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Five years to go...and 2012 chiefs call for more cash
22.10.07
Olympic chiefs have already dipped into the £2.7 billion contingency fund set aside for cost overruns on the project, the Evening Standard understands.
The Olympic Delivery Authority has banked £360 million from the Government's 2012 financial reserves and earmarked the cash to be spent on specific projects, such as enabling works and utilities in the Olympic Park and village.
But it stresses the money has been drawn down with the consent of the cross-Government "funders committee" made up of Treasury civil servants as a precaution and it has not yet been spent.
An ODA spokesman said: "An initial amount of contingency was included as part of the ODA budget announced earlier this year by the Government.
"This has been allocated to projects, though none of it has been spent yet. We have always said that contingency funding will be important in managing risk on the project going forward."
In March, Tessa Jowell announced the new £9.3billion Olympic budget - three times the original estimate - would include a contingency allowance of £2.7billion, including £500million specifically reserved for cost overruns in the Olympic Park project.
The £2.2billion is a more general fund and may be spent on anything from security to regeneration projects outside the park. Allocation of the contingency fund, transparency and accountability are expected to be the focus of next week's public accounts committee grilling of Olympics bosses.
Before the new budget was set, Ken Livingstone described as "breathtakingly ridiculous" Treasury plans to set the contingency at 60 per cent of the construction budget, saying it would simply encourage potential contractors to push up their prices. It now stands at about 40 per cent of the £6.7billion - the budget minus VAT.
Hugh Robertson, the shadow Olympics minister, said: "There is a widespread feeling outside government that there are a number of causes for concern over the lack of transparency and accountability in the Olympic budget."
The ODA has attempted to guard against spiralling costs by adopting "target cost" contracts - used for Terminal 5 and Arsenal's Emirates stadium - for the Olympic stadium and the aquatics centre.
It says this encourages collaborative working between the client and contractor within a target price which also includes incentives to reduce costs.
