London's bid to host the 2012 Olympic Games faces stiff competition from around the globe, but Neil Wood relishes the challenge of his first financial director role. Larry Schlesinger meets the man who aims to keep the capital's dream alive.
Link: Odds on favourites
When you meet Neil Wood, the recently appointed finance director of London 2012 – the company tasked with winning London the rights to host the Olympic Games in nine years’ time – the first thing he wants to show you is the view from his office window.
London 2012’s headquarters – and Wood’s new office – are perched on the 50th floor of Canada Square in Canary Wharf. Boxes and cartons and other moving paraphernalia lie scattered among the desks of the recently installed team. But if you get past the clutter, the floor to ceiling windows all round afford spectacular views across London. This includes a clear vista across the Lower Lea Valley out to the east, the 500-acre site where London will stage the games, if Wood and his team are successful.
Wood is just 38, slightly built, genial and from his pumping handshake and broad grin, obviously very excited about his first time in the finance director’s chair having been seconded from Deloitte.
While he has no professional background in sport, he is a bit of an all rounder with pastimes including clay-pigeon shooting, scuba diving (his wife is a dive instructor), running and squash. To top it all off, he has just qualified as a RFU rugby coach, a move motivated by his nine-year-old son’s interest.
When the offer came to become Olympic bid FD, it was not something he was ever going to turn down.
‘The chance to be part of the bid for the Olympics is hugely exciting and unique. It’s a once in a lifetime opportunity,’ Wood explains, with the air of a man who has just been handed a dream job.
The uniqueness of the job is obvious. Wood will be running the finances of a business that was only set up in August this year and which will close down, regardless of the outcome of the bid, in July 2005. If – as Wood hopes and believes – the bid is successful, London 2012 will be wound-up and a new company will be formed, tasked with ensuring that the plans set out in the bid document – the stadia, roads, Olympic village, logistics, transport and so on – are ready by 2012.
If they lose, it’s a dead end – and Wood knows it. ‘This is unlike any other commercial company, if we win we have been successful, if we lose, we have not. And that’s the bitter reality. To lose well is no compensation.’
But up until July 2005, London 2012 is all that matters. The bid itself will have a budget of £20m with the funds coming from the public coffers – £10m from the London Development Agency (LDA) and £10m from the Treasury, via the Department of Culture, Media and Sport (DCMS).
Just like David Leather, the KPMG partner who oversaw the finances of last year’s hugely successful Commonwealth Games in Manchester, Wood knows that this use of taxpayers’ money will put London 2012’s activities under intense scrutiny. ‘This is public money and we want to be extremely transparent. And of course, we want to make good use of it.’
Wood has spent his career in practice, starting off at Andersen in its audit practice in 1992, then working on large restructuring projects in the electricity and energy sector. He returned to the firm in 1997 after time abroad, and was part of the team that transferred ‘seamlessly’ to Deloitte in 2002.
He is not daunted by his first major role in the business arena. ‘For me, this will be business as usual,’ he says. Wood will bring his experience of working on large, discrete projects to bear in his new FD role, and says the challenge will be ‘in the running of a complex project, something I having been doing for years’.
Alongside the likes of the formidable Barbara Cassani, the bid chairman, and chief executive Keith Mills, Wood will command permanent staff numbers of no more than 50 people, plus around 20 consultants.
An extremely detailed budget is being put forward for the bid, but Wood says it will be for the bid team to decide how the money is deployed.
To make sure that money is spent wisely and can be accounted for, Wood has already begun to stamp his mark on the financial controls: ‘The day I arrived I put in all the normal business controls including the segregation and delegation of duties. No one can spend money without a more senior person or me signing it off. And we have the set thresholds very low.’
These measures are not just to satisfy the Treasury and the public at large, but to meet with the approval of the International Olympic Committee (IOC), which has very strict guidelines. ‘All monies spent must be traceable to any one individual,’ Wood says. The IOC expects all bids to have two statutory audits, as is the case for any limited company, and KPMG as auditors will report to the Olympic governing body. London 2012 will also report to the Treasury through the DCMS.
Wood says he might also invite another audit firm to undertake a review of all costings. Clearly he is not taking any chances.
In terms of preparing the bid itself, Wood will be involved in all stages leading up to July 2005. This begins with completion of an applicant questionnaire made up of 25 pages and 25 questions. ‘These are fundamental questions about things like venues, money, hotels and transport facilities,’ Wood explains.
Then on 18 May 2004 the shortlist of cities is drawn up. If, as expected, London makes it this far, Wood and the team will have to begin preparing a candidate file, which could run to 500 pages, including architectural drawings, detailed financial information, regeneration plans, underlying economics and underlying philosophy. This must be submitted by 14 November 2004. In February or March 2005, an evaluation group from the IOC will come to London to interrogate the bid and will report back in May 2005.
On 6 July 2005 each city will be given one hour to make a presentation to the IOC’s 106 members who will then vote to choose a winner.’I will be pretty involved in all of this,’ Wood explains. ‘There is a lot of financial information contained in these documents.
According to Wood, economics and regeneration are key to success. ‘The economics of the infrastructure must be credible. All decisions we take have a financial impact,’ he says. Wood will have to put together a legacy financial report, including such things as transport needs, including decisions on whether to upgrade existing infrastructure or to build from scratch.
‘The IOC wants to know what the broad economics are. For example, one of the bid cities will be spending $14bn (£8.1bn) cleaning up the environment,’he says. London 2012 has been looking at regeneration with plans in place for some time already and has been working alongside the LDA and the DCMS.
London’s regeneration plans look impressive. The Lower Lea Valley will be one Europe’s biggest redevelopment areas, creating ‘one of Europe’s biggest parklands’.
There is of course the question of transport, given London’s much-debated congestion problems. By Wood’s estimates, the Olympics are expected to bring an additional 200,000 people into the city – but he is not too concerned.
‘This will not fundamentally be a problem. We are looking at the projected impact and working hand-in-glove with Transport for London,’ he says.
Like David Leather, Wood makes it plain that there will be a legacy use for everything that is built – he promises ‘there will be no white elephants’.
These redevelopment plans have been taking a more definite shape over the last few weeks. Alongside the unveiling of the London Olympics logo – depicting the Thames weaving through thick black letters in the five colours of the Olympic rings – the bid committee has put forward proposals for an 80,000-seat stadium, an aquatic centre, velodrome and an Olympic village, with facilities for 17,000 athletes and officials, near Stratford rail terminal.
Wood says that the redevelopment will include the building of the Stratford tunnel link, which will link up the London Olympics directly with Europe.
But as he looks out of the window, beyond the smoke billowing out of factories to the Lower Lea Valley, he is ready for what he knows will be a dogfight. ‘This is going to be the toughest competition in recent history. Among those most likely to challenge London will be Paris, New York, Rio de Janiero and Moscow. But London has huge amounts to offer – it’s a multicultural iconic city and has a 100 different ethnic groups, many of those in the valley itself,’ says Wood.
Looking back again at the broad expanse of land that in 2012 could be teeming with activity, Wood knows that regardless of whether the bid succeeds or not, he is unlikely to have this view if and when the Olympics show rolls into town in nine years’ time.
His job as he sees it is just to make sure London 2012 wins the ‘election campaign’. After that, it is more than likely he will pack up his office at Canada Square, and return to Deloitte. ‘I have no plans to move out of the profession. I will return to Deloitte in 2005 at the end of the bid process, where there are still plenty of exciting opportunities.’
Then again, if London triumphs, he might just get an offer too sweet to refuse.
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London will be up against Havana, Istanbul, Leipzig, London, Madrid, Moscow, New York, Paris and Rio de Janeiro for the right to host the 2012 Olympics. Here we profile three of the bookmakers’ favourites:
PARIS (15/8)
Mayor Ken Livingstone says that current favourite Paris will provide London with stiff competition. In the French capital’s favour is its strong infrastructure, including the state-of-the-art 80,000 Stade de France stadium used for the 1998 World Cup. Transport links are very good, and it has the backing of the public following its anti-war stance. It has also has a good bid pedigree, narrowly losing out to Beijing for the 2008 games, although the IOC was apparently disappointed by its presentation.
MADRID (11/2)
The city is well known for its love of sport, and also has excellent infrastructure and transport connections. Also in its favour is the fact that it is the only major European capital never to have hosted the games and the bid has the backing from all the political parties. But is has suffered from a lack of funds and the aftermath of its involvement in the Iraq war, plus there are also concerns about violence from Basque separatists.
NEW YORK (7/1)
The city will present a strong emotional bid following its recovery from the events of 9/11. If nothing else, it will be able to tug at the heart strings, a card its bid committee is likely to play to the maximum. But it also has ambitious redevelopment plans including a stadium in the long-derelict railway yards on the west side of Manhattan. There are also plans to create new transport connections to link an Olympic village on the East River in Queens to the stadium and to other venues in New Jersey. But there will be security concerns.
LONDON (2/1)
Having successfully hosted the 1996 European football championships and the 2002 Commonwealth Games, the UK’s reputation has grown.