Press Release - Preparations for the London 2012 Olympic and
Paralympic Games - Risk assessment and management
2 February 2007
Today’s report, which is the National Audit Office’s first on
the preparations for London 2012, identifies six main risk areas
which may impact on the Games:
- Delivering the Games against an immovable deadline.
- The need for strong governance and delivery structures given
the multiplicity of organisations and groups involved in the
Games.
- The requirement for the budget to be clearly determined and
effectively managed.
- Applying effective procurement practices.
- Planning for a lasting legacy.
- The installation of effective progress monitoring and risk
management arrangements.
Since London was chosen as the host city for 2012 some 18 months
ago, the layout of the Olympic Park in East London has been
finalised, nearly all the land has been acquired, and work on the
physical site is underway. Progress has been made in putting in
place the organisations to deliver the Games, including setting up
the Olympic Delivery Authority, which will deliver the venues and
infrastructure on the Olympic Park, and the London Organising
Committee of the Olympic Games and Paralympic Games, which is
responsible for staging the Games. The delivery structures are
complex, however, and a key challenge going forward will be to
achieve clear and quick decision making so that progress is not
held up.
Today’s report concludes that a major risk at present to the
successful delivery of the Games is the lack of a final agreed
budget. This will inevitably have a detrimental impact on the
Olympic programme if it is allowed to continue.
Substantial further public funding is likely to be required in
addition to the public sector funding package of £2.375 billion
agreed in 2003 and the £1.044 billion the Government is providing
towards the costs of infrastructure on the site of the Olympic
Park. In November 2006 the Secretary of State for Culture, Media
and Sport reported that the cost estimates for the Olympic Park had
increased by £900 million since the time of the bid, and a number
of areas of uncertainty remain which need to be resolved quickly so
that the budget can be finalised.
Sir John Bourn, head of the NAO,
said today:
“The London Olympic and Paralympic Games may seem a long
way away, but with a programme of this magnitude it is vital to
keep the momentum up. There is a lot more to do and a variety of
risks to be managed if the Games are to be a success. Failure in
any one area will impinge on others. Finalising the budget should
be a priority to allow the Olympic programme to move forward with
greater confidence and certainty.
“As well as learning from the experience of other cities that have
hosted the Games, I have also arranged with my counterpart in China
to learn lessons from the Beijing Games in 2008 that could usefully
be applied to London.”
Notes for Editors:
- Today’s report is the first in a series of National Audit
Office reports on the preparations for hosting the London 2012
Olympic and Paralympic Games. It considers the progress that has
been made since 6 July 2005 when the International Olympic
Committee chose London as the host city for 2012, and identifies
key risks and challenges going forward.
- Future National Audit Office reports will track progress in
preparing for the Games. We will also be reviewing the work to
establish the budget for the Olympic programme, with a view to
reporting our findings when the budget has been finalised.
- There are three principal stakeholders in the delivery of the
2012 Games – the Government, the Mayor of London and the British
Olympic Association. The primary focus of the National Audit
Office’s work was the Department for Culture, Media and Sport, the
lead government department for the Games, and the Olympic Delivery
Authority, which has been set up to deliver the Olympic venues and
infrastructure.
- Press notices and reports are available from the date of
publication on the NAO website, which is at www.nao.org.uk. Hard
copies can be obtained from The Stationery Office on 0845 702
3474.
- The Comptroller and Auditor General, Sir John Bourn, is the
head of the National Audit Office which employs some 850 staff. He
and the NAO are totally independent of Government. He certifies the
accounts of all Government departments and a wide range of other
public sector bodies; and he has statutory authority to report to
Parliament on the economy, efficiency and effectiveness with which
departments and other bodies have used their resources.
Press Notice 06/07
All enquiries to Neil Gadhok, NAO Press Office:
Tel: 020 7798 7020
Mobile: 07796 940 746