Preparations for the London 2012 Olympic and Paralympic Games – Risk assessment and management

“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.”

“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.”

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.

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