London 2012 and sport agencies hit with £88m cuts

Britain’s sports funding agencies, including SJA sponsors UK Sport, and the London Olympic organisers are to be subjected to £88 million-worth of cuts in Government funding, the new coalition announced today.
[Updated at with UK Sport statement at 3pm]

UK Sport, Sport England and UK Anti-Doping will have to make 3 per cent budget cuts, in common with their managing government Department of Culture, Olympics, Media and Sport. The department and its quangos are expected to save £61 million, while £27 million is being cuts from the budget of the Olympic organisers.

The cuts were announced today as part of Chancellor George Osborne’s programme of £6 billion public spending cuts.

Just two weeks ago, on taking office as COMS Secretary of State, Jeremy Hunt announced that he had been told by Prime Minister David Cameron that the London Olympics “are our No1 priority”.

Last week, Boris Johnson, the Conservative Mayor of London, described potential cuts to the Olympic budget as a “false economy” both for the Games and for regeneration of the city, following previous economies made to 2012’s £9.3 billion budget in the face of the difficult commercial economy.

Tessa Jowell, Hunt’s predecessor as Olympics minister, warned of “profound consequences” and “enormous risks” to the Games if long-term cuts were imposed.

Today, Hunt maintained that the savings should not interrupt the Olympic programme and that frontline services should be protected. The main savings should come from cutting administration costs and restrictions on recruitment and pay.

It may be that much of the Olympic savings will be found from the as-yet-unspent portion of 2012’s £2.7 billion contingency fund.

Hugh Robertson, the sports minister, said today, “The government remains 100 per cent committed to delivering London 2012 on time and to budget. However, given the economic position, no part of government can be immune.”

In a statement issued this afternoon, a spokesman for UK Sport said: “UK Sport is committed to making our fair contribution to the Government spending savings announced today. UK Sport runs a very cost efficient operation already, but we understand that everyone has to play their part and that we are not immune to the current financial situation.

“We will look to make these savings without compromising our direct support for the preparation of Britain’s elite sports and athletes during this crucial period in the build up to London 2012.”

Earlier, the Olympic Delivery Authority chairman, John Armitt, had said he was sure the savings could be made without affecting the programme.

“Due to strong financial management and cost control to date the project is on a sound economic footing and I am confident that the ODA will be able to save £27 million from our budget this year,” he said. “This saving will be found by continuing to make efficiencies in the way the project is delivered as we have already done in the past.

“This is possible due to the efficient way that they project has been managed. Our regular budget updates have consistently shown that we are on schedule and within budget with savings of around £600 million already delivered to keep us on track.”

The sports agencies and Olympic organisers may yet be subject to further cuts when the government conducts a spending review in March 2011. It is speculated that the continued funding of smaller state-funded agencies such as the Youth Sport Trust and Women’s Sport Foundation may come in for close scrutiny under that review.