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MPs set to condemn spiralling budget for 2012 Olympic Games
Nicholas Cecil, Political Correspondent16.04.08
MPs are preparing to issue a scathing condemnation of the soaring cost of the 2012 Olympics.
In a report to be published next Tuesday, the Commons public accounts committee will criticise the bill for the Olympics, which has spiralled from about £3.4billion to more than £ 9billion. One source said: "It's a hardhitting report."
One MP on the committee, Labour's Don Touhig, has branded the multibillion-pound rise as likely to go "into the Guinness Book of Records for the most catastrophic financial mismanagement in the history of the world".
Meanwhile, the cost of buying land for the Games and compensating its previous owners will be £30 million higher than originally forecast.
The London Development Agency said the original budget for taking possession of the Olympic Park site in Stratford had been £594 million, but by the end of the last month £578.4million had already been spent.
In reply to a freedom of information request it added: "The current estimated outturn budget for land and disturbance compensation payments is £624.41 million, with the increase of £30.37 million funded from the approved budget contingency."
Nearly 500 homes and almost 200 business premises have been acquired, with only one home being bought by compulsory-purchase. The LDA stressed the contingency fund was included as part of an overall budget of £1.4 billion for the Olympic land project.
An LDA spokesman said: "There has been no increase in the agency's overall land acquisition budget.
"As part of prudent planning to accommodate rises and falls in land values over a two-year period, a contingency was set which covers the change in costs.
"These were forecast back in November-2006 and remain unchanged." A Department for Culture, Media and Sport spokesman said: "Land acquisition and sales in the Lower Lea Valley area being used for the 2012 Games are issues for the London Development Agency.
"Such costs are not included within the overall Olympic budget but, in any event, this does not affect in any way the £9.3 billion total outlined by Tessa Jowell to Parliament last year."
The Conservatives called for ministersto be more transparent about costs. Shadow sports minister Hugh Robertson said: "This comes as no surprise. However, it does reinforce the need for a much more open budget."
Richard Bacon, who sits on the public accounts committee, added: "This is a worrying development. In the current market it's surprising they could not obtain the land they need within their original budget." He refused to discuss next week's report.
In November the committee questioned Jonathan Stephens, permanent secretary at the Department for Culture, Media and Sport, and David Higgins, chief executive of the Olympic Delivery Authority.
Committee chairman Edward Leigh suggested the Government had either acted in bad faith or been incompetent over the budget.
Mr Stephens stressed the Olympic project was equivalent to building something twice the size of Heathrow Terminal 5 in half the time.
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Reader views (8)
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I had a funny discussion with a French colleague a couple of years ago. He was returning to Paris and was hoping France would lose the bid, I was planning to stay in the UK and was hoping London would lose the bid.
Mr Coe, like all those who have made rubbish business decisions over the last few years, will have good financial advisors helping them to find every single loophole in the tax system. The rest of us will pay. Why is the prestige of the country at stake if we hold games that are within our means please? All this will do for the Olympic circus is put off any intelligent governments from bidding for the games. But politicians are often egomaniacs so they will probably continue.
- E Phillips, Leatherhead
"which has spiralled from about £3.4billion to more than £ 9billion"
I think that's the tip of the iceberg, current estimates are that it will run to over £20 billion, and us Londoners have to pay for it, hurrah for us.
- Ken Sapratt, Streatham
So let's see if I understand the article. The 30.37 million overspend on land acquisition is part of the 1.4 billion budget set for the Olympic land project. This money does not form partof the overall Olympic budget of 9.3 billion.
To my reckoning this makes the Olympic project a total of 10.7 billion already. Just what is included in the Olympic budget - how about the 3,000 chauffeur driven limousines being demanded by the Olympic committee?
- Terry Gostling, Crowthorne, Berkshire
