Community causes hit to meet soaring costs of Olympics

In a Times report today on the rising costs of the London Olympics, there's greater focus on the effect on the National Lottery and the good causes it supports.

The report claims that "thousands of community projects" covering health, education, arts and sport face cuts or closures over the next five years to fund the new £9.3bn bill, and reveals that, as well as the lottery contributions, Gordon Brown had to raid £5bn more from Whitehall departments.

What impact will that have on the services they provide?

Apparently the Chancellor had been pressing for a much larger contribution of £2bn from the National Lottery. Not surprising, when Tony Blair committed him to handing a net total of £36bn to the EU - completely without justification - between now and 2012.

Though it remains to be seen whether MPs will approve that bad EU budget deal.

The National Lottery was already set to contribute £1.5 billion to the Olympics costs. Further calls on its funds will inevitably have a huge impact on services.

While grants till 2009 will apparently be protected, thousands of new groups applying for cash in the next five years are likely to be turned down.

Big losers

The Big Lottery Fund, which supports tens of thousands of community projects, is to lose 17.5% of its funding, totalling an extra £425 million over four years.

The Arts Council England faces an extra £62 million cut, the Heritage Fund will lose £90 million and Sport England will lose £55 million during the same period.

The Times report also provides more information about where Ken Livingstone will find the extra £300 million he now has to contribute - without putting up council tax.

Livingstone is also said to have pledged to protect transport fares, but his office said the funding would be shared between Transport for London and the London Development Agency.

Peter Hewitt, chief executive of Arts Council England, said he was deeply disappointed that more money was to be diverted away from the arts.

He said, “The impact is likely to be felt across the whole of England and disproportionately by smaller arts organisations, local projects and individual artists — the main recipients of our lottery funds,” Mr Hewitt said.

Dame Liz Forgan, chairwoman of the Heritage Lottery Fund, said that the cuts were “bad news for the UK’s heritage” and that she expected libraries and museums to face serious cutbacks.

She said, “In recent years our lottery money has been the single largest source of support not only for our historic places, museums and galleries but also for our natural heritage and the cultural history of the people of these islands.”

Derek Mapp, the chairman of Sport England, said: “The decision to divert a further £55.9 million of Sport England’s share of lottery income between 2009 and 2012 to fund the Olympics and Paralympics seriously endangers the creation of a sporting legacy from the 2012 Games.”

Sir Clive Booth, chair of the Big Lottery Fund said that the Government’s decision to divert £425 million from its good-causes resources “will be a cause of concern for many organisations across the UK”.

Yet depriving money from good uses and causes in all these areas wouldn't be necessary if the government weren't wasting such an unjustifiably large amount of money on the EU.

Will MPs take the right decision when the EU budget deal comes before Parliament, and choose to countermand Blair's waste, save the money and prevent these cuts instead?

In the real world of finite government resources, MPs must take difficult choices and ask: who deserves those tens of billions of pounds more?

Good causes? Or an organisation with a terrible reputation for waste and fraud, that hasn't had its accounts approved by auditors for twelve years running?

No contest, surely.

Olympics budget rises to £9.3bn

The accuracy of an earlier BBC revelation about the rising budget for the 2012 London Olympics was confirmed today.

Culture Secretary Tessa Jowell told the House of Commons that the costs have risen to £9.35bn - nearly four times the original £2.4bn estimate.

Construction costs are now set the reach £5.3bn and there is a £2.7bn "contingency fund". Tax and security costs have also risen.

It was also confirmed that, as the Treasury is not able to cover these rises, both lottery funds and London taxpayers will foot a large part of the extra bill.

In raiding the lottery in particular for a further £675m to make up the shortfall, the government will not just penalise small sports clubs and organisations up and down the country that are supposed to benefit from the Olympics, but many other good charitable causes besides.

Overall, the government's contribution will now be £6bn, with £2.2bn coming from the National Lottery - including the extra £675m - and the rest from London's council tax payers.

London's contribution will be an extra £300 million, but as Mayor Ken Livingstone has said that the money will not be raised from higher council tax, it's not clear which public services or works are are going to be cut, or other taxes / charges raised, to pay this extra amount.

Whatever your view of the Olympics and their value, the key point here is that burdening London taxpayers and, worse, the National Lottery with these extra costs is not necessary.

The government could easily cover all these extra costs without depriving London's public services or good causes of money if it wasn't going to waste £36bn (net) between now and 2012 by handing it to the wasteful, audit-failing EU.

Call for Olympic spending checks

A new study by the BBC has shown that the cost estimates for the London 2012 Olympics continue to rise, with the latest estimate now nearing £9bn.

This is four times the £2.35bn figure set out in the city's bid for the Games, which itself rose 40% to £3.3bn back in November according to the culture secretary Tessa Jowell.

Now the BBC has found that construction alone will equal that figure. A further £2bn construction contingency fund will be set aside, with regeneration costs of £1.8bn and a £1bn VAT bill taking the total higher.

The big question is: where is this money going to come from? The answer seems likely to be an ever greater reliance on contributions from the National Lottery.

But as Shadow culture secretary Hugo Swire said on the BBC's Today programme, "Now the lottery is already having to contribute one and a half billion pounds which is going to mean a lot of the other good causes are going to suffer as a result."

But there is an alternative. By the time the Games come around in 2012, the government will also have paid the EU a net total of £36bn - if the current EU budget deal gets approved by MPs.

That's several times more than the total cost of the Games, even at the level of current upper estimates.

Just an idea, but instead of depriving good causes of lottery money, why not put a stop to those payments to the EU until that organisation can at least get its accounts approved by auditors. Whatever accrues from this source can be put towards plugging the Olympics funding gap.

We'd find there would be lots left over for other useful purposes too, like paying off NHS deficits and preventing further cuts to health services.

There's certainly no justification for continuing to send billions to the EU while auditors can't tell us how the "majority" is being spent. Especially when public money is urgently needed elsewhere.

So who's getting the chop Tessa? Lottery-funded good causes, or the EU?