Preparation for the London 2012 Olympic and Paralympic Games - Public Accounts Committee Contents


2  The costs and benefits of the Games and the legacy

3.  We were clear in our report that the Public Sector Funding Package for the Games is and remains £9.3 billion. At the end of May, £476 million of the Public Sector Funding Package was uncommitted. After allowing for the contingency set aside by the Olympic Delivery Authority to meet known risks and the Department's mid-range estimate of the cost in the event that all risks emerge, the remaining headroom in the Funding Package was £136 million.

4.  There are two matters, however, that cause us concern. The first is the difficulty we have experienced in pinning down the financial position, particularly the quantification of risk. The Department has now provided helpful clarification, but it has been too difficult to extract the necessary information. The situation has not been helped by inconsistencies in the Department's evidence to the Committee. There are also lessons here about the importance of using clear and unambiguous language. Failure to do so stands in the way of transparency and accountability.

5.  The second area of concern to the Committee relates to the costs outside the Public Sector Funding Package. We accept that some programmes contributing to the legacy may be part of normal business for government departments and other public bodies. But the Programmes are overseen by the Department's Olympics Legacy Board and the costs are additional to the £9.3 billon. These costs include the original £766 million purchase of Olympic Park land, which the Department expects will be recouped from land sales, although in the current economic climate nothing is certain. They also include costs incurred by government departments and their agencies, for example the £57 million cost of staffing the Government Olympic Executive. Furthermore, substantial costs associated with the transport infrastructure programmes may bring lasting benefit but they were incurred to support the Olympics possibly at the expense of other transport infrastructure projects, like the extension of the Docklands Light Railway.

6.  Our concern is that such costs are not drawn together in one place, unlike the costs incurred within the Public Sector Funding Package. It is disappointing, therefore, that the Department does not intend to produce a single auditable account after the Games. In the interests of transparency around an event of huge national interest, we remain of the view that such an analysis should be produced. We also consider that any assessment of the legacy benefits from the Games should, within practical limits, set out the associated costs. The Department has told us that it expects the costs of individual legacy programmes to be identified as part of its assessment of the legacy benefits. We are looking to the Department to make sure that this is done, and collated to support the public understanding of the costs and benefits of the Games and their legacy.


 
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© Parliamentary copyright 2012
Prepared 19 July 2012