Concerns over London 2012 Olympics bill and legacy

Question marks still hang over the size of the final bill the taxpayer will face to cover the cost of the London 2012 Games, the government’s spending watchdog said today.

The National Audit Office (NAO), in its latest report on preparations for the Games, notes that the final cost is “inherently uncertain”.

The timings for handover of the �269 million Aquatics Centre in July and the Athletes Village in January 2012, to LOCOG (the London 2012 Games organisers) are now “becoming tight,” the NAO said.

Progress with the complex operational planning needed for Games time has strengthened. The �9.3 billion Olympic project can boast that five of the 24 main Olympic Delivery Authority-run building projects are finished and set for handover.

Confidence is high that the other projects will be ready on time.

The overall cost to the public purse of security during the Games has increased from �600 million to �757 million, the NAO reports.

This is mainly because the government has now agreed to provide �282 million from the �9.3 billion public sector funding package to help secure the perimeter of the Olympic Park and other venues during the Games.

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This is offset by a possible �125 million saving on wider security and policing.

The NAO, which had called for final figures and a statement of responsibility on venue security to be confirmed, notes that some progress has been made.

Of the original �2,747 million contingency in the public sector funding package, �974 million remains.

With almost 80 per cent of the ODA’s construction programme complete and all known areas of uncertainty resolved, risks have been reduced.

The NAO warns there are no guarantees the remaining contingency will be enough to cover further unknown risks to the Games.

The NAO called on the Government Olympic Executive (GOE) to have plans for how it will meet any need for extra funding that can not be met from within the contingency.

Amyas Morse, head of the National Audit Office, said: “Good progress is being made in the preparations for the 2012 London Games which will begin in 17 months.

“All construction and infrastructure projects are forecast to be completed on time, albeit in two cases with little room to spare before the deadline for handover to LOCOG and operational planning has improved.

“However, the final cost of the Games to the taxpayer is inherently uncertain and as the Games near there will be less flexibility to make savings in response to any unforeseen financial pressures.”

The NAO also raised concerns about legacy.

It notes the GOE is accountable for the success of the legacy but has not yet estimated the net benefits it expects to accrue to the UK as a direct result of the Games.

The NAO recommends that “it should do so.”

The report also notes: “There are no plans for how delivery of the legacy will be monitored and coordinated when the Government Olympic Executive is wound up after the Games.”

Sir Robin Wales, mayor of the east London Olympic host borough of Newham, suggested that “alarm bells should be ringing” over legacy planning during a time of widespread cuts.

He said: “If this government fails to plan for a meaningful legacy, then the Games will be nothing but a vanity parade - and that would be a disaster given the amount of public money already ploughed into staging the Olympics.

“The Olympic Park Legacy Company has been doing great work but it’s evident from the report that the Government Olympic Executive now needs to get a grip on just how important the legacy is for east Londoners.”

A Culture Department spokesperson said: “We welcome the NAO’s report and their recognition of the good progress that has been made so far in delivering the Olympics.

“The government has worked hard with Olympic organisers to finalise costs and funding responsibilities to deliver savings and reduce risk helping to keep the programme on time and within budget.”