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MPs set to condemn spiralling budget for 2012 Olympic Games
Nicholas Cecil, Political Correspondent16 Apr 2008
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.
Reader views (8)
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, 17/04/2008 11:36
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"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, 17/04/2008 10:26
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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, 17/04/2008 09:48
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Apart from not wanting the Olympics - apart from Lord you will enjoy the Olympics, and if you don't you will be made to enjoy them in your pants, Coe - Isn't spending in excess of 9 billion pounds on buildings in a place called the Lower Lea Valley a bit risky?
If a major rain event like that of Gloucestershire last year happens over Hertfordshire, the Lea Valley will be awash. Just thought I'd mention it.
- Donald Lyven, Finchley, London, 16/04/2008 21:15
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Of course all the main principals in this escalating financial fiasco will just walk away from all this. Who will be lumbered with these costs - Why the London Council Tax Payers, and I dare say, those Counties around London like Essex, Herts and others. Another £20-00 a year on current Council Tax for the next 15 to 20 years. Thanks a bunch Mr Livingstone, Lord Coe, Mr Bliar, Mr Brown and all you other Cretinous Morons!
- B Clark, Chelmsford UK, 16/04/2008 17:52
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What a useless bunch Tessa Jowell and Ken Livingstone have proved to be. Why not have Parliament order that the Olympics be staged for the original cost that they were supposed to be, 3.4Bn -already a lot, but Ken said that they would make a profit (for whom? his cronies?); If some of the more expensive white elephants have to be cut out, then so what? Let some of the events be staged in other cities in the UK, or in France or Belgium, both easy to get to by Eurostar, rather than wasting any more money on this colossal ego boost for dodgy politicians. Do the sportsmen care about gold plated venues as much as about winning?
- Marcos, South London, 16/04/2008 17:16
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We will be lucky if it costs less than £20 billion in the end. And the 'government' cannot afford a few million to save our coasts or post offices.
- Rob Of Norfolk, King's Lynn, 16/04/2008 16:23
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We warned them about the 1976 Montreal Olympics but... They wouldn't listen!
Now we have Labour's Don Touhig (an MP on the committee) branding the multi-billion-pound rise as likely to go "into the Guinness Book of Records for the most catastrophic financial mismanagement in the history of the world".
All this when we are experiencing the disasterous effects of the credit crunch!
What nobody has "dared to make crystal clear" YET is "who it is exactly that will be picking up the tab for all these extra £multi-billions" that were incompetently under-budgeted?
Will it be the accountants? Lord Coe and crew? Ken Livingstone? EU in Brussels? Or somebody else?
Clearly, it certainly wasn't the incompetence of "This Is London" readers that has led to this "colossal deficit" so presumably we won't be charged for it either!
- Fraser, Telford Park, 16/04/2008 15:25
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