OLYMPIC BUDGET 'UNREALISTIC'
The government has been accused of being "entirely unrealistic" in estimating the cost of the 2012 Olympic Games.
The Public Accounts Committee said that government ministers used "wishful thinking" and "ignored foreseeable major factors" in their budgeting, including security and VAT.
At the time of the final bid in July 2005, costs were estimated at just over �4bn. That budget has since risen to an estimated �9.325bn.
Back in 2003, consultants put total cost of building and staging the Games at just �1.796bn.
Policing and security costs have added a further �600m and the "delivery budget" has risen from �16m to �570m.
The committee also claimed that there had also been a lack of private sector competition to build the main venues, with only one bidder for the contract of main stadium and cast doubts over the current budget of �9.325bn.
It called on the Department for Culture, Media and Sport to
finalise its "legacy benefits" planning and set out benefits for the
UK as a whole.
Committee chairman Edward Leigh said: "It is now clear
that the estimated cost at the time of the bid, just over �4 billion, was
entirely unrealistic.
"It ignored foreseeable major factors such as
contingency provision, tax obligations, and policing and wider security
requirements.
"At the same time, the estimate of the extent to which
the private sector would contribute funding towards the Games has proved little
more than wishful thinking."
He said the increase in public funding was "astonishing" and the "legacy benefits" had not been precisely detailed.
But Olympic secretary Tessa Jowell claimed that the report had focused largely on the early stages of budget planning, stating: "A lot has changed since then and there is clear progress to report."
She said construction of the Olympic stadium was ahead of schedule and preparatory work had been done on time and on budget.
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