But news of £377m surplus in budget tempered by Locog lack of transparency over £1bn public funds received
There was some good news for the taxpayer yesterday as the Government announced the London Olympics and Paralympics will come in at least £377million under budget.
In its final budget report of the Games, the Government now forecasts the overall cost at £8.921billion, down from a budget of £9.298billion.
However, there remain misgivings over the fact the Government gave the London 2012 Organising Committee for the Olympic and Paralympic Games nearly £1billion – more than a third of its operating budget – when Locog is a private company and therefore not subject to scrutiny through freedom of information requests.
The £377million saved will remain with the Treasury – other sporting projects, such as school sport, are unlikely to receive any of the monies, sport minister Hugh Robertson said.
Robertson said mayor of London Boris Johnson would have to negotiate with the Chancellor for any of the money if he wanted it to underwrite changes, such as retractable seating, to the Olympic.
The Government figures could be further improved if the remaining £105million in contingency “lumps” are not depleted before Locog is wound up at the end of March 2013.
While the Government was pleased to have delivered a successful Games within the generous budget revised in 2007, critics note the original budget of £2.3billion at the time of the 2005 bid was wildly underestimated.
While the near £1billion of public money that the Government has diverted to Locog has undermined Locog’s status as a private organisation – it is not subject to the scrutiny of a public company – it also highlights how difficult it is for any organising committee to operated without public-purse support.
Locog attempted to raise all of its £2.2billion Games operating budget through International Olympic Committee broadcast payments of around £1billion, ticket sales of more than £500 million, merchandise of £100million and sponsorship of £700million.
But the Government has revealed it paid for Locog’s venue security (£514million), half of the extra costs in staging the Paralympics (£111million), extra money for Park operations (£78million), payments for capital works including elaborate opening and closing ceremonies (£224million) and operations including managing entrances to venues (£137million).
Some of this money was for work seconded to Locog from the Olympic Delivery Authority while some was used to pay contractor fees. A Locog spokeswoman said: “Locog, as a private entity, stepped up to help the public entity deliver the Games.”
Robertson said that even though Locog was a private company the financial scope of its budget was rigorously scrutinised and that Locog would break even. It would also release long-awaited details of its controversial ticketing programme, including a breakdown of price, session and availability, as officials promised, within the next few weeks.
But while Locog’s costs are opaque, the Government showed how its Olympic budget made last-minute savings in policing, transport and venue security. Policing costs were reduced £20million to £455million, and security by £39million. Transport was lowered by £35million.
The G4S debacle, which involved the deployment of the military, will be underwritten by G4S.
Other factors such as crowd control and covering additional costs of the Paralympics were increased in the final months of preparation.
Robertson noted: “We were lucky to have good project management skills and a lot of time, attention and effort has gone into this.”
By Jacquelin Magnay
Source: www.telegraph.co.uk