Tuesday, April 22, 2008

Deeper Into The Olympic Money Pit

The pit takes shape

It turns out the policing for that shambolic Olympic torch relay through London cost us £750 grand. Fantastic.

Meanwhile, the 2012 fiasco grinds on , with the Public Accounts Committee issuing the latest report today. We blogged the original NAO report and the PAC meeting (see here), so we don't need to go into too much detail. Suffice it to say, the Report catalogues a raft of incompetence and deceit that would simply not be tolerated anywhere outside of government:
  • Deliberate deceit - "Contrary to good practice, the Department did not include programme contingency, now £2.7 billion, because the scale and complexity of the undertaking were not appreciated at the time of the bid. The costs of tax and security, now estimated at over £1.4 billion, were also excluded from the estimates as they were uncertain. Yet £738 million of funding from the private sector was included, despite not being supported by robust analysis."
  • More deliberate deceit - "The revised public sector funding package of £9.325 billion does not include all of the activities on which delivery of the Games and its legacy depends... It excludes expenditure of £650 million by the London Development Agency to acquire the land for the Olympic Park, the private sector’s contribution to the costs of the Olympic Village (which is still being negotiated), and planned expenditure of some £2 billion on staging costs."
  • Yet more deliberate deceit - "Despite the £5.9 billion increase in the public funding for the Games, the Department has not specified what will be delivered in return for this expenditure and the current budget cannot be reconciled to the commitments in the original bid." Translation: lavish promises were made about long-term legacy benefits that were never any more than utter cobblers.
  • Criminal wishful thinking - "Revised expectations for private sector contributions have increased the estimated cost to the public sector by £748 million." Translation: the private sector has failed to come up with anything like their assumed contributions (would you want your company logo stamped on a disaster?)
  • More criminal wishful thinking - "The Olympic Delivery Authority is having difficulty generating supplier competition for some venues." Translation: the contractors have learned to avoid cover bids, so now only one will bid for each job on a take it or leave it basis (see this blog).
  • Yet more criminal wishful thinking - "The estimated £675 million reimbursement to the Lottery is inherently uncertain as it is based on estimated proceeds from future land and property sales, and on an agreement with the Mayor of London which is not legally binding."

Nothing in the PAC Report makes us waver from our long-standing £20bn all-in cost estimate.

And financial expert Tess remains "at the controls".

1 comment:

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