in the site is now a key part of the Mayor's regeneration budget so it needs to be spent to the best advantage of the GLA as a whole, rather than just on legacy plans for the Park.
The Committee will question the Mayor about his proposed budget for 2012/13 at City Hall next Tuesday.
John Biggs, chairman of the Budget and Performance Committee, said: "The new deal, while welcome in the long term, means that the Mayor will have to balance reducing the GLA's debt against his regeneration aims.
"When we meet the Mayor next week we will ask him how he plans to manage these pressures going forward to ensure he gets the best outcome for Londoners."