London 2012 organisers will face another round of searching questions over their spiralling budget when they appear before the House of Commons Public Accounts Committee today.
For the first time since the Olympics Minister, Tessa Jowell, announced in March that the funding provision for the project had leapt to £9.3 billion from £2.375bn at the time of the bid in 2005, MPs will get the chance to grill the government and the Olympic Delivery Authority on the rising costs.
The hearing comes at a time when ministers and London 2012 bosses are under renewed pressure over the mega-project's finances.
Last month the British Olympic Association chairman Lord Colin Moynihan broke ranks to criticise the government for a lack of financial transparency on the budget. As a member of the Olympic board, Moynihan's comments caused considerable unease.
A few days later, Jowell conceded that the final "baseline" budget for the Games was still being worked out – an admission described by opposition politicians as "startling".
Against this backdrop, this afternoon's hearing is likely to be uncomfortable for the ODA chief executive, David Higgins, and Jonathan Stephens, permanent secretary at the Department for Culture, Media and Sport and accounting officer for the project.
Committee members will want to know why, eight months after Jowell announced the budget, there seems to be so little detail.
They will ask exactly what has been spent so far and how much of the £2.7bn of contingency set aside for the project has been allocated.
Committee chairman Edward Leigh said: "There's no possible reason for hiding anything in the budget. The more we shine the spotlight on these people, the more we will get down to the nitty gritty of these figures."
Organisers and ministers argue that they cannot be too open because much of the information is financially sensitive.
On the accusation that costs are spiralling out of control from 2005 forecasts, they say a direct comparison is impossible. "It's like comparing apples with pears," said a DCMS spokesman yesterday. But that begs the question why more detailed analysis was not done at bidding time. And if the sums were wrong then, what's to say the £9.3bn announced by Jowell in March is more reliable?
With 4½ years to go until the start of the Games, organisers know they need to get to grips with the debate on costs.
The unpalatable truth is that the final bill is unlikely to be known until some time after the Games are over.
How the costs rose
July 2005* July 2012
Total funding package £2.375bn £9.3bn
Total cost of sports
venues / core costs
of Olympics £573.1m £3.08bn***
Regeneration £1.044bn £1.67bn
Main stadium £281m £496m
Aquatics centre £73.1m £150m**
*Costs submitted at time of bid in 2005 but worked out, according to International Olympic Committee rules, on the basis of 2004 prices.
**Final approved forecast for the aquatics centre has not been announced but is estimated to be somewhere between £150m and £200m
***While the 2005 figure is specifically for the Olympic venues, the 2012 number includes all associated costs in redeveloping the main Olympic park in Stratford. The actual venue costs will not be known for some time.
London 2012 Olympic Games stadium design unveiled
Guiding hand to make the most of the Olympics
Loffreda backs Argentina to be seventh nation
No comments:
Post a Comment