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Following more than two years of rising budgets, collapsible stadiums and shrinking aquatics centres, the focus of the Olympic Games is now starting to turn to September 2012, when the world’s attention will have turned away from London and the city no longer has need of an Olympic Park.

But as the legacy work gets under way, the scale and complex nature of the task ahead is becoming more apparent. The bid document promised that the Olympic Park would bring about the regeneration of east London, and in particular the entire Lower Lea Valley. “The Olympic Park will become a hub for east London,” it enthuses, “opening up opportunities…. across the UK and London, but especially in the Lea Valley and surrounding areas.”

Many involved are concerned, however, that unless funding, timing and strategic issues are addressed, investors and developers will be put off from working in the area – severely limiting the extent of possible regeneration beyond the Olympic Park.

“The legacy plans depend on the take-up from the private sector,” says Martin Venning, a spokesperson for the London Thames Gateway Development Corporation (LTGDC), which is responsible for regenerating the Lower Lea Valley. “We are confident, but we don’t know for sure how far they will invest. We couldn’t have predicted this economic downturn.”

How far the private sector will invest will depend in no small measure on its confidence in those responsible for the Olympic legacy and that their competence lives up to the grand visions of the bid documents.

Cllr Paul Bricknell, executive member for Olympic opportunities in Newham, envisages ambitious plans for east London post-2012. “We have to stop thinking about this as just part of the Olympics and start thinking about creating a whole new area of London,” he says. “But deciding how to go about a co-ordinated approach is a problem at the moment – there is a genuine tussle here.”

The worry is that the private sector will think, gosh, this is bloody complicated – who can I have confidence in?

Paul Bricknell, Newham council

The “tussle” that Bricknell refers to is the crowd of public bodies working in the area, each of which has a say in how the plans should proceed. There’s the London Development Agency (LDA), the LTGDC, the Olympic Delivery Authority, the Greater London Authority (GLA), the Department for Culture, Media and Sport, Design for London, DCLG, the Lee Valley Regional Park Authority and last, but definitely not least, the five host boroughs: Hackney, Newham, Tower Hamlets, Waltham Forest and Greenwich. That makes 13 in total.

As those who work in regeneration are acutely aware, too many stakeholders can spoil the scheme. “It’s an understatement to say the institutional set-up is complicated,” says Bricknell. “It encourages central bodies and local authorities to jockey for position.”

The main point of contention will undoubtedly be which of them will pay for the legacy. Strains on the relationship are already beginning to appear. Sir Robin Wales, chief executive of Newham, has made clear that his council will not foot the bill for any additional leisure facilities for the aquatics centre in legacy mode. He is only prepared to pay for capital projects built specifically for the community, while Hackney mayor Jules Pipe has said his council will not take on “long-term revenue costs”.

To add to the confusion, there is no set overall budget at the moment. The host boroughs are pushing for a fixed sum, with assurances that it will be protected against further pressure from games-related costs. In a submission to the ongoing DCMS London 2012 select committee inquiry, the host boroughs have also raised concerns that the LDA’s responsibility to reimburse money borrowed to buy the Olympic Park land could destabilise plans for sustainable development. They fear that too many homes could be built in too small a space, to drive up land values.

It states: “We are particularly concerned to ensure that in a desire to generate revenues, principally to repay the HM Treasury and the Lottery, this does not place unacceptable pressures on the development of the area, leading to unacceptable densities of housing development and/or inappropriate forms of economic activity undermining the ability to create sustainable communities.”

The mayors’ regeneration adviser, Neale Coleman, has already said that London’s 50% affordable housing target might have to be compromised to get a better deal on land values.

Legacy plans depend on the private sector. We don’t know how far they’ll invest. We couldn’t predict this downturn

Martin Venning, LTGDC

Industry observers have compared the situation to that of the Thames Gateway – known for its numerous public bodies constantly fighting to protect their own interests. One source at a volume housebuilder said: “What we have here is a microcosm of the problems that beset the Thames Gateway. You’ve got loads of quangos, regulatory bodies and bureaucrats all with their own targets.”

Manny Lewis, chief executive of the LDA, argues that all the organisations have to stay involved. It is essential, he says, that everyone’s voice is heard to create a truly sustainable area for generations to come.

Bricknell isn’t convinced the private sector will agree, however. “The worry with the situation as it is,” he says, “is that the private sector will think, gosh, this is bloody complicated – who can I have confidence in? Who am I supposed to talk to?”

Get the timing right

Architect John Woolstencroft, founder of Stock Woolstencroft, is working on 10 schemes in what he refers to as the “Olympic halo”, the ring of opportunities around the park. He has also just secured planning permission for the first major project next to the Olympic Park – a 655-home scheme including a 43-storey tower and a four-star hotel on Stratford High Street. He believes one of the main challenges ahead is to get the timing of development right.

Woolstencroft is concerned the appointment of legacy masterplanners has come too late. The masterplanning consortium, made up of Dutch firm KCAP and original Olympic masterplanners EDAW and Allies & Morrison, will submit an outline planning application towards the end of 2009 – three years before legacy work will begin in earnest. Woolstencroft says this is not enough time and the overall masterplan should have happened 18 months ago.

There is a lot of concern about the deadline – a lot of rubbing of chins and shaking of heads

Housebuilder

Furthermore, the consortium’s work is meant to provide “a strategic framework for the improvement and development of the Olympic Park area and its environs”. What is not clear is what this means. Officially, the consortium has been commissioned to masterplan just the Olympic Park, but this cannot happen in isolation. One of the key issues in this regeneration scheme is how to make the Olympic Park, a self-contained unit during the games, face outwards and join up with the rest of the Lower Lea Valley.

“A lot of the schemes in the Olympic halo are going ahead already so will have to be taken as they are,” says Woolstencroft. “There are already a whole load of local development frameworks and various masterplans already in place for the sites in the Olympic halo.”

The LDA insists integration is not a problem and says it is working with the LTGDC, host boroughs and local landowners on these Olympic fringe masterplans.

Projects need to be planned now in order to be built on time, says Woolstencroft, not least because of the predicted shortage of workers and subcontractors in the area nearer 2012.

One housebuilder, who asked not to be named as it could jeopardise his company’s current work in the area, said a number of developers felt there was a terrible cloud of dread over the Olympics. “Time is running out,” he says. “In terms of development, 2012 is around the corner. There is a lot of concern about it – a lot of rubbing of chins and shaking of heads when we look at what needs to be done in the timescale we have.”

Yet despite widespread concern about how little time there is, consultants are being told by planners to wait a while longer. One architect source says: “The message I am getting from planning authorities is they are concerned about the prematurity of these schemes and they want to wait for the official masterplan. But this creates uncertainty in the development world. It turns developers off and drives them away from investing in the area. They don’t have time to wait.”

Planning authorities. want to wait for the masterplan. But this turns developers off and drives them away

Architect

Fixed S106 tariff

Telford Homes is a housebuilder already working in east London on a mixed-use scheme close to the proposed Olympic media centre in Hackney Wick. Chief executive Andrew Wiseman says the project is having a hard time in planning as Hackney council has taken objection to it, despite the fact the GLA has given it the thumbs-up. But these are the least of his worries. His thoughts are on future projects – and whether he will have any land to build on.

The LTGDC, which has planning powers in the Lower Lea Valley, has recently introduced a fixed S106 tariff, which presently equates to about £10,000/unit but could double in future years. This money will go towards infrastructure costs incurred by the projects.

Wiseman believes it will deter landowners from selling their plots. “The charge comes off the land price so will put them off selling,” he says. “At the least, it will slow things down.”

And Wiseman is not alone. In a letter to the LTGDC, the Home Builders Federation has outlined several objections to the tariff, including paying a retrospective charge on homes already built if land values rise substantially.

Over at the LTGDC, Venning counters that the set tariff was brought in to encourage private sector investment as it will speed up the process by getting rid of any confusion over costs. He admits that not everyone will share this point of view, but insists the LTGDC will apply this S106 where necessary and the market will adjust.

Observers have pointed out that, if this tariff is kept in place for the legacy work in the Olympic Park, land values could plummet and the LDA might not recoup the money it borrowed to buy the land in the first place. It all depends on the planning authority and if it applies the tariff but, surprisingly, it is not yet known who that will be. The ODA has immediate responsibility for the site post-games, as it has to get the site ready for legacy work, but who will do what is not yet known.

An ODA spokesperson said: “The ODA’s budget and scope of works covers the transformational works immediately after the games. These works will either be delivered by the ODA or by an agreed legacy delivery organisation using funding included in the ODA’s budget.”

No one doubts there is a huge amount of work to do to transform the Lower Lea Valley into the rosy scene envisaged in the Olympic bid document. Private sector buy-in will be crucial, but the jury is still out on whether enough is being done to attract it.