The downturn in the economy, especially in the house-building market, has left developer Lend Lease struggling to raise its half of the £2 billion needed for the scheme, as money lenders become increasingly unwilling to invest due to falling property prices.
A senior ODA source said: ‘If the banks don’t lend, then there would be other possibilities open to us. The government gives out approximately £1 billion every year to London’s Housing Associations, so that could be a funding route.
‘The government has to meet with its International Olympic Committee obligations. There will be very little housing built
in East London in the next few years, so by 2013 there will be a strong demand for housing in this area.’
Communities and Local Government refused to comment, but claimed that ‘all of the £8.4 billion’ it has allocated to support the national delivery of affordable homes ‘was needed’.
Tom Dacey, chairman of Southern Housing Group, expressed surprise at the claim, adding: ‘I’m sure there would be other areas of the exchequer that could be raided before they went for Housing Association money.’
The news comes nearly a month after ODA chairman John Armitt admitted the government would ‘have to come in and support the village financially’.
A National Audit Office report on 20 June warned that the deal between the ODA and Lend Lease could collapse entirely,
and last week the AJ reported that Make’s 30-storey tower at the heart of the scheme has been mothballed (AJ online 10.07.08).
Lend Lease – which declined to comment – has already been forced to scale back the 4,200 units proposed to house the 17,000 athletes attending the 2012 Games to 3,300 (AJ online 03.07.08).