DD2257 London Legacy Development Corporation: financial assistance

Type of decision: 
Director's decision
Code: 
DD2257
Date signed: 
19 June 2018
Decision by: 
Martin Clarke, Executive Director of Resources

Executive summary

This decision seeks a general consent for the London Legacy Development Corporation (‘Legacy Corporation” or “LLDC”) to give financial assistance under sections 213 and 220 of the Localism Act 2011 (“the 2011 Act”) to E20 Stadium LLP (“E20 LLP”) and its suppliers in the form of a guarantee for, or being jointly and severally liable with E20 LLP under, any contract let by E20 LLP for works, supplies and/or services at the London Stadium with an estimated value of up to £10 million and subject to the other conditions stated in this Director’s Decision paper.

Decision

That the Executive Director of resources approves the Legacy Corporation providing financial assistance to E20 LLP and its suppliers pursuant to sections 213 and 220 of the 2011 Act in the form of a guarantee for, or being jointly and severally liable with E20 LLP under any new contract let by E20 LLP for works, supplies and/or services at the London Stadium with an estimated value of up to £10 million, provided that the GLA is notified in writing of any such financial assistance and subject to the other conditions stated in the General Consent attached at Appendix A.

Part 1: Non-confidential facts and advice

Introduction and background

Section 213 of the 2011 Act states that ‘an MDC [Mayoral Development Corporation] may, with the consent of the Mayor, give financial assistance to any person’. This means the provision of financial assistance from the Legacy Corporation, of whatever size and in whatever form, whatever the source of its funding, must be approved by the Mayor before it is made. This includes the situation where LLDC provides an express guarantee or becomes jointly and severally liable with E20 LLP under, any contract let by E20 LLP. Section 220 of the 2011 Act permits the Mayor to give a general consent, including unconditionally or subject to conditions.

LLDC has a general consent in place for giving financial assistance by grant (DD1245).

The Mayor consented in July 2012 (MD971), under section 212(2) of the 2011 Act, for LLDC to form an interest in a limited liability partnership – E20 Stadium LLP (E20 LLP) – with Newham Legacy Investments Limited (a wholly owned subsidiary company of the London Borough of Newham (“NLI”)). The Mayor consented in November 2017 (MD2201) to a change in ownership of E20 LLP, including consent to LLDC entering into any necessary agreements relating to NLI’s retirement from E20 LLP and consented, under section 212(2) of the Localism Act 2011, to the LLDC establishing a subsidiary company, Stratford East London Holdings Ltd, which became a member of E20 LLP following NLI’s retirement from the partnership. As a result E20 LLP is a wholly owned subsidiary of the LLDC.

Approval is being sought for a general consent for LLDC to give financial assistance to E20 LLP and its suppliers in the form of a guarantee for, or being jointly and severally liable with E20 LLP under any new contract let by E20 LLP for works, supplies and/or services at the London Stadium subject to the conditions stated below (which is outside the scope of DD1245).

The conditions referred to in paragraph 1.4 above are:

• the LLDC has undertaken an assessment of the impact of not providing a guarantee;
• the LLDC has assessed compliance with all applicable regulations, including any potential State aid rules, before giving the proposed financial assistance;
• the contract is for any new works, supplies and/or services at the London Stadium;
• the proposed works, supplies and/or services are within the approved budget;
• the estimated contract value at the time of award is equal to or less than £10m; and
• the LLDC has notified the GLA in writing each time financial assistance is given pursuant to the general consent sought under this Director’s Decision paper.

These requirements are set out in the LLDC General Financial Assistance To E20 Stadium LLP Consent 2018 at Appendix A.

Subject to the conditions set out in paragraph 1.4 above and in this Director’s Decision report, the provision of any financial assistance by the LLDC will be at the LLDC's absolute discretion.

Objectives and expected outcomes

E20 LLP will be able to provide financial assurance to suppliers who require it and therefore enable E20 LLP to continue letting contracts for works, supplies and services at the London Stadium to tenderers with the most economically advantageous tenders.

Equality comments

LLDC has invested in delivering a multi-use Stadium at the heart of Queen Elizabeth Olympic Park that supports the LLDC’s priority themes.

The GLA must have due regard to the need to eliminate unlawful discrimination, harassment and victimisation as well as to advance equality of opportunity and foster good relations between people who share a protected characteristic and those who do not under section 149 of the Equality Act 2010. This may involve, in particular, removing or minimising any disadvantage suffered by those who share a relevant protected characteristic, taking steps to meet the needs of such people; and encouraging them to participate in public life, or in any other activity where their participation is disproportionately low, including tackling prejudice and promoting understanding. The protected characteristics and groups are: age, disability, gender reassignment, pregnancy and maternity, race, gender, religion or belief, sexual orientation and marriage/ civil partnership status. Compliance with the Act may involve treating people with a protected characteristic more favourably than those without the characteristic.

No adverse impacts on equalities issues or any protected characteristic groups are anticipated as a result of the proposals set out in this form.

Other considerations

a) Links to Mayoral strategies and priorities

This proposal will support the Mayor’s commitments to:

• build on the success of the Olympics and attract more global events to the city
• rebuild our Olympic Legacy, promoting and supporting sport for more people of all ages

b) Impact assessment and consultations

LLDC has consulted the GLA on the matter. It is not considered that the Mayor need undertake any additional impact assessment or consultation in respect of this decision.

Financial comments

The provision of a guarantee by LLDC is conditional as set out in paragraph 1.5 which includes that the proposed works or services are within approved budget. As principal funder and ‘lender of last resort’ of LLDC the GLA is already exposed to any financial risks and LLDC does not consider that this increases its commercial risk.

Planned delivery approach and next steps

If required, and subject to the conditions stated in this Director’s Decision paper, LLDC will provide financial assistance to E20 LLP and its suppliers in the form of a guarantee for, or being jointly and severally liable with E20 LLP under, any contract let by E20 LLP for works, supplies and/or services at the London Stadium.

Activity table

Activity

Timeline

General consent for financial assistance in the form of guarantee granted

June 2018


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