Page last updated at 02:07 GMT, Wednesday, 30 April 2008 03:07 UK

MPs criticise rising 2012 costs

Dame Kelly Holmes wins the 1500-metres gold in 2004
The government says it's working to deliver 'the best Games ever'

Organisers of the London 2012 Olympics have been accused by MPs of being "willing to spend money like water", as costs for the sports event soar.

The Culture, Media and Sport Committee says the budget, which has rocketed from 3.4bn to 9.3bn, has damaged confidence in the Games' management.

The project for an aquatics centre came under fire after the costs rose from an estimated 73m in 2004 to 303m.

But the government insists it has rigid cost control measures in place.

The committee, whose members are MPs from all parties, commended the progress made by the London Organising Committee (Locog).

'Low bid'?

However, the government's funding and planning of the event came in for heavy criticism.

The MPs expressed "doubts" over whether the organisers would be able to recoup the full 1.8bn they were banking on from the sale of land and property after the event was over.

The history of the aquatics centre shows a risible approach to cost control and that the Games organisers seem to be willing spend money like water
Culture, Media and Sport Committee

The priority must now be to keep a lid on the costs and ensure the final bill comes in "comfortably below" the 9.3bn mark, they said.

"Although it is not surprising that early assessments under-estimated the final costs, such a radical revision of cost estimates has been damaging to confidence in the management of the overall programme," they said.

"It has also exposed the government and Games organisers to the charge that the initial bid was kept artificially low in order to win public support."

The committee said that while the aquatics centre "might be spectacular and eye-catching", it also appeared "to be over-designed and will be an expensive way of providing the facilities for water sports needed during and after the Games".

"In our opinion, the history of the aquatics centre shows a risible approach to cost control and that the Games organisers seem to be willing spend money like water."

We are working tirelessly to plan, prepare and deliver the best Games ever - and to maximise benefits across the country up to 2012 and beyond
Spokesman
Department for Culture, Media and Sport

With more than 3bn built into the overall Games budget to cover contingency costs, any request by the organisers for additional funds would be "a major failure of cost control".

"The priority now should be to keep costs down: the mark of success in financial management of the Games will be to have kept expenditure to a level comfortably below the 9.3bn ceiling," the MPs' said.

John Whittingdale, the committee's Tory chairman, said the National Lottery causes, which lost out as a result of cash being diverted to the Olympics, should have first call on any unspent contingency money.

"We expect that the Games should be delivered comfortably within budget, given that there is a 60% contingency built in," he said.

The MPs expressed concern over the decision to site shooting events at the Royal Artillery Barracks, Woolwich, against the wishes of the sport.

'Double-counting'?

They also felt "disheartened" that ministers had so far failed to provide a nationwide strategy to use the Olympics to promote participation in sport.

The MPs said it may prove "very difficult" to raise 100m from the private sector for elite sport, as the government had required.

A spokesman for the Department for Culture, Media and Sport said it was "pleased" the committee had found much to commend in what has been achieved so far.

But it claimed the committee had "double-counted 500m of contingency funds", adding that "there is no suggestion of the 9.3bn being exceeded".

"We are working tirelessly to plan, prepare and deliver the best Games ever - and to maximise benefits across the country up to 2012 and beyond, which will be spelled out in a detailed Legacy Action Plan," he said.

"The funding package announced in March 2007 remains unchanged and robust and we have rigid cost control measures in place, monitoring progress at every stage of the project."

The spokesman said the overall cost of the venues "has not significantly altered", with the National Audit Office concluding that the budget "represented a significant step forward in putting the Games on a sound financial footing".

Shadow Olympics minister Hugh Robertson added: "The tragedy of all this is that every penny spent financing cost overruns, means less money spent on extending the sports opportunities available to young people."


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