1. The Department for Culture, Media and Sport (the Department) has a strategic objective to achieve a sustained improvement in UK sport before, during and after the London 2012 Games, in both elite sport and grassroots participation. UK Sport, which is sponsored by the Department, is the government body with responsibility for leading the development of elite sport. Their shared goals for London 2012 are for Great Britain to finish fourth in the Olympic medal table and second in the Paralympic medal table. They also aim to build a legacy for elite sport in the UK once the Games are over.[3]

2. To support these goals, the Government has agreed a funding package of £722 million from April 2006 to March 2013, doubling the direct funding for elite sports and athletes from £300 million to £600 million. The money will come mainly from the Exchequer and the National Lottery, with £100 million to be raised from the private sector. UK Sport funds elite athletes through its World Class Performance programme in two ways. It funds the governing body responsible for each Olympic and Paralympic sport to provide a range of support to its athletes, including coaching, training, sports clothing and equipment, and sports science and medicine services. It also makes personal grants to athletes to help them prepare for elite events, covering their basic living expenses and equipment, as well as training costs not covered by the governing body. At the time of our hearing, UK Sport was funding some 1,400 athletes[4] it considered likely to win Olympic or Paralympic medals or to have the potential to do so.[5]

3. After the Athens Games in 2004, UK Sport adopted a funding strategy based on the principle of 'no compromise', concentrating funding primarily on those sports and those athletes most likely to win medals. In deciding which athletes to fund for the Beijing Games in 2008, UK Sport has been proactive in withdrawing or increasing funding to sports based on a range of factors, including performance. Figures 1 and 2 shows how much money sports received from UK Sport for the Athens and Beijing Olympic cycles, together with the number of athletes that UK Sport currently funds on its podium programme. These are athletes UK Sport considers most likely to win medals in the next four years. UK Sport's funding decisions are principally based on an assessment of each sport's current performance and future potential. It has also made strong governance and financial stewardship a condition of funding for each governing body.[6]

Figure1: UK Sport's funding of and athlete numbers competing in Olympic Sports at podium level at Athens 2004 and Beijing 2008

Figure 2: UK Sport's funding of and athlete numbers competing in Paralympic Sports at podium level at Athens 2004 and Beijing 2008

Note: Athletes on UK Sport's Paralympic podium programme are those considered likely to win a gold medal in the next four years.

Source: C&AG's Report, Figures 7 and 8 supplemented by data from UK Sport

4. Following the announcement that the 2012 Games would be held in London, the Department and UK Sport's objectives have broadened. UK Sport now aims to fund all Olympic and Paralympic sports which it judges can perform creditably at the Games, as well as those expected to win medals. It is now supporting athletes across 47 Olympic and Paralympic sports, many of them for the first time.[7]

5. Asked whether it had abandoned its 'no compromise' strategy by funding a wider range of sports, UK Sport told us that its strategy remained focussed on performance. For example, it had cut funding for athletics by 17% between the Athens and Beijing Games, based on its assessment that the level of funding was too high for a sport which was relatively under-performing and not achieving its potential. The additional funding available for London 2012, however, meant that UK Sport could now spend money on sports not likely to win medals in Beijing but which could be expected to compete creditably at the London Games and potentially produce medal winners. Fencing, for example, had a good track record in developing potential through its cadet programme but found it difficult to convert these cadets into medal potential athletes. UK Sport was now providing fencing with financial support right through to podium level for the first time, and the sport was working with one or two athletes who had medal prospects.[8]

6. UK Sport told us that it had high expectations of the performance of other sports it was funding. For example, the Great Britain cycling team had won 11 medals, nine of which were gold, at the world track championships in Manchester. And, following a significant increase in podium funding and the appointment of a Chinese coach, Great Britain's archers had won three medals at the recent world championships, a level of success unprecedented in recent years. In diving, where podium funding had nearly doubled, Tom Daley had recently become the second youngest British male ever to qualify for an Olympics, and there were other divers whom UK Sport expected to reap the benefits of its financial support. In sailing, Great Britain was currently the best in the world and UK Sport was confident of success at London 2012 based on some excellent recent results.[9]

7. UK Sport's plans to prepare athletes for the 2012 Games depend on the Department raising £100 million from the private sector, over which there was still considerable uncertainty. The Department had tendered for a fund raising partner in November 2007, some 16 months after we first raised concerns about the challenging nature of this task and had urged them to draw on specialist fundraising expertise. The Department was now in discussions with its preferred bidder, a sports marketing company called Fast Track, which was developing a number of propositions for further consideration.[10]

8. The Department had delayed starting to find ways to raise funds from the private sector. It said that Ministers had made a deliberate decision to prioritise the fund raising activities of the London Organising Committee of the Olympic Games (LOCOG), which was staging the London 2012 Games. This choice had been made on the basis that the prospect of not raising this money presented the bigger risk. LOCOG was looking to raise approximately one third of its £2 billion budget from private sector sponsorship. The Government wanted LOCOG to be self-financing, but was also the ultimate guarantor of funding for the Games and that guarantee included meeting any shortfall between the costs and revenues of LOCOG. The Department also believed that the Beijing Games later this year would create a good environment in which to raise the £100 million needed to fund elite sport, and that the right time to start was after Beijing.[11]

9. The Department said that it was optimistic that it could attract private sector donors and was confident it could raise the £100 million, given the size of the sports market, which was worth some £16 billion and employed 400,000 people. It was also encouraged by LOCOG's success to date in attracting sponsors. It could not tell us what it had to sell, however, and acknowledged that the task was challenging and carried risk. It had no experience of raising such funding and there were no guarantees that the private sector would be willing to contribute as much as £100 million. The Department considered that the hugely increased public sector funding of elite sport provided a platform for persuading the private sector to get behind the Government and help sustain its efforts up to the London 2012 Games.[12]

10. We pressed the Department and UK Sport on what they were doing now given that they had no immediate prospect of receiving money from the private sector and that their plans were based on beginning to distribute this money to sports in the 2008-09 financial year. UK Sport was planning on the basis that it would receive £20 million a year from the private sector over five years, starting in 2008-09. UK Sport said they had developed a range of contingency plans for dealing with shortfalls in funding, depending on the amount involved. In the first instance, UK Sport planned to cut funding to sports with the lowest medal prospects in 2012. Depending on the size of the shortfall, however, it might also have to cut funding for athletes in sports with clear medal prospects. A funding shortfall could therefore affect the Great Britain team's medal performance at the London 2012 Games, as well as reducing UK Sport's capacity to build a legacy for elite sport that would last beyond 2012.[13]

11. UK Sport had never had a finance director, despite being responsible for the distribution of significant sums of public money. UK Sport told us that it recognised the need to raise its financial skills and capacity, particularly in view of the increase in its budget, and was about to appoint a dedicated finance director for the first time.[14] The successful candidate took up the post in July 2008.

4   Ev 14-15 Back

5   Q 54; C&AG's Report, para 1.6-1.7 Back

6   C&AG's Report, paras 2.3, 2.8, 2.13, 2.19 Back

7   C&AG's Report, paras 1.4, 1.12 Back

8   Qq 19, 61; C&AG's Report, para 2.14, Figure 7 Back

9   Qq 20, 64, 69, 71 Back

10   Q 122; C&AG's Report, paras 1.6, 2.27 Back

11   Committee of Public Accounts, Fourteenth Report of Session 2007-08, The budget for the London 2012 Olympic and Paralympic Games; HC 85, para 14 Back

12   Qq 108-109, 122-123, 125 Back

13   Qq 3, 4, 127; C&AG's Report, para 2.33 Back

14   Qq 48-50  Back