FINANCE AND SUPPORT SERVICES OVERVIEW AND SCRUTINY
30TH JANUARY 2006
GREATER LONDON COUNCIL BUDGET AND PRECEPT -
LONDON DEVELOPMENT AGENCY – ISSUES
The LDA is one of nine Regional Development Agencies and acts as the
Mayor’s agency for business and jobs in London
The Mayor’s Economic Development Strategy published in 2005 now
provides the strategic framework for the economic of the capital for the
next ten years.
The LDA’s activities are met entirely from specific grants and capital
receipts and therefore the LDA does not make a call on the GLA precept.
It is difficult to monitor the activities, performance and expenditure of the
LDA over any period.
No comprehensive and comparative information has been published on
the LDA – the presentation of financial information changes and varies
from year to year.
For example, the 2005/06 Consolidated Budget gives the LDA’s
expenditure as £379.5 million, whereas the 2006/07 budget consultation
document gives the expenditure for 2005/06 as £434.7 million!
The budget consultation document does not provide any subjective
expenditure analysis for the LDA; no detailed analysis of the growth, new
initiatives, savings, and efficiencies (this information is provided for the
MPA, LFEPA and TfL in the 2006/07 budget consultation document).
There are serious difficulties in determining the performance and real
expenditure of the LDA on the basis on the information provided.
There is no comprehensive list of projects funded or major new initiatives
in the 2006/07 budget consultation document or the LDA Corporate Plan
LDA’s Budget and Precept Requirement 2006/07 - Issues
Total programme expenditure is planned to fall from £403.2 million in
2005/06 to £391.7 million in 2006/07.
The LDA is undertaking much of the initial preparatory work for the
Olympic Games. It has been agreed to limit expenditure on the Games to
25% of its total budget.
The LDA has a number of projects to deliver as the interim Olympics
Delivery Agency. These are estimate to cost £66 million, of which the
Government will fund £52 million.
It is understood that the LDA have failed to provide the London Assembly
with information to satisfy them that expenditure in relation to Olympic site
assembly is under control.
The draft budget only gives very general information on the proposed
expenditure on the Olympic Games. There is no information on the LDA’s
spend on buying and remediating land; relocation of businesses; and the
work as interim ODA.
There is no detailed analysis on the LDA’s expenditure in relation to the
development and regeneration of the “Thames Gateway” in the 2006/07
The LDA has plans to set up representative offices in Beijing and
Shanghai. This may cost £3.7 million over the next three years. There is
a need to ensure that such initiatives result in measurable outcomes.
Details are also required on the actual expenditure on these initiatives.
There is no information on the LDA’s tourism programme following the July
terrorist attacks. It is not clear whether additional resources have allocated
to promote tourism.
The LDA is required by the Treasury to deliver 2.5% efficiency savings per
annum. There no information about how this target is to be achieved.
There is a presumption, by the LDA, that administrative costs will be held
flat against an expanding programme of activity.
It is understood, (but there is no confirmation of this in the 2006/07 draft
budget), that the LDA is to reduce programme duplication, reduce
spending on consultants and to introduce more joined up marketing and
LDA – Gross Expending and funding analysis 2000/01 to 2006/07
As already noted is impossible to present, any meaningful analysis of LDA
activity and expenditure over the period 2000/01 to 2005/06. Programme
descriptions change from year to year and different and conflicting
expenditure figures have been published for individual financial years. There
is no consistent set of data. The attached table is based on the Mayor’s
Consolidated Budget documents 2001/02 to 2005/06 and the consultation
budget document for 2006/07.
49.1% increase in Gross Expenditure
61.6% increase in Government specific grants.
Budget and precept requirement has always been nil.
Gross Expenditure and funding analysis of the LDA 2000/01 to 2006/07
2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07
£m £m £m £m £m £m £m
Gross 283.4 308.4 300.2 337.8 343.0 392.0 422.5
Specific Grants -261.3 -308.4 -300.2 -337.8 -343.0 -392.0 -422.5
Other Income -22.1 -0.2 -0.2 -0.2 -0.2 0.0 0.0
Net Expenditure 0.0 -0.2 -0.2 -0.2 -0.2 0.0 0.0
Use of Reserves 0.0 0.2 0.2 0.2 0.2 0.0 0.0
Budget 0.0 0.0 0.0 0.0 0.0 0.0 0.0
RSG/NNDR 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Council Tax 0.0 0.0 0.0 0.0 0.0 0.0 0.0
£ £ £ £ £ £ £
Precept at Band 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Annex: Key Projects 2005 to 2008
Bernie Grant Centre
Stephen Lawrence Centre
Carnival Development Agency
Diversity Works campaign
Feasibility study for building a lesbian and gay museum
2012 Olympic Games
The skills agenda for London
Training and business support
Initiating and supporting economic inclusion projects designed to support equality
Source: LDA Corporate Plan 2005 - 2008