"Real Risk" Of Olympics Budget Overrun

Rachel Holdsworth
By Rachel Holdsworth Last edited 74 months ago
"Real Risk" Of Olympics Budget Overrun

It's panto season, kids! The National Audit Office has released its latest progress report into the Olympics and says the budget is currently balanced so tight, any more unforeseen costs will likely push the Games over its allotted funds.

Oh no it won't! says Olympics minister Hugh Robertson:

I am very confident the Games can be delivered on [or] under budget... We have already doubled the spending on security and it was always in the back of my mind that security costs were going to rise.

Oh, good. So long as it was in the back of someone's. But wait, what's this?

Oh yes it could! says the NAO. Costs have eaten into every bit of slack in the £9.3bn budget (already increased from the original £2.4bn estimate) — the latest increases are a confirmed extra £271m for security (which we've been expecting) and another £41m for the Olympic and Paralympic opening and closing ceremonies. And the NAO goes on to say:

Moreover, important issues relating to the cost and staffing of venue security and restrictions on transport in London are still unresolved.

They're concerned that any more 'unforeseen' developments — or, say, a worsening in the global security situation — could bust that budget. We were also a bit surprised to note that planners still can't gauge the full impact of the Games on local areas, businesses and individuals because of delays to "full integration of some elements of the transport programme".

But at least there'll be no repeat of Athens's panic to get stadia ready on time: over 90% of the construction is complete, with 14 of the 26 venues finished and handed over.

Photo of the stadium — taken on Sunday — by World of Good from the Londonist Flickr pool

Last Updated 06 December 2011

Hugh Redwood

I wondered how long the additional costs would take to come out of the woodwork.  From my experience working on some of the projects and, admittedly some hearsay, it was extremely unlikely to come in within budget.    I must say they've done an excellent PR exercise to date but this is probably the first independent report on the reality of the situation.  Is this the start of the bad news .... Let's hope not.

Sophie Hobson

Let’s hope the games themselves will recover a large part of
the cost. Otherwise we risk the financial side overshadowing the games when
they are over.
Sophie Hobson, deputy editor, LondonlovesBusiness