I have today finalised a funding settlement for the Greater London Authority to reflect its new housing and regeneration responsibilities from April 2012. These new responsibilities, as a result of the London reforms in the Localism Act 2011, represent a major decentralisation of power away from Whitehall to London government, enabling the capital to manage its own affairs.
The London reforms will: devolve the activities of the Homes and Communities Agency in London to the authority; abolish the London Development Agency and fold in its activities to the authority; and enable the Mayor of London to establish a mayoral development corporation to oversee the long-term development of the Olympic park and surrounding area.
My Department will provide £3 billion funding to the Greater London Authority for its new responsibilities over the spending review period up to 2014-15, incorporating relevant funding from other Departments. The funding will enable the authority to support the housing programmes it will inherit from the Homes and Communities Agency, the closure of the London Development Agency, and Olympic park transformation and legacy, as well as its existing functions.
This funding will consist of £390 million resource funding (including funding already determined for 2011-12 through the general grant to the authority) and £2,593 million capital funding, of which £1,941 million has been made available to support the housing programmes being transferred from the Homes and Communities Agency. £141 million of the resource from future years will be provided this financial year to enable the authority to restructure the £360 million Olympic land debt it will inherit from the London Development Agency.
The current Olympic land and debt deal, first agreed in March 2010, will also be replaced by new receipt sharing arrangements for the Olympic park to reflect the devolution of Olympic legacy to the Mayor. These new arrangements will enable: the Greater London Authority to fund any further capital investment in the park and surrounding area, as well as cover the repayment of the residual debt the authority will inherit from the London Development Agency; and national lottery distributors to be reimbursed for their additional £675 million contribution to Olympic public sector funding package.
The Homes and Communities Agency’s land and property assets in London (other than Greenwich peninsula) will be transferred to the Greater London Authority at nil consideration on the basis that this reform is a machinery of government change. Receipts from Greenwich peninsula will be shared equally between the authority and my Department reflecting significant national investment in this major site.
A copy of the funding settlement letter from my Department to the Greater London Authority, which provides further details, has been placed in the Library of the House.