Londoners still paying £400m “tax bomb” on E20 London Stadium – Bassam Mahfouz AM
Londoners are losing £4 million every year through former Mayor Boris Johnson’s onerous contract letting out the London Stadium, according to information gained by Assembly Member Bassam Mahfouz.
There is at least a £4 million deficit that must be accounted for every year, for 99 years, Enver Enver, Interim Chief Finance Officer of the Greater London Authority, confirmed in response to questioning from Assembly Member Mahfouz.
The contract will see a total cost of almost £400 million to the public after former Mayor Boris Johnson used his authority to sign off on a 99-year contract in 2013.
The E20 stadium is currently owned by the London Legacy Development Corporation, which owns buildings used for the 2012 London Olympics, but is let out to West Ham United as their home ground. LLDC, part of the GLA family, is still obligated to pay the costs of running the stadium, including setting up the seating for games.
Speaking to the London Assembly Audit Panel, Mr Enver confirmed that Londoners still lose money for every football game hosted at the stadium, but through good management, the deficit had been reduced considerably over recent years.
The panel, which covers probity, good practice and risk at the GLA, identifies the cost of the E20 stadium as a risk every year as a result of these costs.
Bassam Mahfouz, London Assembly Labour Audit spokesperson, said:
“Londoners are paying the penalty of a £400m tax bomb thanks to another own goal from our former Mayor, Boris Johnson. Today’s evidence shows that Londoners are still paying £4 million every year to keep this stadium running – money that could be used for free school meals, investment in our public transport or to hire more police officers in our communities.
“Like many fans, I love seeing live football games in London, but it’s not right that Londoners are forking out £400m for the terrible contract signing of the former Mayor.
“Meanwhile, with a new manager at the helm, current Mayor, Sadiq Khan should be applauded for his work on reducing these costs and the work done to protect the legacy of our city’s Olympic games.“
Notes to editors
- Bassam Mahfouz is London Assembly Labour spokesperson on the London Assembly Audit Panel and represents the constituency of Ealing and Hillingdon.
- Evidence from Enver Enver, Interim Chief Finance Officer of the Greater London Authority, was given to the London Assembly Audit Panel, 15 July 2024. Transcript begins at 36.54:
Assembly Member Bassam Mahfouz: Just to get some clarity in terms of when it was signed, What was the scheme of delegated authority at that time and has that scheme of delegated authority changed as a direct consequence of that because it’s great to hear obviously that you’ve not signed off on any similar contracts subsequent to that during your tenure and the mayor hasn’t during his. So when did that happen and have there been changes to the SODA as a result of that?
Enver Enver: I don’t know the detail of when it changed. When it happened was some time between 2014 and 2016. The agreement was pretty much that every time the seating arrangement has to change to use the venue, E20 picks up the cost and that cost gets passed to LLDC. The governance at LLDC normally requires that such contracts come up to the LLDC board and we have LLDC liaison board and those conversations take place there, so we get sighted on any such contracts from now on. When that came in, I don’t know, it’s been in place since I’ve been around at least for over four years so the changes would have been made sometime between when that deal was signed and 2020. I don’t know the exact dates but I can find out if it makes a difference to you.
BM: So I guess the question really is about the scheme delegated authority and whether the processes were in place at the time, were they followed or not?
EE: Well they were followed because it was signed by the Mayor at the time, so it was signed at the highest authority. It was the Mayor, and that Mayor signed it.
BM: … In terms of the cost, the impact, the annual impact on the revenue for the GLA budget?
EE: It’s a minimum of £4m loss per year, if not more. I think the impact has been reduced to 3 or 4, certainly on my tenure it’s been about 3 or 4 but I think the gap was bigger before. We’ve done everything we can to bring down costs of running the venue, but every match costs us more money than when there isn’t a match so it costs more money to have a football game than not have a football game.
BM: So in your role you’ve got to currently budget for 4 million pound deficit in that particular area annually, for 99 years.
EE: At least. Yeah.