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Comment: the real cost of the 2012 Games
Evening Standard22 Apr 2008
The Commons Public Accounts Committee's report on the spiralling cost of the London Olympics makes painful reading for Tessa Jowell, the minister responsible. The committee's chairman, Edward Leigh, damns the original estimate of just over £4 billion as "entirely unrealistic". The bigger worry for the future, though, is the impact of the increased costs on the Games' legacy.
At the time of the bid, the figure given for the core cost to the public purse was roughly £2.3 billion, or £4 billion including infrastructure costs and private sector contributions, calculated on the basis set out by the International Olympic Committee. However, the gap between that and more realistic estimates continues to raise questions over ministers' candour.
By March 2007, Ms Jowell had revised the figure to £9.3 billion. As today's report points out, most of the costs included in the increased estimate were entirely foreseeable, such as security, the need to pay VAT and the effect of inflation. As for the private sector money that was assumed for the original bid - £738 million - by March 2007 it had been revised downwards to £168 million. The Committee says it will hold the Department for Culture, Media and Sport to account for its promise not to exceed its revised estimate of £9.3 billion. But how? Even since Ms Jowell made that promise, the likely cost of the velodrome has doubled from £40 million to £80 million; the price of the aquatics centre has tripled to £242 million; and the cost of the Olympics village has more than doubled to £500 million.
Higher costs raise the stakes for the Games' legacy. They also threaten it, for as the cost of venues rises, the temptation may well be to concentrate on completing them at the expense of the Games' effects on both regeneration and grassroots sport. Today's report criticises Whitehall for the lack of legacy planning: these huge cost increases make it more important than ever that ministers now set clear goals and appoint a single figure with the clout to make sure that we get the long-term benefits of the Games that London was originally promised.
Reader views (1)
This disgraceful waste of public funds should be halted right now, and those responsible for the criminal lack of financial rigour sacked and prosecuted. The morons jumping for joy when the announcement was made three years ago were obviously never going to be the ones expected to foot the bill.
- The Gene Genie, Croydon, 22/04/2008 12:40
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