MPs set to condemn spiralling budget for 2012 Olympic Games

2012 Games: is the cost spiralling out of control?

MPs are preparing to issue a scathing condemnation of the soaring cost of the 2012 Olympics.

In a report to be published next Tuesday, the Commons public accounts committee will criticise the bill for the Olympics, which has spiralled from about £3.4billion to more than £ 9billion. One source said: "It's a hardhitting report."

One MP on the committee, Labour's Don Touhig, has branded the multibillion-pound rise as likely to go "into the Guinness Book of Records for the most catastrophic financial mismanagement in the history of the world".

Meanwhile, the cost of buying land for the Games and compensating its previous owners will be £30 million higher than originally forecast.

The London Development Agency said the original budget for taking possession of the Olympic Park site in Stratford had been £594 million, but by the end of the last month £578.4million had already been spent.

In reply to a freedom of information request it added: "The current estimated outturn budget for land and disturbance compensation payments is £624.41 million, with the increase of £30.37 million funded from the approved budget contingency."

Nearly 500 homes and almost 200 business premises have been acquired, with only one home being bought by compulsory-purchase. The LDA stressed the contingency fund was included as part of an overall budget of £1.4 billion for the Olympic land project.

An LDA spokesman said: "There has been no increase in the agency's overall land acquisition budget.

"As part of prudent planning to accommodate rises and falls in land values over a two-year period, a contingency was set which covers the change in costs.

"These were forecast back in November-2006 and remain unchanged." A Department for Culture, Media and Sport spokesman said: "Land acquisition and sales in the Lower Lea Valley area being used for the 2012 Games are issues for the London Development Agency.

"Such costs are not included within the overall Olympic budget but, in any event, this does not affect in any way the £9.3 billion total outlined by Tessa Jowell to Parliament last year."

The Conservatives called for ministersto be more transparent about costs. Shadow sports minister Hugh Robertson said: "This comes as no surprise. However, it does reinforce the need for a much more open budget."

Richard Bacon, who sits on the public accounts committee, added: "This is a worrying development. In the current market it's surprising they could not obtain the land they need within their original budget." He refused to discuss next week's report.

In November the committee questioned Jonathan Stephens, permanent secretary at the Department for Culture, Media and Sport, and David Higgins, chief executive of the Olympic Delivery Authority.

Committee chairman Edward Leigh suggested the Government had either acted in bad faith or been incompetent over the budget.

Mr Stephens stressed the Olympic project was equivalent to building something twice the size of Heathrow Terminal 5 in half the time.

Create a FREE account to continue reading

eros

Registration is a free and easy way to support our journalism.

Join our community where you can: comment on stories; sign up to newsletters; enter competitions and access content on our app.

Your email address

Must be at least 6 characters, include an upper and lower case character and a number

You must be at least 18 years old to create an account

* Required fields

Already have an account? SIGN IN

By clicking Create Account you confirm that your data has been entered correctly and you have read and agree to our Terms of use , Cookie policy and Privacy policy .

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged in