NAO expects budget overrun in buildup to Olympics

Summary

Almost all of the Public Sector Funding Package for the 2012 Games may be required with little scope for further unforeseen costs to emerge in the eight months leading up to the event, according to the National Audit Office (NAO).

The report 'Preparations for the London 2012 Olympic and Paralympic Games: Progress Report December 2011: Department for Culture, Media and Sport’ (HC 1596) finds that that the Olympic Delivery Authority remains on course to deliver its work on the Olympic Park on time, within budget and to the standard required, but the whole of the £9.298 billion budget is likely to be required.

Progress on the 2012 Games includes:

by the end of September 2011 the project was 91.9% complete against a target of 92.5%;
14 of the 26 construction projects have been completed and handed over and the remaining projects are on course; and
the Olympic Delivery Authority has also either completed, or is on course to complete, its transport infrastructure projects, such as increasing capacity on the Docklands Light Railway.

However, detailed work by the delivery bodies has identified significant challenges. The likely cost of venue security for the taxpayer, for one, has nearly doubled: the latest estimate is £553 million, an increase of £271 million. The London Organising Committee of the Olympic and Paralympic Games (LOCOG) had estimated that it would need 10,000 security guards; the current estimate is for as many as 23,700.

In transport planning, there have been delays to the full integration of some elements of the transport programme. Until this is completed, it will not be possible to inform local authorities, businesses and individuals of the full impact of the Games on transport in London.

It will also be years before the value for money of legacy projects, a key element of London's bid, can be fully assessed.

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