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Cash prospects look bleak' for City Hall in run-up to 2012 Olympics

PUBLISHED: 13:00 23 October 2009 | UPDATED: 15:07 05 October 2010

THE financial prospects for London's economic development in the run-up to the 2012 Olympics are bleak,' a London Assembly report out today warns. The London Development Agency's budget next year is only 60 per cent of what it expected

<By Mike Brooke

THE financial prospects for London’s economic development in the run-up to the 2012 Olympics are bleak,’ a London Assembly report out today warns.

The recently-identified £159 million shortfall in the London Development Agency’s land commitments has both damaged its reputation and significantly reduced its resource, says the Assembly’s pre-budget report.

The shortfall and the expected cuts in Government grants mean the Development agency is losing a fifth of the resources it expected next April. It is likely to have only 60 per cent budget for 2010-11.

Budget committee chair John Biggs, whose East London constituency includes the massive Olympics site at Stratford, said: “The LDA’s task is helping Londoners through this tough economic time.

“But given the reduced resources, our confidence in its ability to produce accurate budgets has been dented.”

The report warns that pressure on all GLA-funded bodies will increase in the 12 months up to April 2012 and beyond, including the LDA and Transport for London.

The Mayor will need to balance his urge to limit the financial burden on council taxpayers with his priority to maintain transport and other public services such as police and fire, the committee urges.

The Assembly is calling on him to make the case for London’ to Whitehall to ensure public services are financed adequately.

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