OLYMPIC COSTS – THE FACTS

Recent news about the budget for the 2012 Olympic Games must have left many of you wondering what is going on. If it is any consolation, it has often felt way on the London Assembly, since those responsible would not disclose the full figures.
After twenty months of lobbying, these figures have at last been disclosed, I thought it would be useful for you at this stage to have a brief guide to where we stand.
Ever since London won the bid in 2005, the Mayor has insisted that the cost of the Games was under control.
Tessa Jowell’s statement on 15th March finally confirmed what we have always suspected – the cost of the Games has rocketed. The most welcome part of Jowell’s announcement is that, in future, all the Olympic figures will be independently reviewed by the National Audit Office to restore public confidence in the financial management of the Games.
Two organisations will spend the money:
· The Olympic Delivery Authority (ODA) will ‘build the theatre’ – infrastructure, venues, land remediation, etc. The public sector, London taxpayers and the lottery will fund this expenditure.
· The London Organising Committee for the Olympic Games (LOCOG), will ‘put on the show’ – everything from the opening ceremony to the closing ceremony. This expenditure will be funded by the private sector from ticket and merchandising sales, TV rights and sponsorship.

The key elements of the Olympic budget are:
Expenditure on: Original budget New budget Increase
Olympic Park and Venues £2.03 billion £3.1 billion + £1.07billion
Infrastructure & regeneration £1.04 billion £1.7 billion + £656 million
ODA contingency NIL £500 million + £500 million
Elite sport and Paralympics £345 million £390 million + £45 million
VAT NIL £840 million + £840 million
Wider security NIL £600 million + £600 million
Additional contingency NIL £2.2 billion + £2.2 billion
TOTAL £3.4 billion £9.3 billion + £5.9 billion
Tessa Jowell’s statement added that this budget would be funded as follows:
· Government: 64% ·
Lottery: 23% ·
London: 13%
The London Assembly has summoned Sir Roy McNulty and David Higgins (Chair and Chief Executive of the ODA) to our Olympic Plenary meeting, which will take place on 25th April. This will be the first opportunity we have had to question the Olympic Delivery Authority about its budget. We will make sure we scrutinise every aspect thoroughly.