London Olympics 'to come in £476m under budget'

 
Olympic stadium The Olympic Stadium will host the opening ceremony next month

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The London Olympics is set to come in under its £9.3bn budget with £476m of the contingency funding left, according to new government figures.

Culture Secretary Jeremy Hunt said it was "fantastic news" that the Games would be on time and under budget.

Ministers expect to be able to return the remaining money to the Treasury.

The £9.3bn budget, which included a £2bn contingency, was set in 2007 and was almost four times the estimated cost at the time London bid in 2005.

The budget was revised upwards after taking into account previously overlooked costs such as VAT, increased security costs, and an expanded brief for the Olympic Delivery Authority (ODA) to regenerate the lower Lea Valley area.

Addressing the original bid budget of £2.4bn, Sports Minister Hugh Robertson said there was a "recognition right from the word go that figure would have to change dramatically on the basis of delivering the Games".

London 2012 - One extraordinary year

London 2012 One extraordinary year graphic

Mr Hunt said: "Britain has proved that not only can we put on a great show for the world to watch like we did with the Jubilee but that we can also deliver big construction projects on time and on budget."

Mr Robertson said the latest figure for the Games, which begin next month, was "a great advert for the British construction industry, for sport and for UK Plc".

Following the success of the Queen's Diamond Jubilee and the ongoing Olympic torch relay, additional funding of £19m has been earmarked to bolster crowd control and public information for the games.

The money, which will be allocated from within the £9.3bn budget, will pay for additional stewards and crowd flow measures in central London as well as the "last mile" - what organisers describe as the distance between transport hubs and Games venues.

Mr Robertson said: "We know exactly how many tickets have been sold and roughly how many people should be in London. Absolutely nobody knows how many people are going to turn up.

"London this summer is going to be the place to have a party. It is a great national event. It is very difficult for us to know exactly how many people are going to come across on the train, in the car or on the ferry only for a party."

The government confirmed the work of the ODA, which is responsible for developing and building the venues and infrastructure for the games, is 98% complete.

It will not be fully completed until after the Games when the ODA will convert apartments in the Olympic Village into thousands of new homes.

 

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  • rate this
    +3

    Comment number 65.

    How on earth did what is essentially a department of the government fail to factor in one of its own taxes - VAT?

    I wish I could have used that line when I had to account for VAT, "Sorry, Mr. VatMan. Forgot all about it."

  • rate this
    +4

    Comment number 64.

    Fantastic News, now we can send the savings overseas to Europe so they can spend it for us...

  • rate this
    +1

    Comment number 63.

    Thank you Kes (no.42) for some actual facts. You could have added that VAT is not a real cost for the project - it is part of the headline cost but paid back to the government so therefore entirely neutral at the end of the day and it should be taken out when considering the final cost.

  • rate this
    -14

    Comment number 62.

    "London this summer is going to be the place to have a party."

    Does this mean I can throw a party and the noise police won't rock up and close it down like they usually do?

  • rate this
    +8

    Comment number 61.

    This headline should have read "Olympic spending uses £1.5 billion of its contingency fund". What a ridiculous sentiment to say they are under budget.

  • rate this
    +15

    Comment number 60.

    To clarify, pick a ridiculously low figure to start with and get the public on board, then quadruple it once we've signed up. Have a few small increases along the way because the nation is awash with money, then broadcast how magnificently we are under budget? They must think we are all idiots.

  • rate this
    +5

    Comment number 59.

    The original estimate for cost of the Olympics was less than £3bn when the bid was submitted so arguably it has come in £6.5bn over budget.

    London council tax payers deserve to have their increases reversed.

  • rate this
    +3

    Comment number 58.

    Wasn't the budget raised from £16 or so Billion to £24 Billion anyway, so it's like a builder saying "This conservatory will cost £3000" then changing halfway through to £10,000, but then telling you "Oh the final cost will only be £9500, so you've saved £500!"? I.e. you aren't really saving anything in the long run...

  • rate this
    +55

    Comment number 57.

    This is not only a lie, but it is insulting our intelligence. The estimated cost was under £3bn, so not only have they spent more than three times that, the spending has also used up a chunk of the contingency fund as well. By what warped, incompetent standards is this anything other than a massive overspend? I think James Naughtie's infamous "mispronounciation" that morning was actually spot on.

  • rate this
    +71

    Comment number 56.

    I am a Governor of an infant school where we are having a sports day to bring the Olympics to life for the children. We have been told we must not use any Olympic symbols or the Olympic name or we face action. We are not trying to make money, just give the children something to remember.

    So sorry, if I have paid a single penny for this fiasco, it's too much.

  • rate this
    +3

    Comment number 55.

    "The £9.3bn budget, which included a £2bn contingency, was set in 2007 and was almost four times the estimated cost at the time London bid in 2005."

    So in other words, they are actually three times over budget.

  • rate this
    +3

    Comment number 54.

    Oh what a terrific result! I think they should use the remaining money to pay themselves a bonus.

  • rate this
    -2

    Comment number 53.

    Brilliant news! So how about a council tax rebate for those Londoners who have funded most of the games anyway? I'm surprised that legally the Treasury are allowed to appropriate all remaining funds as it's my understanding that council taxes are generally to be spent at a localised level.

  • rate this
    +1

    Comment number 52.

    This sounds like a con to me. The supermarkets do it all the time. Inflate the price one week so that you can offer a saving the next.

  • rate this
    +28

    Comment number 51.

    Didn't a lot of the funding for this project come from the lottery good causes fund???
    If so shouldn't this money be returned to that rather than the treasury, if the goverment want to gain some real brownie points!!

  • rate this
    +4

    Comment number 50.

    I'm going to have to get me one of those wonky calculators for when I do my tax return!

  • rate this
    +3

    Comment number 49.

    I think the Olympics are generally a good thing for the nation but suggesting that they are doing a good job by not spending £500m of a £2bn contigency fund is hardly to be applauded.

    I'd be interested to know if this is really the case once the games have finished and all the nunbers have finally been totted up. I doubt it somehow.

  • rate this
    0

    Comment number 48.

    Does anybody really believe this is the case? As the government cannot produce any figures that are comparable year on year eg: Unemployment. Why should we trust these.

    Governments are economic with the truth as stated by their own civil servant so this cannot possible be right.

  • rate this
    -13

    Comment number 47.

    One request to all in the UK, if we are willing to spend £9 Bill on this, £25 Bill on nuclear weapons (trident) continue to waste £billions through mismanagement of the NHS and waste through our Benefit system, please don't object to a new train line which will improve transport for a large proportion of the country, for our lifetimes and our children's (HS2)

  • rate this
    -6

    Comment number 46.

    If the Olympic delivery authority can deliver under budget, perhaps they should all be transferred to the Military to oversee the projects for delivering the new Aircraft carriers and Jets that we need.
    Perhaps then we won't have billions wasted and thousands of military people made redundant!

 

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