The London 2012 Olympic Games and Paralympic Games: post-Games review - Public Accounts Committee Contents

Conclusions and recommendations

1.  The £9.298 billion Public Sector Funding Package is set to be underspent by £377 million, but there is no comprehensive picture that includes all of the wider costs associated with delivering the Games and their legacy. The Department for Culture, Media and Sport (the Department) has always reported against costs covered by the Public Sector Funding Package, but this does not include other public sector costs associated with the Games and legacy. We welcome the Department's written explanation of the costs outside the Funding Package. In its formal response to this report the Department should set out its plans for how it will publicly report the wider costs, and how it will take account of the associated public sector costs in any evaluation of benefits secured from the Games.

2.  Venue security was a sorry episode—poor planning, and then poor delivery by the private sector. The scale of the requirement for venue security was vastly underestimated, and the estimated cost—over £500 million at the time of our hearing—could only be met from the Public Sector Funding Package due to underspends elsewhere. In the event, G4S failed to provide the full number of guards required, and has paid a price for that failure. The Home Office should capture and share the lessons from the letting and delivery of the security contract to prevent such a failure happening again, focusing on the importance of taking early and timely decisions, developing a full understanding of capabilities, capacity and costs, and ensuring adequate public transparency around any settlements.

3.  It is important for public confidence that the full legacy is delivered and the whole of government shares this responsibility. Many central and local government organisations have responsibility for projects in the legacy programme, and the Cabinet Office is now responsible for coordinating and assuring delivery of the legacy as a whole. The Cabinet Office should report publically at the end of September 2013, and each year thereafter for the rest of the decade, on progress with implementing legacy commitments.

4.  The Cabinet Office risks missing the boat on capitalising on the success of the volunteering programme. The volunteers at the Games did a fantastic job and LOCOG is to be congratulated for organising the volunteering programme so effectively. We were told about programmes to support local sports clubs and their effective use of volunteers, and about the work of the Join In Trust to encourage volunteering more widely. But we are not convinced that as much as possible is being done to build a lasting volunteering legacy. The Cabinet Office should publish a strategy for how it will build a lasting volunteering legacy both within sport and beyond, including measures of success.

5.  In the early days of competition there were unused accredited seats which could have been sold to the public. While we recognise the need for some accredited seats, the 12%-15% set aside proved to be excessive and the empty seats added to the disappointment of those who could not buy tickets for sold out events. Each empty seat also represented revenue foregone. Learning from this experience, the government, possibly alongside other governments and event organisers, should challenge the demands of international sports bodies and media organisations for large numbers of accredited seats.

6.  We are not convinced that the Lottery and Exchequer interests in securing financial returns from development of the Olympic Park will be sufficiently protected by the existing arrangements. The diversion of funds away from lottery good causes to the Public Sector Funding Package for the Games is meant to be offset by them sharing in future returns from development of the Olympic Park site. But lottery bodies are not involved in decisions about the timing and value of sales, which will be made by the London Legacy Development Corporation (a mayoral body) over the next two decades. On current projections the Development Corporation predicts that the first payment to the Lottery will not be until the mid-2020s. The government should develop a mechanism to ensure that the London Legacy Development Corporation's decisions are transparent, that decisions prioritise the interests of the Lottery, and that returns to the Lottery are closely tracked over the years to come.

7.  There is a real opportunity for other projects to benefit from the experience and skills gained in delivering the Olympic and Paralympic Games. The lessons include those already set out by the Olympic Delivery Authority and by the NAO in its most recent report, and include areas where we have seen weaknesses in other public sector projects. Of particular importance in our view are the benefits of: investment in up-front planning; designing bespoke delivery models; getting the right people; continuity of senior staff; strict project and risk management; and tight financial control. The government now has the Major Projects Authority to lead on best practice, but must not passively rely on the Major Projects Authority as the answer to its problems. The government should formalise the collation and dissemination of lessons from the Games to aid delivery of other major projects, and make it a priority to deploy people in roles that use their experience and skills gained from involvement in the Games.

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Prepared 19 April 2013