Charities angry at failure to repay £425m lost to Olympics budget

http://www.theguardian.com/uk-news/2013/nov/24/charities-anger-olympics-budget

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More than £400m of lottery money diverted from good causes to pay for the Olympics is unlikely to be repaid for decades, if at all, charities fear.

In 2007 the Labour government diverted £425m from the Big Lottery Fund, which helps small community groups and charities across the UK, to pay for infrastructure on the Olympic Park. A pledge was given that the charities would have the cash returned.

But a memorandum of understanding, obtained under the Freedom of Information Act, reveals that a series of agreements has been drawn up to decide who gets first claim on cash from Olympic asset sales – and that charities are not at the front of the queue.

A body representing the good causes that have lost out has branded this a "scandal" and is questioning why none of the political parties is pressing for the money to be returned urgently.

The Directory of Social Change (DSC), which is running the Big Lottery Refund campaign, says the coalition has reneged on a promise to repay and now insists the money will be returned from sales of park assets.

In March last year the culture secretary signed a memorandum of understanding with the Greater London Authority, which divided claims on the assets into three tranches.

The first, £233m, goes to the GLA, to be retained by the Olympic Park legacy committee. The lion's share of the second tranche, some £900m, will be held by the culture secretary "pending repayment to lottery distributors". The DSC estimates that this means charities will have to wait until the 2030s to be repaid.

But campaigners argue that even this promise may be in doubt. They point out that in July a London Legacy Development Corporation report valued saleable land on the site at just £85m – much less than what is owed to the charities.

"None of the major parties appear to be taking this crucial issue seriously," said Jude Doherty, policy co-ordinator at the DSC. "Labour took the money in the first place, and the Conservatives and Liberal Democrats, although critical at the time, have quietly watered down their commitment to paying it back. They're kicking it into the long grass – it's just not acceptable."

A House of Lords report, published last week, also failed to address the issue, much to the charities' dismay.

"There is a lot of anger in the charity world about this scandal," Doherty said. "Despite hundreds of letters to MPs and ministers from thousands of Big Lottery Refund campaign supporters, party leaders are ignoring our pleas. That needs to change – it's only because the Big Lottery Fund is relatively unknown outside the charity world that the anger is not yet more widespread. Can you imagine if the government had 'borrowed' this money from Children in Need? The effect on vulnerable people and communities is the same."

The DSC calculates that the withheld cash could help 10,000 charities and 8 million beneficiaries. It points out that the Olympics ended up coming in £528m under budget – but this was handed to the chancellor, rather than the charities.

The failure to return the cash has been the subject of criticism from parliament's public accounts committee. In April it published a report on the Olympics' legacy that noted:"Lottery good causes lost money during the period running up to the games. They need to be assured that they will get some of this back from the financial returns secured from the development of the Olympic Park."

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