The news was revealed at the London Assembly’s budget monitoring sub-committee meeting on Wednesday (17 July) at City Hall, that the overall budget for staging the 2013 event would be no more than £1.7m.
Committee members discussed the GLA having to stump up an extra £500,000 for the firework display in 2012 to avoid its cancellation. This was because the event’s main sponsor pulled out six weeks beforehand and the event organiser, the name of which the GLA did not disclose, refused to bear the extra costs.
Under the 2012 agreement, the organiser was tasked with securing a sponsor.
The sponsorship money was meant to contribute towards an overall figure of £2m to be spent on staging the event on 31 December 2012. The Mayor of London Boris Johnson approved an allocated budget of £1.45m, with the remainder to be raised through sponsorship.
Agency Jack Morton was contracted in November 2012 to replace the original organisers of the London NYE fireworks display.
Austin said the revised amount of money to be found through sponsorship for the 2013 event is a more realistic figure.
"We still think the commercial offer is the right approach," he said. "If as a result of these fireworks the amount of sponsorship is much greater than that, we have now got a base level to start with to increase the level of commercial involvement going forward."
When asked about the risks involved with sponsorship by John Biggs, chair of the sub-committee, Austin added: "There is always a risk when doing something slightly new, and that is something we need to bear in mind. Going into those sort of arrangements can be difficult and we have to go into it with our eyes open."
He explained the majority of costs for the event do not go on fireworks, but towards traffic management, stewarding and logistics.
"Making sure London operates, it’s safe, people can get home, is fundamental to the event working," Austin said. "Obviously the police, councils and Transport for London wouldn’t approve and licence the event if that wasn’t so."
He added: "I think we have worked much more closely and directly with the sponsors, in association with the contractors. We had a contract signed with the delivery partner in May, and we are working very closely with the potential sponsor at the moment. So this year it is in a much better place.
"It’s a commercial model where the contractor seeks the sponsors and does the contract, but we are much more heavily involved. We talked to the sponsors previously, but we weren’t quite as closely involved as we are now."
The London New Year’s Eve celebrations have been staged by GLA since 2003 and attracts around 250,000 visitors into designated viewing areas between Lambeth and Blackfriars.
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