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London 2012 Olympic Games and Paralympic Games: funding and legacy.

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The success of London’s bid to host the 2012 Olympic Games and Paralympic Games was the cause of national celebration. In particular, our victory over our nearest rivals provided a boost to national pride; but sooner or later, hard questions were bound to be asked. The vast majority still look forward to a successful Games but doubts have already emerged, both about the cost of staging the Games and about whether a lasting benefit can be achieved.

In many areas, significant progress has been made. The ODA is well advanced in preparations for construction and is ahead of the game in comparison to previous Host Cities. LOCOG’s activities are still fairly small-scale, but good work has already been done by the Branding Group. The LOCOG Nations and Regions Group has also made a good start on identifying benefits across the country, and we applaud its concept of a UK Games hosted in London.

However, just 18 months after winning the bid, it is clear that many of the cost figures it contained are already seriously outdated. Despite the Government’s assurances about the rigour with which its cost estimates had been reached, it was always likely that these would escalate over time. Nevertheless, we are concerned that costs have arisen which should have been identified at the time of the preparation of the bid. In particular, the “programme contingency” - on top of the contingencies built into the various construction projects - could amount to an almost open cheque if set at the level proposed by the Treasury. We are not particularly surprised at the increase in costs, and it should not be forgotten that substantial savings are being made in certain areas. But we are very disappointed that the cost estimates have been found to be faulty so early in the process.

The announcement that £900 million of extra costs - of which up to £400 million is for cost control - had already been identified confirmed that further revenue will need to be found, and the “sharing arrangement” under the Memorandum of Understanding will come into play. We believe that the Government’s apparent intention that any shortfall must be met exclusively from increased contributions from the National Lottery and the London Council Tax risks placing an unacceptable burden on both.

National Lottery distributors for the main “good causes” – arts, charities, heritage and sport – recognise the benefits to the UK which will flow from the Olympics and Paralympics, but they are already suffering a decrease in income because a significant part of Lottery funds are going towards financing the Games. A further call on the Lottery would deprive existing good causes of even more resources and threaten severe delay or damage to existing programmes. The London Council Tax precept should also not be seen as a cash fountain: the Government rightly stresses that the benefits should be felt across the UK, and Londoners should not be paying disproportionately.

  

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 editors comments   

Editor's comments - [  Eighteen months after the announcement of London’s victory in their bid for the 2012 Olympic Games, reality has set in and the scale of the challenges has become clear......... this document partly charts these challenges - it was published before the World financial crisis in 2008/9.  ]  Reference this?Cryer, J. (Year). This page title in italics. Retrieved date, from <this page's full URL>

In the text: Cryer (year)

 

APA reference for this document

 

Reference : Culture, Media & Sport Committee. (2007). London 2012 Olympic Games and Paralympic Games: funding and legacy. London: TSO

 

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Download this file (69i.pdf)69i.pdfCulture, Media & Sport Committee. (2007). London 2012 Olympic Games and Paralympic Games: funding and legacy. London: TSO
Last Updated on Thursday, 16 July 2009 10:14