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.