Sunday, February 04, 2007
The cost of the Olympics
When London won its bid to host the 2012 Olympics all the discussion in Wales centred on how to benefit from the spin-offs. Alas, things have now sunk to the stage where we are wondering what it will cost us.
Today's Observer reports that the final budget for the Games, which is due to be announced within the next six weeks, now appears likely to come in at more than £5bn - if separately funded regeneration schemes for the area around the Olympic park in east London are factored in. That would amount to more than double the figure that was cited when Britain was bidding for the games. The current expectation is for an overall funding shortfall of at least £1.5bn plus a further £1bn for VAT.
The Chancellor has been arguing for a major increase in the Olympics contribution from National Lottery receipts - taking as much as an additional £1.2bn more than the £1.5bn in lottery contributions that has already been budgeted. Recent media reports of possible increases in the lottery's share have sparked growing concerns among charities and local community leaders around Britain that 'good cause' projects currently funded by the lottery would be likely to suffer as a result.
The Chancellor's stance has reportedly run into staunch resistance both from the cabinet minister in charge of the Olympics, the Culture Secretary Tessa Jowell, and from London Mayor Ken Livingstone.
'It's all still in the balance,' a source involved in the discussions commented. Neither Jowell nor Livingstone was available for comment on the budget battle last night.
But a source who is close to the Culture Secretary said that she appeared increasingly anxious to finalise the projected costs of the games - particularly after a broadly positive report from the National Audit Office watchdog last week stressed the need to move ahead with getting a budget, and additional Treasury funding, in place.
Another issue that she is said to be keen to resolve is the size of the projected 'contingency fund' needed to cover further unexpected rises in the cost of the games.
The total could be anywhere from £1bn to £3bn, with the Treasury reportedly favouring the more cautious - higher - end of the scale and both Jowell and Livingstone arguing that this might merely encourage contractors and suppliers to run over budget.
Elected politicians receive regular reports on lottery expenditure within their constituency. What we are all worried about is whether this money will now be diverted to London to pay for the Olympics. If so then Wales will very definitely lose out.
Today's Observer reports that the final budget for the Games, which is due to be announced within the next six weeks, now appears likely to come in at more than £5bn - if separately funded regeneration schemes for the area around the Olympic park in east London are factored in. That would amount to more than double the figure that was cited when Britain was bidding for the games. The current expectation is for an overall funding shortfall of at least £1.5bn plus a further £1bn for VAT.
The Chancellor has been arguing for a major increase in the Olympics contribution from National Lottery receipts - taking as much as an additional £1.2bn more than the £1.5bn in lottery contributions that has already been budgeted. Recent media reports of possible increases in the lottery's share have sparked growing concerns among charities and local community leaders around Britain that 'good cause' projects currently funded by the lottery would be likely to suffer as a result.
The Chancellor's stance has reportedly run into staunch resistance both from the cabinet minister in charge of the Olympics, the Culture Secretary Tessa Jowell, and from London Mayor Ken Livingstone.
'It's all still in the balance,' a source involved in the discussions commented. Neither Jowell nor Livingstone was available for comment on the budget battle last night.
But a source who is close to the Culture Secretary said that she appeared increasingly anxious to finalise the projected costs of the games - particularly after a broadly positive report from the National Audit Office watchdog last week stressed the need to move ahead with getting a budget, and additional Treasury funding, in place.
Another issue that she is said to be keen to resolve is the size of the projected 'contingency fund' needed to cover further unexpected rises in the cost of the games.
The total could be anywhere from £1bn to £3bn, with the Treasury reportedly favouring the more cautious - higher - end of the scale and both Jowell and Livingstone arguing that this might merely encourage contractors and suppliers to run over budget.
Elected politicians receive regular reports on lottery expenditure within their constituency. What we are all worried about is whether this money will now be diverted to London to pay for the Olympics. If so then Wales will very definitely lose out.
