London 2012 Olympic budget examined

At the time of London's bid to host the 2012 Olympic and Paralympic Games, the cost of the Games was estimated to be just over £4 billion. The costs were to be met by public sector funding of £3.4 billion, with a further £738 million from the private sector.

After London was awarded the Games, the DCMS and the Olympic Delivery Authority reviewed the cost estimates and in March 2007 announced a budget of £9.325 billion. The Department has stated that public sector funding will not exceed this figure.

The March 2007 budget included contingency provision of £2.747 billion, a sum that was not included at the time of the bid. The March 2007 budget also included a preliminary estimate of £600 million for policing and wider security, over and above the cost of site security during construction. No estimate for the cost of policing and wider security was included at the time of the bid.

In addition, the Olympic Delivery Authority's programme delivery budget has risen to £570 million, compared with an original estimate of just £16 million. Cost estimates have increased by £5.3 billion but a significantly lower expectation for private sector funding - towards the cost of venues, infrastructure, and the Olympic Village - means that public funding has increased by £5.9 billion. The final cost will depend on disposal of assets after the Games. There is no basis on which to measure achievements regarding the projected legacy benefits of the Games.

This report follows the July 2007 National Audit Office report, 'The Budget for the London 2012 Olympic and Paralympic Games' (HC 612).

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