A man bored of London is bored of Life

The Cost of London 2012

The cost of 2012

The original Olympics budget of £2.4 billion has been bumped up to a whopping £9.3bn. The spiralling cost has seen more hikes than Paris Hilton's hemline and, by the end of last year, it became clear that the discrepancy in cost was more than an accounting blip. Jack Lemley, who quit his £1,000-a-day post as chairman of the Olympic Delivery Authority claimed that costs were soaring on an "exponential basis". By March 2007, when Tessa Jowell announced the revised budget, it stood at nearly four times the original estimate.

Separate from this budget is the cost of actually staging the Games, which stands at £2bn. This will be raised from the private sector by the London Organising Committee of the Olympic Games and Paralypic Games (LOCOG), which will raise the money through commercial partners, broadcasting rights, ticketing and merchandising. 

One of the main concerns for Londoners is that they will have to fork out extra council tax to pay for any further rises in costs. "It is a possibility that costs will rise", says Dr William Jennings, an expert in risk management at the London School of Economics. "If that happens, the costs will come from Londoners' council taxes. Given the repercussions of a politician announcing it will fall to Londoners, it's more likely it will be paid for nationally, but whatever happens we will end up paying".

Arts, heritage, sports and charity campaigners have also expressed dismay that the public sector funding package for London 2012 includes an additional £675m diversion from the Lottery from 2009. The Lottery was originally expected to contribute £1.5bn, but that figure rose to £2.2bn to deal with a black hole in the governments' original calculations.

And despite a recent glowing report from the IOC when it visited London, there is still a possibility that work on key venues may not be done according to timetable, requiring extra payments to contractors to hire more labour - as happened in Athens. Other issues such as the doubling in steel prices since London won the games are simply out of the organisers' control.

 

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© 2008 Paul Kavanagh. All rights reserved.