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Last Updated: Monday, 10 December 2007, 16:20 GMT
2012 Olympics budget 'on track'
Artist's impression of 2012 stadium
The cost of hosting the Olympics has already risen dramatically
Olympics minister Tessa Jowell has said a "thorough assessment of all potential risks" has backed the 9.325bn budget for the games she outlined in March.

In a written statement to MPs Ms Jowell said "months of careful scrutiny have confirmed" the budget - four times the original estimate - would be enough.

She said: "The project has high levels of public support and is on track."

The statement came as the BBC learned a report to ministers said there was a 20% chance the budget would rise again.

Now we look ahead to what will be a dramatic 2008, with the first building work starting on the Olympic Park site
Tessa Jowell
Olympics minister

In the House of Commons, the Conservative chairman of the culture media and sport committee, John Whittingdale, asked whether any of the 2bn contingency fund in the Olympic budget would remain unspent.

Ms Jowell said it would not be clear until after the games - but she had "grounds for optimism" that it would.

In November, the Commons public accounts committee attacked ministers over planning for the event, saying foreseeable costs had been "grossly underestimated".

Ms Jowell, who has faced widespread criticism over the escalating cost of the games, has now set out the most detailed breakdown of expected costs so far.

It shows that 500m of the contingency budget has already been allocated to the Olympic Development Agency.

Ms Jowell also said a "detailed account of progress across the Olympic programme" would be provided when the first Olympic annual report was produced in the New Year.

She said the delivery authority would also issue "a summary of the baseline scope, aligned budget, programme and risks".

'Obvious omission'

These figures would "provide a robust baseline for future reporting", she said.

Ms Jowell told MPs: "This statement shows... the budget is consistent with the funding package I outlined in March.

"Months of careful scrutiny have confirmed that the Olympic Delivery Authority has the money it needs to deliver the venues and infrastructure for a terrific summer of sport, as well as leaving a long-term legacy for one of the most deprived parts of the country.

HOW 2012 ESTIMATES HAVE CHANGED
2003: Consultants Arup put total cost of building and staging the Games at 1.796bn
2003: Tessa Jowell launches bid in May telling MPs it will cost 2.375bn - including a 50% contingency
2005: Bid succeeds in July with "prudent" estimate of preparing for games of 2.4bn
2006: Tessa Jowell says Olympic Park costs up to 3.3bn
2007: Olympic Park budget now at 5.3bn - including regeneration and infrastructure
2007: Total budget, including contingency, security and tax, reaches 9.35bn

"Now we look ahead to what will be a dramatic 2008, with the first building work starting on the Olympic Park site, the Beijing Games and the start of the four-year countdown to London 2012."

For the Conservatives, shadow Olympics minister Hugh Robertson said the statement provided a "welcome initial baseline but falls far short of the full and open budget we had been seeking".

He added: "The obvious omission is any mention of the mass participation sports legacy which was the key commitment in the London 2012 bid but, as yet, remains uncosted and unfulfilled.

"Monthly cash flows and a breakdown of the contingency are also needed if we are to ensure the budget doesn't increase further."

Liberal Democrat Olympics spokesman Tom Brake said it was a "relief" the budget had not breached the benchmark of 9.3bn.

"This has to mark the end of handouts from lottery good causes being used to pay for cost overruns.

"From now on, both the Olympic Delivery Authority and their contractors will have to cut their cloth to keep within this budget."

Britain's Olympic budget

Olympic Delivery Authority - detailed breakdown

Project Cost (m)
SITE PREPARATION AND INFRASTRUCTURE
Powerlines 282
Utilities 255
Enabling works 364
Structures, bridges, highways 830
Contribution to Prescott Lock upgrade 5
Other infrastructure 206
Sub-total 1,942
VENUES
Stadium 496
Other Olympic Park venues 574
Non-Olympic Park venues 101
Sub-total 1,171
TRANSPORT
Stratford regional station 119
Contribution to DLR upgrade 86
Thorntons Field relocation 47
Contribution to North London line upgrade 110
Other capital projects 178
Other operating expenditure 357
Sub-total 897
OTHER PARKWIDE PROJECTS
Logistics for site construction 337
Section 106 and master planning 127
Insurance 50
Security for park construction 354
Sub-total 868
OLYMPIC VILLAGE, PROGRAMME DELIVERY, TAXATION
IBC/MPC, Olympic Village 492
Programme delivery 647
Corporation Tax and net interest 73
Sub-total 1,212
Total 6,090
Remaining contingency 2,009
Max funding available 8,099



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How the olympic budget breaks down



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