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The O2, a central part of plans to regenerate the Greenwich Peninsula, opened on time in June 2007 and has become a highly successful entertainment venue which has boosted local employment. According to the National Audit Office, however, housing development on the rest of the Peninsula is taking longer than originally expected, and financial returns to the taxpayer are likely to be lower as a result.

The report found that the number of houses built, making up most of the project, is two years behind original forecasts. English Partnerships’ oversight of the regeneration can influence the quality of the project, but it cannot easily speed up delivery by house-builders. The delay increases the risk that English Partnerships might not meet its forecast of 4,250 housing units by 2016.

Delays to the housing programme have, however, freed up capacity and brought forward the development of schools and commercial space. This development will benefit the growing community on the Peninsula, as it will allow them to live, work and use recreational facilities on the Peninsula from the day they move in.

A consequence of these delays is that the financial returns to the taxpayer from the residential and commercial elements of the deal (excluding The O2) could be lower than expected. The available information suggests a reduction of £45 million to £60 million compared to the initial 2004 calculation, though returns will fluctuate over the 20 year lifetime of the project.

English Partnerships has not yet quantified the likely return from The O2. The Public Accounts Committee recommended in 2005 that Departments should attempt quantification in such cases. Arrangements to secure a fair and timely financial return for the taxpayer are still being agreed with the developer AEG.

Tim Burr, head of the National Audit Office, said today:

"The Greenwich Peninsula is an ambitious regeneration, highlighted by the landmark O2 venue. The pace of house building is already two years behind schedule, though better progress has been made on community and commercial space. English Partnerships needs to safeguard returns to the taxpayer, both by addressing the effects of delay, and by delivering the return which is due from the success of the O2."

Notes for Editors:

1. The O2 opened to schedule in June 2007 and is now the most popular music venue in the world. Some 45 per cent of its employees are Greenwich residents and a further 17 per cent live in the Thames Gateway.
2. English Partnerships is the Government’s national regeneration agency, with a remit to deliver high quality, sustainable growth in England sponsored by the Department for Communities and Local Government. English Partnerships manages the delivery of the regeneration of the Greenwich Peninsula.
3. The Anschutz Entertainment Group Europe (AEG) are a leading sports and entertainment presenter, responsible as part of the overall project for the regeneration of the former Millennium Dome into The O2.
4. Press notices and reports are available from the date of publication on the NAO website, which is at www.nao.org.uk. Hard copies can be obtained from The Stationery Office on 0845 702 3474.
5. The Comptroller and Auditor General, Tim Burr, is the head of the National Audit Office which employs some 850 staff. He and the NAO are totally independent of Government. He certifies the accounts of all Government departments and a wide range of other public sector bodies; and he has statutory authority to report to Parliament on the economy, efficiency and effectiveness with which departments and other bodies have used their resources.