LDA may slash £100m of projects over three years

The London Development Agency is preparing to cut up to £100m worth of projects over three years in order to fill a black hole in its 2012 accounts.

Andrew Travers, the body’s director of strategy, resources and performance, told the London Assembly this afternoon [Tuesday] that it was reviewing all of its existing projects and programmes in order to identify potential savings to cover the shortfall.

Last month, forensic accountants from KPMG were called in after it emerged money due to be reserved as compensation for businesses forced to relocate from the east London site had not been set aside. Travers would not confirm the figure, but it has been widely reported to be between £60m and £100m.

Speaking at a meeting of a budget monitoring sub-committee, which had called him in to give evidence, Travers said: “We are looking at projects which are poor value for money and we are looking at the phasing of projects to see if they can be spread over a greater number of years.”

Travers came under a heavy grilling from GLA member Richard Barnbrook, who said: “Poor decisions and poor management have been allowed to go ahead.

“I would have thought with a games of this magnitude all of these things would have been ironed out before we went anywhere near bidding for the Olympics.”

To date, the London Development Agency (LDA) has paid more than £750m for its deals on the Olympic land. However, 72 of the 193 firms relocated are still in negotiations over compensation.

The committee also hit out at government plans to cut millions from the LDA’s budget in order to fund housing programmes. The body is facing cuts of up to £22m over the next two years.

Andrew Boff, a GLA member, said: “It would be an irony would it not if as a result of government cuts we had to reduce the number of affordable homes the LDA was providing in order for the government to provide affordable housing in other parts of the country.”

Travers said the LDA expected accountants KPMG to report back on their investigation towards the end of this month. Two members of staff, including director at the body's Olympic legacy directorate, Gareth Blacker, are on indefinite leave while the irregularities are investigated.