The cancellation of planned showpiece events at London Stadium last year will help save the London taxpayer £7.4m, a new report has found.
The document looks at the London Legacy Development Corporation's (LLDC) handling of the Queen Elizabeth Olympic Park, including West Ham's home ground.
It shows how costs fell as the Covid-19 crisis led to events, most notably Major League Baseball in June 2020 and athletics' Anniversary Games the following month, being called off.
Despite a reduction in trading revenue of 30% across the park, the report says London Stadium is responsible for 70% of the £7.4m spending reduction demanded by the Greater London Authority and expected to be made this financial year.
The report says this is evidence of medium-term "structural funding pressures" and that "it saves the LLDC money when it's not running events".
However, the report also suggests the general financial outlook of the park is a "ticking time bomb" for the next London mayor.
Some of the findings in the 22-page report, compiled by the London Assembly's all-party Budget and Performance Committee, are vehemently disputed by the LLDC.
London mayor Sadiq Khan took control of the LLDC in 2017 after a critical independent review highlighted the negative financial impact of deals agreed over London Stadium in particular, which date back to Prime Minister Boris Johnson's time as mayor.
Cutting losses by closing
London Stadium, which is owned by E20 - a wholly owned subsidiary of the LLDC - is the most visual reminder of the 2012 Olympic Games.
Now home to Premier League side West Ham and UK Athletics, it costs money for the capital's taxpayers - like other venues used for the Games.
The report states future estimates for annual losses are between £8m and £10m, which would increase by £1.5m should the Hammers be relegated into the Championship.
However, it argues these estimates are optimistic given the stadium lost £29m in 2019-20 and says provision remains in the LLDC accounts for £200m, which it says is to cover further losses.
The report also states there has been "limited progress" in efforts to find alternative sources of stadium income, including a naming rights sponsor, the search for which has already cost nearly £450,000.
Rising costs and missing targets
The report says the decision to press ahead with the East Bank project now looks "hugely risky".
Built on three sites close to London Stadium and the Aquatics Centre, the idea is to create a "culture and education" district that it is hoped will bring an additional 1.5 million visitors to the Olympic Park and generate £1.5bn for the local economy.
Work began in 2019 and when completed it will incorporate, among other things, a Sadler's Wells dance theatre, two new Victoria and Albert Museum sites and BBC recording studios, together with university campus sites.
However, the report states that on 8 December, LLDC revealed the overall estimated cost had risen 63% from £385m to £628m. LLDC disputes this and says the report has exaggerated the cost by £100m.
This figure, it is claimed, was based on the belief social distancing measures would have finished by now, so the overall cost is likely to be far higher.
In addition, the LLDC has committed to building 33,000 new homes across five sites by 2036. The report says just over 10,000 of these have already been built, at Chobham Manor and East Wick.
"The land owned by LLDC provides a real opportunity to address the affordable housing issue in London, yet that opportunity is going to waste," says the report.
Threat of an Olympic 'albatross'
The LLDC's difficult financial position is laid bare at the end of the report.
Overall income from the entire Queen Elizabeth Olympic Park site is £15.2m. While total expenditure in the last financial year was £65.7m, the financing costs alone - which go back into the Mayor's budget rather than to an external body - accounted for almost as much as the income at £13m.
Recommendations for addressing these issues are not due to be released by the report's authors until the spring.
"There is no extra few quid lurking under the sofa for LLDC when it runs out of money," it says.
"Many former Olympic parks across the world have turned into derelict, costly disasters.
"There is now a real threat that the very issue that was meant to be different this time around will be repeated, and that the capital will be bearing the legacy of a costly, taxpayer-funded albatross, hanging around the neck of Londoners for decades to come."
A spokesperson for the Mayor of London said he he has been working with the LLDC to fix a "catalogue of appalling errors left by his predecessor that left the taxpayer to foot an annual loss of around £20m.
"The Mayor has made significant inroads to reduce the burden of the stadium on taxpayers."
A LLDC spokesperson said it was disappointed by the "lack of context and errors in the report".
They added: "Regeneration is vital at this time in creating jobs, neighbourhoods and investment.
"The 2017 World Athletics Championships, hosted at the stadium, alone brought in more than £100m of spend."
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