North ‘loses’ £102m

Mar 18 2008 by William Green and Adrian Pearson, The Journal

THE North East faces losing £102m in Lottery funding because the London 2012 Olympics budget has run “scandalously out of control”, it was yesterday claimed.

Research by the Liberal Democrats has revealed the biggest constituency losers could be Tyne Bridge at £23m and Newcastle at £11.39m, sparking demands that ministers act to ensure the region gets its rightful Lottery cash for arts, sports and heritage projects.

Durham, Berwick and Hexham are also set to lose out on millions of pounds, with every constituency nationwide hit by cuts as £2bn is taken from Lottery funds in the run-up to the London Olympics.

The Lib Dem analysis is based on calculating what funding each constituency has received since the Lottery was set up and what proportion of the £2bn they would have got.

The party is now urging the Treasury to look at taxing the National Lottery after it has paid out to winners, instead of the higher tax system currently used, to give the North East its fair share.

A report by consultants PricewaterhouseCoopers revealed this would allow much bigger lottery wins, especially on scratch cards, with an extra £398.8m for good causes over the next decade.

Forcing private lotteries operators, such as those operated by bookmakers and online bookies, to contribute towards good causes would bring in £44m annually.

Berwick’s Lib Dem MP Alan Beith said it was “indefensible” that the North was losing funding for vital projects to London, adding Olympics’ financing should never have been based on a Lottery raid.

Matthew Elliott, chief executive of the Taxpayers’ Alliance, said: “The Olympic budget has been allowed to run scandalously out of control, and the North East will lose out as a result.”

Conservative MP Peter Atkinson, who represents Hexham, said the Olympic budget had been “hugely optimistic” but stressed the whole country wanted world-class Games.

Senior Lib Dem Newcastle councillor Greg Stone said: “Yet again the North East is having to underwrite the cost of major infrastructure investment in the South East which we never get.”

The Department for Culture, Media and Sport (DCMS) said the Games would bring “immense” benefits to the country from world-class facilities to inspiring a generation of people to get active.

Half of the £1bn contracts awarded so far have gone to firms based outside London with of a total of £6bn contracts on offer, with measures in place to give back cash from land sales after 2012, said a DCMS spokesman.

He confirmed the Lottery Olympics contribution was £2.175bn compared with a projected income of over £11.3bn, less than a fifth of all Lottery cash in the run up to the Games.

He added: “Lottery money is additional, demand-led funding. It is impossible to say what each region will ‘lose’. There will be no impact at all in some regions. Other regions will see some projects delayed.

“It is important to remember that all regions stand to gain because the 2012 Olympics is a UK-wide project,” said the spokesman.