Olympics Consequential Funding
Working together through the Joint Ministerial Committee (JMC), the UK, Scottish and Welsh Governments and the Northern Ireland Executive have reached agreement on an inter-administration dispute concerning the application of the Barnett formula to funds set aside for regeneration and transport within the budget for the Olympics Games in 2012.
The issue was discussed at a plenary meeting of the JMC on 8 June 2011. That discussion helped to clarify unresolved issues in the dispute. It also confirmed administrations' shared interest in resolving those issues creatively and constructively with a view to ensuring the success of the 2012 Olympic Games. The meeting's communiqué noted agreement "to consider the matter further to examine ways in which progress [could] be made".
Following further consideration, administrations have agreed:
to reaffirm their shared commitment to the success of the 2012 Olympics and other major sporting events in the UK.
to reaffirm their shared commitment to the principles of good communication, close co-operation and mutual respect as the means of avoiding and resolving disputes, and to the use and benefit of the JMC's dispute-resolution protocol as set out in the Memorandum of Understanding between the UK Government and the devolved administrations.
the importance of learning lessons from all disputes in order to make them less likely to arise in the future. In this instance, they noted that agreement was reached in earlier discussions of this dispute that decisions on the application of the Barnett formula should "always be evidence based, be undertaken in a timely manner and in consultation with the devolved administrations". (This wording was agreed previously and is now included in HM Treasury's Statement of Funding Policy which was published alongside the UK Spending Review in autumn 2010.)
that there have been significant changes in public finances since this dispute first arose and that they should therefore not revisit decisions on the Olympics budget first made by the previous UK Government.
that the Scottish Government, the Welsh Government and the Northern Ireland Executive will receive a one-off sum equivalent to the Barnett formula consequentials of relevant changes to Olympics funding since the present UK Government took office in May 2010. These sums amount to £30.2m, of which the Scottish Government will receive £16m, the Welsh Government £8.9m and the Northern Ireland Executive £5.4m (rounded to the nearest £100,000).
the importance, firstly, of reviewing thoroughly the costs and benefits of the 2012 Olympic Games and other major sporting events in the UK and, secondly, of governments co-operating on and sharing such studies.
The question first arose in 2007 of whether the Barnett formula should be applied to regeneration and transport elements of Olympic funding. On 14 April 2010, the Scottish Government raised the issue as a formal disagreement with the UK Government under the protocol on "Dispute avoidance and resolution" which now forms part of the Memorandum of Understanding between the UK Government and the devolved administrations. The Welsh Government and the Northern Ireland Executive notified the UK Government of their wish to be parties to the disagreement on 30 April 2010 and 24 June 2010 respectively. The issue was escalated to a dispute under the protocol on 13 September 2010.