MD1662 LLDC’s Ten Year Plan and 2016-17 budget

1.1. The LLDC Governance Direction 2013, approved under MD1227, states at Paragraph 4.2 and 4.3 that Mayoral prior consent must be obtained to approve the core business plan. In this case, it was agreed to seek the Mayor's consent to an updated Ten-year Business Plan, incorporating the 2016-17 budget, following approval of the Business Plan and capital and resource budgets for 2016-17 by LLDC’s Board at its meeting on 10 March 2016.
1.2. LLDC’s annual budget for 2016/17 and revised Ten-year Business Plan have already been included in the Mayor's draft final consolidated budget, which was considered by the London Assembly on 22 February 2016 and subsequently published by the Mayor.
1.3. This updated Ten-year Business Plan sets out the specific details of the overall plans for Queen Elizabeth Olympic Park (QEOP) over the next ten years. It also sets out the long-term operating context, objectives and financial projections of LLDC (see part 2 for detailed financial forecasts). These projections reflect confirmed funding of £151m from Government for the Olympicopolis project.
1.4. The plan is intended to be a publicly accessible statement of intent. A separate 'Resource Plan' supports the Ten-year Business Plan and will be updated at least every three years.
1.5. GLA officers have been consulted throughout the development of the updated Ten Year Plan and 2016-17 budgets, and comments have been taken into account.

Summary
1.6. LLDC’s capital budgets over the next ten years are concentrated on delivering Olympicopolis and enabling development of new neighbourhoods in and around the Park; expenditure net of capital receipts is funded by borrowings from the GLA, which are repaid in full over the long term, generating significant surpluses. Receipts from the sale of development land are currently forecast to repay the Lottery agreement in full (by 2036-37).
1.7. Revenue budgets support development of revenue streams from venues, rent and fixed estate charges, events, sponsorship and planning fees to fund expenditure on management of the Park, regeneration programmes, running the planning authority and corporate overheads.
1.8. The 2016-17 budget is balanced after delivery of savings targets. In the following three years, LLDC currently projects significant, albeit reducing, shortfalls of £9m, £7m and £6m and will seek additional savings and increased commercial income from sponsorship and exploitation of the Park to mitigate these. However, this will not bridge the funding gap and additional funding will have to be agreed with the GLA prior to the final December 2016 budget submission.
1.9. Over the long term, beyond the ten year horizon of this plan, LLDC’s strategy seeks to achieve financial sustainability independent of public subsidy.

2.1. The previous Ten-year Plan focuses on three key objectives: Park, Place and People. These have now been reframed as three strategic outcomes:
• Opportunity: to stimulate economic growth and improve life chances for people in and around the Park
• Community: to create a cluster of places on and around QEOP that have been designed with people at the heart (‘urban place-making’), and to do so in a way that is seen as exceptional
• Destination: to create the basis of a new metropolitan heart in east London that attracts people from across London, the UK and beyond
2.2. Acting as a catalyst and partner, LLDC will lead regeneration in and around QEOP through five business objectives:
• LIVE - Establish successful and integrated neighbourhoods, where people want to live, work and play
• WORK - Retain, attract and grow a diverse range of high quality businesses and employers, and maximise employment opportunities for local people
• VISIT - Create a diverse, unique, successful and financially sustainable visitor destination
• INSPIRE - Establish a 21st century district promoting cross-sector innovation, education, culture, sport, aspiration and participation in east London
• DELIVER - Deliver excellent value for money, and champion new models and standards which advance the wider cause of regeneration, in line with LLDC’s core values.
2.3. The Plan as proposed supports LLDC’s business objectives by investing in developments that will support regeneration, generate capital receipts, provide housing and other necessary infrastructure for the local area. The Olympicopolis development in particular supports the Corporation’s regeneration objectives and will generate 3,600 additional jobs, bringing £2.8bn net economic activity to the area.

3.1. QEOP lies in one of the most diverse areas of the UK. LLDC, as a public body, has a responsibility to promote equality, tackle discrimination and promote good relations between different groups of people with protected characteristics. For this reason, LLDC is about to undertake a strategic equality impact assessment on its renewed priorities, including its emerging five year organisational strategy and the Olympicopolis plans. As part of this process the Legacy Corporation will be consulting with equality groups and testing whether its approach is helping to promote its equality priorities and in accordance with its public sector equality obligations in section 149 of the Equality Act 2010.
3.2. As a GLA functional body, LLDC will also need to consider how it meets the Mayor's objectives within its work. This includes, in particular, the Mayor's Equal Life Chances for All strategy, where its objectives align with those of the Plan.

a) key risks and issues
4.1. The Ten-year Plan projections are highly sensitive to changes in development market conditions (eg. rates of house price and build cost inflation and developer appetite for risk), actual operating conditions in QEOP (eg. actual costs and revenues of the Park and venues, events programme and naming rights), and tax assumptions. These projections will be reviewed on an annual basis to inform future plans. The Ten-year Plan does not make any assumptions in respect of the payment of Corporation Tax. Further financial risks are set out in Part 2 of this Form.
b) links to Mayoral strategies and priorities
4.2. The Mayor's London Plan states that: ‘The Mayor will work with partners to develop and implement a viable and sustainable legacy for the Olympic and Paralympic Games to deliver fundamental economic social and environmental change within East London, and to close the deprivation gap between the Olympic host boroughs and the rest of London. This will be London's single most important regeneration project for the next 25 years.’
4.3. Approval of LLDC's Ten-year Business Plan is business critical to enable it to drive forward its ambitious plans for legacy and growth, and enable QEOP to act as a major economic driver to regenerate the wider area, which is essential to the delivery of this policy.
c) impact assessments and consultations
4.4. As set out in the Ten-year Plan, the LLDC's priority themes run through all its programmes, including:
• promoting convergence, employment and community participation championing equalities and inclusion
• ensuring high quality design
• ensuring environmental sustainability
4.5. Relevant GLA officials have been consulted, have provided feedback to the LLDC, and agreed revisions that have been incorporated into the updated Plan. The Legacy Corporation has consulted with its Investment Committee, prior to presentation of the updated Ten Year Plan, incorporating the annual 2016/17 budget to the LLDC Board on 10 March 2016, where it was approved without amendments.

5.1. The capital and revenue budgets and associated borrowing limits for 2016-17 to 2018-19 in the Ten-year Plan were included within the approved Mayor’s Final Consolidated Budget for 2016-17. GLA revenue support for core activities in 2016-17 is £17.2 million. The projected funding shortfalls of £9 million and £7 million in 2017-18 and 2018-19 respectively are based on assumed on-going GLA core support of £14 million per annum.
5.2. The GLA is also required to fund the Corporation’s net capital requirements, including an estimated £46 million in 2016-17, and is underwriting funding for Olympicopolis. Capital support is provided as loan funding which is repayable over the long term from capital receipts. Additional comments on financial risks, the long term capital position and revenue funding are included in part 2 of this report.

6.1. Under the terms of LLDC’s Governance Direction 2013, the Mayor's prior consent is required for the Legacy Corporation's three-year Plan. In this case, it was agreed to seek the Mayor's consent to a Ten-year Business Plan, incorporating the 2016-17 budget, following approval of the Plan by the Legacy Corporation's Board at its meeting on 10 March 2016.
6.2. The Mayor's consent is also required for the disposal of long-term interest in the land originally acquired by London Development Agency (and subject to the National Lottery Repayments Agreement). His consent will be sought before development agreements are finalised.