Public account watchdog: Olympic budget 'worryingly tight'
The chairman of the Public Accounts Committee (PAC) has revealed the £9.3 billion budget to deliver the London 2012 Olympics is ‘worryingly tight’
PAC chairman Edward Leigh said while building work on the Olympic site was progressing well and ‘was on track’ for test events in 2011, the contingency funds could be hit with problems.
According to latest figures, the Olympic Delivery Authority has just £1.2 billion remaining of its original £2.7 billion contingency fund.
The PAC report revealed most of the remaining cash is already earmarked to meet predicted risks, meaning that just £194 million will be left ‘in reserve’.
Leigh, speaking as the PAC published its report into the preparations before the 2012 Games, said: ‘Of the sum left within the Olympic budget for contingencies most is currently earmarked for known risks. But unforeseen problems continue to emerge to place fresh demands on the contingency.’
Another £160 million of contingency could be called upon to cover previously unplanned work to secure and maintain the Olympic Park between the end of construction to the handover to the Olympic Park Legacy Company (OPLC).
The £9.3 billion budget, triple that of original estimates, was set in March 2007.
The report concludes: “Staying within the budget also depends on receiving some £600 million receipts from the Olympic Village development. So the position is tight, with no room for complacency and limited flexibility to respond to new problems as the Games approach”.
An ODA spokesperson said: “The foundations for success are in place but we are in no way complacent.”
A Department for Culture, Media and Sport spokesman said: ‘We have continued to make savings across the project with the anticipated final cost of the construction programme estimated to be around £7.2 billion from an overall Olympic Delivery Authority budget of £8.1 billion.
‘Nevertheless, we are not complacent and we recognise that there are many challenges ahead. We will continue to work hard with all the delivery partners to ensure that we achieve the best value possible.’