Pity there aren't lessons in how not to waste £20bn
There's a lady who's sure
All that glitters is gold
And she's buying a stairway to heaven
The trouble is, she's buying it with our flaming money.
Yesterday she gave us yet another update on progress so far: she's now about halfway up.
Tessa Jowell's latest Commons statement on the 2012 Olympics budget gave us rather more detail than we've had before, with key points as follows:
- Of the £9.325bn "budget" announced in March, £1.226bn has now been allocated to spending outside the Olympic Delivery Authority (ODA). That includes a hefty £0.3bn contribution towards breeding the Fatherland's "elite" superathletes (see previous blogs eg here), and £32m giving London a lick of paint (the "look of London"). It also includes security...
- Security- the estimate has now increased even further, from £600m to £838m. Remembering of course that it was originally meant to cost... er... nothing (eg see this blog)
- The ODA budget is now £6.090bn, of which £1.9bn is on site preparation and infrastructure, £1.2bn on venues (including an optimistic £0.1bn for those outside the Olympic Park), and £0.9bn for transport (just a small contribution to the much bigger £7.2bn total transport bill). There is also now an additional £0.35bn for security during construction, implying a total security bill of £1.2bn: lovely jubbly for those nice chaps in the security industry
- The remaining unallocated contingency reserve is now £2.009bn, which has clearly been fudged so that the big figure is still (just) a 2.
So will the remaining £2bn contingency reserve be enough? Well, like the man said, sometimes words have two meanings. There's a Contingency Reserve, and then there's a "contingency reserve". One is designed to cover "contingencies", and the other is designed to cover exposed political backsides.
Officials yesterday admitted there was only an 80% chance of this "contingency reserve" holding, and that they hadn't even quantified some of the risks (eg that they may need to spend even more on security). Translation- this is not going to cover all contingencies.
In reality, we haven't been told what the real contingency reserve looks like, and in all probability nobody wants to contemplate it. But here's a simple experiment you can try for yourselves at home:
The fag packet experiment
Get an old fag packet and write down this sum: £2.7bn minus £2bn equals how much of the contingency reserve has already been drawn down since it was announced in March. Answer: £0.7bn drawdown.
Now divide £0.7bn by the number of months which have passed since March. Answer: £0.08bn drawdown per month.
Now work out how many months are left between now and the 2012 opening ceremony. Answer: 54.
Now calculate 54 times £0.08bn. Answer: £4.32bn
Now explain WTF anyone thinks £2bn might be anything like enough to cover the remaining contingencies. Especially when each passing day makes the clock tick louder.So £4bn? £5bn? Pick your own number.
£20bn remains BOM's ballpark estimate for the whole shooting match- see here for summary.