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
    0

    Comment number 405.

    They proudly publicise that everything is under budget however, they fail to mention the large amount of time and training days/events completed by volunteers on the lead up to this event. Volunteers from outside London have spent up to approximately £1,000 to date, with a further £900 needed to cover expenses during the Olympic Games without even a thank you, no doubt saving the budget.

  • rate this
    -1

    Comment number 404.

    It's the same with any Government-sponsored project. The Olympics, High Speed 2 railway, Aircraft Carriers. Take their initial estimate and multiply by three or four to get the likely real number. You can then sit back and wait for the spurious self-glorification. The old adage applies: you always know when a politician is lying, because you can see their lips moving....

  • rate this
    -1

    Comment number 403.

    Just a thought... do we get some more money back if we don't launch any of those missiles that are on top of people’s houses? That should save us a bob or two! Or have the government forgot to budget for using them as well? What a crazy carry on!

  • rate this
    +1

    Comment number 402.

    My heart goes out to the world's athletes. They've put the time in, felt the pain & honed their performance to the absolute best they can. Full respect. What a shame it's to be in the thick of all this commercial, military & political vulgarity in London.

    Let this be the last of the Babylonian "modern" Olympics & let the future be a permanent home in Greece that we all on the planet can afford.

  • rate this
    +1

    Comment number 401.

    399. coram-populo-2010 "it's all a fantasy that appears to have evolved into a roaming monster with a life of it's own - like those who run the banks.

    Both of the above remind me of the 1950s made forbidden planet film I saw as a child. The monster had no substance - it was purely driven by the mind of a maniac."
    ~~
    Flipping 'eck, I remember that film! I see the connection you're making!

  • rate this
    0

    Comment number 400.

    I think the £9 Billion spent on the Olympics is well spent, even if it was overspent by £6 Billion. Cost overuns, sigh, you know how it is ! Two weeks of pretentious pratts pracing around in lycra should be a good laugh for everyone !

  • rate this
    +3

    Comment number 399.

    Where does all the money keep coming from to fund the Olympics? Ah, well, never mind - it's all a fantasy that appears to have evolved into a roaming monster with a life of it's own - like those who run the banks.

    Both of the above remind me of the 1950s made forbidden planet film I saw as a child. The monster had no substance - it was purely driven by the mind of a maniac.

  • rate this
    +1

    Comment number 398.

    392.harbourmaster
    20 Minutes ago
    .I realise the 'underspend' is on the initial plan + contingency, but when compared to the fiasco of Wembley it has to go down as a success.
    NOT TALKING ABOUT WEMBLEY ARE WE You sound like DC and JH

  • rate this
    +4

    Comment number 397.

    So after a cost over run of 300%.... to great fanfare we get 5% back...

    This is actually pretty funny

    The USSR used to have a whole bunch of success stories just like this one

    Forward Britannia !
    Another million tractors produced this year comrades !

  • rate this
    +1

    Comment number 396.

    Basic Project Management - A contingency is there to be spent when you have gone overbudget due to unexpected and unplanned overspends. It does not form part of the original budget and is preferable not being spent at all. If the statement is "£476m of the contingency is left" that means the contigency has been broken into as the project has gone into overspend. Hunt must think we're all thick!

  • rate this
    +4

    Comment number 395.

    Contingent funds are for unforeseen emergencies. They're not for spending otherwise. If they're spent, the budget is overspent.

    £2,000,000,000 contingency fund is a safety net for other than planned budgetary expenditure. There's still £476M left from this & therefore within budget say the organisers but they've overspent by £1,524,000,000 on top of 4x of original.

    This is unacceptable spin.

  • rate this
    0

    Comment number 394.

    From limpet_7R earlier
    I think James Naughtie's infamous "mispronounciation" that morning was actually spot on.

    I think James Naughties pronounciation was absolutely fitting and I think a lot of the people here could add a few choice words before and after the alledged "mispronounciation"

  • rate this
    +2

    Comment number 393.

    Just the £9.2bn then? Fabulous news for all those OAPs and Disabled people who are worse off every week.

  • rate this
    -3

    Comment number 392.

    This is good news. Credit must go to the previous & current government, as well as the organising team of the games themselves.

    I realise the 'underspend' is on the initial plan + contingency, but when compared to the fiasco of Wembley it has to go down as a success.

    Obviously proper project management tools were employed and the right kind of contracts in place. A blue-print for the future?

  • rate this
    0

    Comment number 391.

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

    When the real costings are released (if DC has not had them massaged) will our dear Jeremy have misled Parliament and the PEOPLE yet again
    Very Brown and Smelly

  • rate this
    0

    Comment number 390.

    What about giving a little of the money to the gamesmaker volunteers who have had to fund themselves to get to interviews and training. They will also have to pay for all their own travel and accomodation while they work to make the games GREAT.

  • rate this
    0

    Comment number 389.

    does anyone know how much revenue these games are supposed to generate?

  • rate this
    +3

    Comment number 388.

    Doesn't this just go to show that Jeremy Hunt is just a very stupid silly little Man!!
    just how stupid do our politicians take us for..?

    The people running this country are getting DUMBER AND DUMBER!!

  • rate this
    +3

    Comment number 387.

    9 billion that 9,000,000,000 for 2 weeks. Surely thats more than enough.

  • rate this
    +4

    Comment number 386.

    How much money is Tory boy Seb Coe making out of this ? How many companies does he have shares in that are providing equipment/services to the Games ?
    This is a legitimate request BBC so please don't let your over the top, right wing leaning moderators remove this comment.

 

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