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Last Updated: Wednesday, 22 November 2006, 13:25 GMT
Mayor denies Olympic cost 'mess'
2012 celebrations in Trafalgar Square
Critics say the Games finances are in chaos
Ken Livingstone has denied the 2012 Olympics finances are in chaos - as he contradicted what Culture Secretary Tessa Jowell told MPs on Tuesday.

Ms Jowell said the cost of the Olympic Park had risen from 2.4bn to 3.3bn, blaming inflation and the decision to spend 400m on a "delivery partner".

But London's mayor insisted the 2.4bn figure stood, saying any increase was due to other regeneration work.

"Nothing is a mess, everything is going exactly according to plan," he said.

He also told the BBC the 400m Ms Jowell said would be spent on a delivery partner - a private firm to bring the Games in on time and on budget - would actually be 250m.

Steel prices

Ms Jowell was questioned by MPs after speculation that the total cost of the Olympics was soaring as high as 8bn.

She refused to talk about the overall costs, restricting her comments to the 900m added on to the 2.4bn costs of the Olympic Park itself.

She said the rise was the result of a sharp rise in the price of steel, a decision to revise transport costs to take account of inflation in the years to 2012, and a 400m bill for "delivery partner" CLM.

These games will make a profit
Ken Livingstone

Ms Jowell was clear to say that these estimates did not include additional bills for regeneration or the cost of running the Games.

Mr Livingstone, asked if the financial plans were now in chaos, told BBC Radio 4's Today programme that most of the cost increase was attributable to new plans to put an extra 35,000 homes on the site, after 2012.

He said they wanted to put in all the infrastructure now, so it was not necessary to dig up the site all over again, in the years after the Olympics.

We should let the Olympics be staged in Athens every four years. No worries, no problems, no wasting more money
Michelle, Alton

And he said much of the money would be recouped, when it was eventually sold off.

"These games will make a profit, we have taken the most run-down and polluted place in southern England and, on the back of the games, we are going to regenerate it - it will be a vibrant new area."

Contingency row

He dismissed Olympic Delivery Authority (ODA) chairman Jack Lemley's claim he resigned because the project was running late and bedevilled by political disagreements.

Mr Livingstone said the American had had major surgery, after which it became clear "it was time for him to go". Mr Lemley denies any such claim.

But Mr Livingstone did admit he was at odds with the Treasury, over its demands for a 60% contingency fund - Mr Livingstone thinks it should be nearer 20%.

Ken Livingstone
Mr Livingstone said much of the cost would be recouped

He said he believed that such a large contingency fund would just encourage people to overspend.

Ms Jowell had indicated that earlier agreements had been for any overspends to be met by a combination of London council tax payers and lottery cash.

But Mr Livingstone said he was "determined" that there would be no increase in the 20 a year for 12 years each London council tax payer will pay.

And he said that paying a "delivery partner" was important if they were to avoid another Wembley - the 757m project currently running a year over schedule.

Ken Livingstone's bizarre denial of cost overruns has merely added to the confusion
Don Foster
Liberal Democrats

"We've brought it on to the private sector. Now you do have to pay them. But it does mean that we can expect that the games will be delivered on time and to budget," he told the BBC.

Later Prime Minister Tony Blair stressed his support for the 2012 Olympics, saying winning it was a "fantastic thing for Britain" - but he refused to put a cap on the amount London council tax payers would pay.

Meanwhile ODA chief executive David Higgins will say in a speech that critics should remember the regeneration being triggered in east London when looking at the cost of the games.

For the Lib Dems, Don Foster MP said the differing messages underlined the need for greater scrutiny of costs in Parliament.

"Ken Livingstone's bizarre denial of cost overruns has merely added to the confusion," he said.

The Conservatives have said the figures are still too vague and the 900m increase was "just a starting point".

The ODA and the government are reviewing the original budget and are expected to announce a revised financial plan in the New Year.

Ken Livingstone on the costs of the 2012 Olympics

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