MP’s Concerned Over London 2012 Budget

By Community | March 9, 2012

MPs have divulged their concern that the London 2012 Olympics may go over budget and said it was “staggering” that initial estimates about security costs were so wrong.

The Public Accounts Committee’s report into the London Olympics also raised concerns about the legacy of the Games and warned that the Olympic Stadium must not become a white elephant.

The Government, however, has continued to insist it is confident the Games will come in under budget.

Margaret Hodge, chair of the Public Accounts Committee, said: “The venues and infrastructure of the London Olympic Games are on track to be delivered on time and within budget. The Olympic Delivery Authority’s management of the building programme has been exemplary.

“However, the £9.3 billion public sector funding package is close to being used up and we are concerned about whether the running of the Games will be held within budget. Taking into account costs outside the package, the full cost to the public of the Games and legacy projects is already heading for around £11 billion.

“We are particularly concerned about the significant increases in the security bill. LOCOG (the London organising committee) now needs more than twice the number of security guards it originally estimated and the costs have roughly doubled. It is staggering that the original estimates were so wrong.”

The report states that the LOCOG have been forced to renegotiate their contract with G4S for venue security from a “weak negotiating position”. Mrs Hodge added: “There is a big question mark over whether it secured a good deal for the taxpayer.”

LOCOG’s original estimate for the number of security guards in and around the venues was 10,000 – a “finger in the air estimate”, according to the PAC report. The Government announced in December that figure has more than doubled to 23,700. Security costs from the Olympics budget have risen from £282 million to £553 million.

“LOCOG itself now has almost no contingency left to meet further costs, even though it has done well in its revenue generation,” says the report. On legacy, the PAC report raises concerns over sports participation targets and the stadium after a deal for West Ham United Football Club to take it over was scrapped.

Mrs Hodge added: “We were promised a strong Olympic legacy but the Government has chosen not to adopt the target of one million more people participating in sport by 2013, and plans for the stadium have fallen through. It must not become a white elephant. The Government is dispersing responsibility for delivering the legacy and we need clarity about who is accountable.”