Boris exposed as lid is lifted on West Ham stadium deal
WEST HAM’S deal for the london Stadium was fully exposed by a damning report published yesterday that has detailed chronic mismanagement.
Forensic accountants Moore Stephens listed a ‘catalogue of errors’ that had led to an annual ‘bungled’ £20millionplus loss — nearly 10 times the £2.5m a year West Ham are paying in peppercorn rent.
The fallout from the fiasco will see london Mayor Sadiq Khan take over control of the stadium and Newham Council withdraw from the E20 partnership with the london legacy development Company (lldC) and City Hall at a loss of £40m.
Khan commissioned the review, which namechecked former london Mayor Boris Johnson for not responding to interview requests and london 2012 chairman lord Coe for declining to help, when the cost of transforming the athletics venue to a football ground rose from an unrealistic £190m to £323m.
The installation of retractable seating had been costed at £50,000 yet the price was £10m. Khan said: ‘What has been presented is simply staggering. It reveals a bungled decision-making process that has the previous Mayor’s fingerprints all over it.’
Khan laid into Johnson, now Foreign Secretary, and blamed him for the sky- rocketing transformation costs due to the retractable seating and the vanity project of staging Rugby World Cup games.
Khan said: ‘Boris Johnson clearly panicked when faced with legal challenges about West Ham and Newham’s joint ownership bid. He decided to re-run the bid process with the taxpayer footing almost the entire bill.
‘The fact he also failed to properly examine the transformation costs or the entirely inadequate estimates for moving the retractable seats leaves us squarely in the dire financial situation we are in.
‘It beggars belief that West Ham have got the deal of the century. They probably can’t believe their luck. Who can blame them for biting the hand off Boris when he offered them this deal. But why should the london taxpayer be subsidising a Premier league club?’
The lldC, backed by the Mayor, have been funding the stadium’s losses since July 2017, enabling the athletics World Championships to take place last summer and West Ham to begin their Premier league season.
Without this funding the E20 partnership between lldC and Newham would have entered administration. Yet the stadium is still forecast to lose another £24m in 2017-18.
Khan will be ‘ exploring all avenues’ around the deals with West Ham and UK Athletics, but is aware that little can be done legally.
A West Ham spokesman said: ‘As the report confirms, the concession agreement is a watertight, legally- binding contract signed in 2013 in good faith by West Ham United, who remain committed to its terms for the entire 99-year duration.’
It will not help the stadium’s financial crisis that West Ham’s annual rent will fall to £1.25m per annum should they be relegated.
The Moore Stephens report concluded that the deal did not represent financial value for money for the taxpayer.
It said: ‘ The decision to transform the stadium and to contract with West Ham was made on incorrect financial estimates and an insufficient appreciation of the critical commercial and financial risks. It is our opinion the financial estimates were incorrect because there were errors in their calculation, compilation and presentation.’