London Olympics set to come in on - revised - budget
After the latest accounts the London 2012 Olympics is said to come in on the revised budget. However, Sky News paints a less rosy picture reporting further expenses. With 150 days to go until the start of the London 2012 Olympics, the Olympic Delivery Authority’s (ODA) construction programme is now 96 percent complete.
According to the latest figures, up to GBP 527 million of unspent contingency is still available from the Olympics and Paralympics budget of GBP 9.3 billion. Moreover, GBP 100 million is now expected to be given back to the Treasury. The figures were derived from the British government’s February 2012 Olympic Quarterly Economic after a critical report from the National Audit Office in December 2011 warned that there was a ‘real risk’ of busting the overall budget, mainly due to a huge increase in the security budget after the terror attack on the London Underground in 2005.
“This puts us in a strong position and gives me increasing confidence that we can deliver the Games under budget,” said the Minister for Sport and the Olympics, Hugh Robertson, to MPs.
Sky News expects further costs
But according to an investigation by Sky News, the accumulated costs of London 2012 are much higher than the official figures indicate: The Olympic costs including associated costs could reach as high as GBP 24 billion.
After a review in 2007, the public sector funding package was increased from GBP 2.37 billion to GBP 9.3 million.However, Sky News claims to have counted an extra GBP 3.2 billion that has been spent so far, raising the costs to more than GBP 12 billion.
The extra spending includes costs of buying land for the venues, more anti-doping control officers, money for local councils for their Olympic torch relay programmes, cash spent on legacy schemes, paying tube workers not to strike, governmental operational costs, the cost of the Olympic Park Legacy Company, legal bills over the stadium tenancy decision and extra pounds to UK Sport. Further, the GBP 12 billion cost, calculated by Sky News, does not include:
- Extra counter-terrorism funding of GBP 1.13 billion allocated to the police
- GBP 4.4 billion for the budgets of the security and intelligence services
- The opportunity cost of having the majority of the UK police force working on the Games instead of fighting crime elsewhere
- GBP 6.5 billion spent on transport upgrades
These extra expenses lead to a total cost of GBP 24 billion, more than double the current budget and ten times the original budget. SOURCE: Sky News, the Guardian, Inside the Games