London's regional development agency to use 25% of its regeneration funds to pay for Olympic bid.
The London Development Agency will slash its core budgets by 25% to fund its £250m commitment to the London Olympics – potentially undermining the massive Thames Gateway regeneration programme.

The LDA will divert funds from its £300m-a-year budget to acquire land over the next four years in the Lower Lea Valley, east London, for the Olympic bid. This will mean that it will spend only three-quarters of the money it had earmarked for the Thames Riverside area in Essex, viewed by many regeneration experts as the key to developing the rest of the Gateway area.

The government has stated that it wants to build 200,000 homes in the Thames Gateway. Tony McBrearty, the chief executive of regeneration body the Thames Gateway London Partnership, said the Thames Riverside was vital to these plans, as it would house massive transport infrastructure, such as CrossRail and the Docklands Light Railway extension.

McBrearty said: "The LDA is raiding all the budgets it can. All of these programmes that are due to take place will at best be held up because of an Olympic bid. The focus will switch to the Olympic area."

A source close to the London Riverside redevelopment added that the major problem would be the transfer of senior staff concentrating on Thames Riverside to the Olympic project.

It is also rumoured that the LDA has considered handing over its responsibilities for the area, which include buying and decontaminating land, to regeneration quango English Partnerships, but EP has denied that it is in talks.

LDA board member Andrew Pelling confirmed that LDA budgets would have to be cut to fund an Olympic bid. He said: "Is there really enough money for land assembly without taking money from other programmes?"

Despite concerns from regeneration experts, a spokesperson for the LDA argued that any money spent in east London would ultimately benefit the Thames Gateway. She said: "We view it as a catalyst for regeneration. Anyway, any funds available for new programmes will not fall below 75% of what would otherwise have been available."

The LDA is planning to restructure itself, after the government's announcement that it intends to set up an urban development corporation in London to oversee half of the Thames Gateway development. The UDC would have special planning powers, and its establishment is viewed by some as indicating the failure of the LDA to co-ordinate the development of east London.

An industry source said: "The UDC was a critique of the performance of the LDA, which is responding to that by restructuring. There will now be a strong number two to the chief executive, providing him with stronger support."

n American businesswoman Barbara Cassani was this week appointed to head the London Olympic bid.

Fears over housing quality

Cabe, English Partnerships and the Housing Corporation are establishing a forum to ensure that the government’s housebuilding programme is not undermined by poor design quality. The move follows concerns that building homes rapidly to meet government targets could result in low quality living environments. Of particular concern is the Thames Gateway, Europe’s largest brownfield area and the site of plans to build 200,000 homes. The forum will focus on the four regions earmarked for growth: Stansted, Milton Keynes, Ashford in Kent and the Thames Gateway. Private and affordable housing providers, local authorities and other leading regeneration players will also be invited to join the forum to put forward their views.