MPs brand 2012 budget 'unrealistic'

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The Public Accounts Committee said the original £4billion budget had ignored Treasury guidelines to include a contingency fund and that extra spending on tax, policing and security was easy to predict.

Committee chairman Edward Leigh said: "It is now clear that the estimated cost at the time of the bid, just over £4billion, was entirely unrealistic."

He added: "It ignored foreseeable major factors such as contingency provision, tax obligations, and policing and wider security requirements.

"At the same time, the estimate of the extent to which the private sector would contribute funding towards the Games has proved little more than wishful thinking.

"Despite the astonishing increase in the level of public funding for the Games, the Department did not specify in detail precisely what will be delivered for this money, including the legacy benefits."

The report goes on to say "the public will find it hard to be confident" that the Games will be delivered even within the new higher budget.

The report said the £2.7billion contingency fund was not included at the time of the bid "despite Treasury guidance", that costs of tax and security, now estimated at over £1.4billion, were excluded from the estimates as they were uncertain.

The target of £738million income from the private sector has now been cut to £165million.