Warning of budget-bust for staging London Olympics

The price for staging next summer’s London Olympics could bust the approved �9.3bn budget, Parliament’s spending watchdog has warned.

Games organisers have left themselves little “wriggle room” - just �36m -for potential overshooting planned costs and there was a “real risk” they may have to dip into the public purse, says a report from the National Audit Office (NAO).

Its alert this week came as it was revealed that Prime Minister David Cameron has ordered a further �41m to be spent on opening and closing ceremonies to show the UK in its best light and that estimates for security and policing for the “greatest show on Earth” has now doubled to �1bn.

With 2012 Games organisers insisting the venues and infrastructure are being completed within budget and on time, including the development of the huge Stratford Park, ministers insist more than �500m remains in the kitty to deal with any contingencies.

Sports Minister Hugh Robertson said; “Clearly any big infrastructure project is always going to be quite finely balanced but, as at today, we will be 95 per cent complete in terms of bill by Christmas and we still have half a billion pounds left in the contingency to cover all known risks. So I’m confident as I can be as the minister that we’re going to deliver on time and within budget.”

But head of NAO Amyas Morse said “not everything was rosy” and the government had little room to manoeuvre. The government may be confident, he said, but in his view the likelihood that the Games funding can remain within the existing budget is finely balanced and there is a real risk more public money will be needed.

Sir Robin Wales, Mayor of Newham, the main host borough, chipped in with his welcome of the report as “a timely reminder” to Government that the Games “must be properly funded” as well as the importance of getting right key issues such as legacy, transport and security.

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He continued: “Overall, it is essential that the 2012 Games prove to be a gold standard experience for residents and local businesses across the host boroughs.”