Friday, March 30, 2007

London Costs Continue to Soar | More than Double

London 2012 costs continue to soar and the government has revised its budget to reflect the increase. It went from 4 billion (pounds) to more than 9 billion (pounds).

See inside for more...

1 comment:

ITV said...

www.itv.com

The cost of hosting the 2012 Olympic Games in London is soaring with the Government announcing a revised budget of more than £9 billion.

The original estimate for the hosting the games was £4 billion but Culture Secretary Tessa Jowell insists the extra £5 billion will be money well spent.

The big increase in the cost of staging the games has provoked anger among critics.

To cries of "scandalous" from the Opposition benches, Ms Jowell told MPs that central government provision for the 2012 Games would now be £6 billion. She said the Lottery will make an extra contribution of £675 million.

Shadow Olympics minister Hugh Robertson protested that in less than a year there had been a trebling in the budget for which the Government was responsible.

And he accused ministers of "raiding" the Lottery to make up the funding shortfall, penalising clubs and small organisations.

In a detailed statement to the Commons, Ms Jowell said when Britain put in its bid for the Games, the costs of the Olympic Park and infrastructure were put at about £3 billion, plus £1 billion for regeneration.

After a detailed review, the Olympic Delivery Authority will be given a budget of £5.3 billion to cover construction costs up to 2012.

This comprised £3.1 billion for Olympic parks and venues, £1.7 billion for generation and infrastructure and a £500 million allowance for programme contingencies.

The ODA will pay £840 million in tax but that amount will be "covered in full by the Government contribution".

She said the Government had set a "prudent" contingency of £2.7 billion which can be drawn on only under "very tight conditions" to ensure that "the timetable is met and quality maintained".

A figure of £600 million had been allocated for wider security.

Ms Jowell said at the time of the bid, the Lottery and London contribution was estimated at £2.4 billion and that since then the Government had announced it would contribute a further £1 billion.

"I can announced today that central government provision will be £6 billion," she said.

"This comprises the £1 billion already committed for Olympic regeneration, the funding of the tax bill, broader regeneration and infrastructure within the Park, wider security and contingency."

Without any further increase for London council taxpayers, the Mayor will, over the lifetime of the programme, be making a further £300 million available.

The Lottery will make a further contribution of £675 million, making a total contribution of £2.2 billion.

Ms Jowell said she planned to "transfer" after 2009, £425 million from the Big Lottery Fund and £250 million from other good causes.

"The decision has been taken only after very careful consideration and implementation will only take place after full consultation about the implications with the Lottery distributors and other stakeholders," said Ms Jowell.