- Boris Johnson’s London Stadium deal has led to annual losses of up to £20 million a year.
- Mayor of London Sadiq Khan calls the process “bungled” and has now taken direct control over the former Olympic Stadium.
- New report shows taxpayer left liable for stadium’s cost and financial risk.
LONDON – Boris Johnson’s handling of the London Stadium’s transformation was “bungled” and has led to an annual loss to Londoners of £20 million, a new report commissioned by Johnson’s successor suggests.
The new independent report by accountants Moore Stephens shows how decisions made by Foreign Secretary Boris Johnson during his time as mayor led to the taxpayer having responsibility for its cost and financial risk.
The analysis found that the public money spent will never be recovered and that unless action is taken to improve the financial situation, the stadium will continue to lose around £20 million a year.
Khan said the report: “Reveals a bungled decision-making process that has the previous Mayor’s fingerprints all over it.
“Boris Johnson clearly panicked when faced with legal challenges about West Ham and Newham’s joint bid to take ownership of the Stadium and then decided to re-run the bid process with the taxpayer taking all the risks and footing almost the whole bill. You simply couldn’t make it up.”
This morning I’ve published the independent review into the mismanagement of London Stadium finances by the former Mayor. It reveals a catalogue of errors that has left the taxpayer to foot an annual loss of around £20 million. https://t.co/2jPdBI38Nf pic.twitter.com/7p7N4CX1K3
— Sadiq Khan (@SadiqKhan) December 1, 2017
However, a source speaking on behalf of Johnson told the Evening Standard that the blame for the stadium’s failure instead lays with his own predecessor as mayor.
The stadium was initially designed and constructed under the last Labour government, although the post-games transformation of the stadium happened under Johnson.
“The mistakes belonged to Khan’s Labour predecessor Ken Livingstone and the Blair government,” the source said.
“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.”
The report found that Johnson allowed binding contracts to be signed with West Ham United football club and UK Athletics, which severely limits the options for hiring out the stadium for other revenue-generating opportunities.
The stadium’s transformation cost £323 million, significantly higher than the original estimate of £190 million, which the report concludes was “unrealistic” and never properly scrutinised. These costs were not paid for by West Ham, a Premier League club.
The Moore Stephens report says: “In our opinion, the decision to transform the Stadium and to contract with WHU was made on incorrect financial estimates and an insufficient appreciation of the critical commercial and financial risks.”
“It is our opinion that the financial estimates were incorrect not because they were estimates, but because there were errors in their calculation, compilation and presentation.”
Khan said: “I am determined to put the London Stadium towards a stronger financial footing and secure its long-term future, but I’m under no illusion that this is going to take time and some real commitment from all partners to make this work.”
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