LDA statement on Olympic Legacy Directorate budget findings

 The London Development Agency has today published the details and implications of the additional spending commitments identified in its Olympic Legacy Directorate.

This follows a systematic review of all LDA projects, governance and procedures instigated by the LDA's new leadership following the election of the new Mayor. The final element of this process was the review of the Olympic Legacy Directorate, which was initiated by the new LDA Board at its first meeting in September 2008 as part of our due diligence procedure in advance of the new Olympic Legacy Company.

This review and new internal financial regulations allowed the LDA to identify some additional spending commitments in our Olympic budgets. We immediately asked KPMG to investigate this further and they have now found that the additional commitments total a potential of up to £159 million. These additional commitments relate largely to statutory payments required for the Olympic land programme and are part of the LDA’s historic management failures that were inherited by the new leadership.

The LDA's leadership has drawn up proposals to accommodate these commitments into our budgets this year through the savings we have already made through the review process and by re-forecasting our budgets. We have been and are cutting out areas of work which were not returning good value for money. The LDA had historically funded a proliferation of small, low-value projects with little demonstrable return on investment. Our new investment strategy proposes to focus on six core themes to create value for London, where future LDA investments are on larger, more strategic projects that will achieve greater impact and value for money.

KPMG's key findings are that, while there is no evidence of fraud, there were historic failures in the Olympic Legacy Directorate including the non-escalation of known budget overruns, poor documentation, poor performance control and monitoring, poor financial controls and the lack of long-term budgetary control. These findings echo those made by earlier reviews of the LDA’s historic performance such as the Mayor’s Forensic Audit Panel.
 
The reports on KPMG's findings and the LDA's proposed solutions to manage future budgets will be considered by the LDA board on Wednesday, 16th September.

ENDS