Venues and infrastructure for the 2012 London Olympic and Paralympic Games are on track to be delivered on time for the Games and the cost is currently forecast to be within the £9,325 million budget for the Games announced in March 2007, according to a progress report to Parliament by the National Audit Office. However, there is potential for further calls on the contingency fund, which is part of the budget for the Games. Previous experience shows that financial pressures and risks are likely to occur right up to the Games.
In 2009, it was decided that the Olympic Village and the Media Centre would be publicly funded after the economic downturn left the private finance plans untenable. These decisions were made on clear value for money grounds, but required some £621 million of contingency funding from within the budget, with the requirement reduced by savings elsewhere on the Olympic Delivery Authority’s programme.
The location of the Media Centre in the North West corner of the Olympic Park away from the main public transport hub at Stratford is a potential challenge to achieving the legacy aim of employment creation, at least in the short term. The recently formed Olympic Park Legacy Company is now responsible for securing the intended legacy benefits from the Olympic Park and associated venues, including the Media Centre.
During 2009, the Government Olympic Executive made progress in bringing together the delivery plans of the various organisations involved and developing an integrated programme. These plans need to be finalised so that testing can start in early 2011. The Home Office has prepared costed plans for its Olympic safety and security programme. However, the Home Office and the London Organising Committee for the Olympic and Paralympic Games (LOCOG) have not yet agreed the precise responsibilities, scope and costs for venues security operations.
LOCOG is intended to be self financing – raising income from sponsorship, ticket and merchandising sales, and revenues from the International Olympic Committee. While LOCOG is currently ahead of schedule in securing income, the Government – as the ultimate guarantor – has always been financially exposed should LOCOG’s costs exceed its income. To manage the risk of LOCOG’s being in deficit after the Games, the Government Olympic Executive is working closely with LOCOG to agree by October 2010 a balanced budget with a funded contingency.