MD1492 LLDC’s Ten-year Business Plan incorporating 2015-16 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 under the Direction 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 2015-16 budget, following approval of the Business Plan and capital and resource budgets for 2015-16 by the Legacy Corporation’s Board at its meeting on 17 March 2015.

1.2 The Legacy Corporation’s annual budget for 2015/16 and revised Ten-year Business Plan have already been included in the Mayor’s draft final consolidated budget, which was considered and approved by the London Assembly on 23 February 2015.

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 the Legacy Corporation, and is intended to be a publically accessible statement of intent, with a ‘Resource Plan’ which will be updated at least every three years.

1.4 The Ten-year Plan reflects the acceleration of the 2nd phase of housing in the East Wick and Sweetwater neighbourhoods on the Park and associated social infrastructure, the completion of the Stadium conversion, and the resource implications of delivering the Olympicopolis vision for a major new cultural and higher education quarter in the south of the Park and the change of emphasis from housing to job creation that this entails. It also includes detailed financial forecasts, which are set out in Part 2 of this Form.

2.1 The Ten-year Business Plan focuses on three key objectives: Park, Place and People:

• PARK: a successful and accessible Park with world-class sporting venues offering leisure space for local people, arenas for thrilling sport, enticing visitor entertainment, and a busy programme of sporting, cultural and community events to attract visitors;
• PLACE: a new heart for east London, securing investment from across London and beyond, attracting and nurturing talent to create, design and make world-beating 21st Century goods and services, and becoming a place where local residents and new arrivals choose to live, work and enjoy themselves, and businesses choose to locate and invest; and
• PEOPLE: opportunities and transformational change for local people, opening up access to education and jobs, connecting communities and promoting convergence - bridging the gap between east London and the rest of the capital.

2.2 Over the next ten years, Legacy Corporation’s achievements, are expected to include:

• PARK: continuing the successful operation of Park and venues, building on high visitor numbers achieved to date by expanding its reach beyond east London, and attracting and hosting 15 major sports events/championships by 2017/18;
• PLACE: delivering the first 2,500 homes on the Park, creating 13,000 jobs through developments on QEOP, and building two high quality new schools;
• PEOPLE: ensuring local people benefit from, and contribute to, the success of QEOP, including through economic opportunity, community engagement, sports and cultural participation, ensuring a successful Paralympic legacy, and operating on a stable financial footing, without additional public subsidy.

3.1 QEOP lies in one of the most diverse areas of the UK. The Legacy Corporation 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, the Legacy Corporation 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, the Legacy Corporation 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

The Ten-year Plan projections are highly sensitive to changes in development market conditions (e.g. rates of house price and build cost inflation and developer appetite for risk), actual operating conditions in QEOP (e.g. actual costs and revenues of the Park and venues, events programme and naming rights), and tax assumptions and will be reviewed on an annual basis, to inform the preparation of future plans. The Ten-year Plan does not make any assumptions in respect of the payment of Corporation Tax. Further risks are set out in Part 2 of this Form.

b) links to Mayoral strategies and priorities

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”.

Approval of the LLDC’s Ten-year Business Plan is business critical to enable the Legacy Corporation 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.

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

As required under Paragraph 2.1c of the LLDC Governance Direction 2013 (approved under MD1227), the Mayor and the GLA must be consulted before LLDC approves a budget or business plan. 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 Audit and Investment Committees, prior to presentation of the updated Business Plan, incorporating the annual 2015/16 budget to the LLDC Board on 17 March 2015, where it was approved without amendments.

There are no further impacts, or requirements for consultation, arising from this specific decision.

5.1 The Legacy Corporation’s capital and revenue budgets for 2015-16 and 2016-17 in the Ten-year Plan reflect what was included in the Mayor’s final draft consolidated budget. GLA support for the Legacy Corporation’s capital requirements will be provided as loan funding since repayments are anticipated over the period of the Plan from the capital receipts generated from the development of the Park, and this is reflected in the proposed borrowing limits for the Legacy Corporation. These cashflows have been taken into account in the GLA’s long-term budget projections. Further confidential financial comments are contained in Part 2 of this Form.

6.1 Under the terms of the London Legacy Development Corporation 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 2015-16 budget, following approval of the Plan by the Legacy Corporation’s Board at its meeting on 17 March 2015.

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