Unsupported browser

For a better experience please update your browser to its latest version.

Your browser appears to have cookies disabled. For the best experience of this website, please enable cookies in your browser

We'll assume we have your consent to use cookies, for example so you won't need to log in each time you visit our site.
Learn more

Olympic Stadium review: 'There are parallels with Garden Bridge fiasco,' expert claims

  • 4 Comments

A review of how the public sector handles prestige schemes is needed after a damning report into the handling of London’s Olympic Stadium, according to a leading tourism economist

Last week, London mayor Sadiq Khan released an independent report into legacy arrangements for the Populous-designed London Stadium, which slammed financial mismanagement that left the taxpayer footing a £20 million annual bill.

Dan Anderson, director at consultancy Fourth Street, said the fiasco had a number of parallels with the botched procurement of Boris Johnson’s proposed Garden Bridge.

He said: ‘There seems to be a running degree of naivety about how difficult these projects are. These big decisions are being made in haste and being influenced by immaterial public relations and optics issues.’

The report on the London Stadium by accountancy firm Moore Stephens found that the £323 million cost of transforming the venue was significantly higher than the ‘unrealistic’ and poorly scrutinised estimate of £190 million.

The review found that a 2011 decision to re-run the procurement exercise reduced competition in the process and led to West Ham Football Club, the final tenant, producing a less generous offer.

The costs of including retractable seats in order to retain the stadium’s running track were significantly underestimated, and their inclusion has reduced options for raising revenue from other events, the study found.

Anderson said that the incident was the latest in a number of botched procurements by the public sector.

He said: ‘We hear over and over again that it is easy to raise capital to build projects but that they often falter because of a lack of planning for revenue income to keep them going.

’Those making decisions on capital funding know that someone else will be responsible for the running costs. It keeps happening over and over again and we don’t learn the lessons.

‘I think we need a review of all these reviews to come up with guidance to help avoid problems recurring.’

Anderson said that the problem was not limited to one government or London mayor.

He said: ‘A lot of the things we are saying now could have been said about the Millennium Dome.

‘But there is no escaping the fact that it happened a lot under Boris Johnson – the London Stadium, the Garden Bridge, the Orbit, the cable car. It seems the rationale was often: “How is this going to look on the front of the Evening Standard?”’

  • 4 Comments

Readers' comments (4)

  • Some numbers to put the cost of the stadium West Ham are using in perspective:

    London (Olympic) Stadium:
    Total reported cost: £752m (including post Olympic conversion cost of £323 million, 2016)
    Seating capacity for Premiership football: 57,000
    Cost per seat: £13,193 (paid for by public funds)

    Leicester City (King Power) Stadium
    Total reported cost: £37m (2002)
    Seating Capacity for Premiership football: 32,262
    Cost per seat: £1,147 (paid for by private funds)

    Ratio of cost per seat London Stadium compared to Leicester City stadium : x 11.5

    London Stadium's value for (public) money? ......... very, very poor indeed!

    Unsuitable or offensive? Report this comment

  • 'A lot of the things we are saying now' about 'botched procurement in the public sector' surely - and unfortunately - also apply to the government's handling of the great Brexit adventure.

    Unsuitable or offensive? Report this comment

  • Richard Saxon

    when are we going to realise that built assets are investments for their life cycle? First cost is a fraction of whole-life cost and value. Optimising value in all its forms should determine what is worth spending as capital. Naive procurement is another issue: clients can be their own worst enemy.

    Unsuitable or offensive? Report this comment

  • What on earth are 'optics issues'? Could the use of incomprehensible jargon by consultants be a contributory factor to the general muddle?

    Unsuitable or offensive? Report this comment

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions.

Links may be included in your comments but HTML is not permitted.