London's 2012 costs spiralling
24/01/2007 11:05  - (SA)  

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Krystyna Rudzki

London - A British government committee criticised the spiralling costs of the London 2012 Olympics and called for greater transparency from organisers on finances to ensure continued public support.

"Just 18 months after winning the bid, it is clear that many of the cost figures it contained are seriously outdated," said the report from an 11-member, cross-party Culture, Media and Sport committee into the funding and legacy of the games.

While accepting costs would inevitably rise, the report released on Wednesday said it was "vital that public confidence" was maintained.

"An authoritative figure for final overall cost, and details of how it is to be funded, are essential if this is to be achieved," the report said.

"But we are disappointed that the cost estimates have been found to be faulty so early in the process."

A budget has yet to be approved by the government.

But in November, Olympics Minister Tessa Jowell said infrastructure costs had risen by £900m from the £2.38bn figure quoted in the bid.

Some British lawmakers have speculated the total cost could reach more than £8bn.

The report also questioned the level of contingency funding. The Treasury has recommended a 60% contingency fund on top of the existing provision for each venue. The report said contingency "could amount to an almost open check if set at the level proposed by the Treasury".

The admission in November that the government had not included a £1bn additional tax bill in the initial budget was also regarded as "unsatisfactory".

"We are surprised that, given the original assurances about the rigor of the budgeting process, it is only now seen to be necessary to include this additional level of control and that it is such a significant cost," it said.

London residents should have a cap on the amount they would contribute to the Olympics, the report said, warning organisers should not rule out further government funding.

It also warned London organisers to consider the implications of failing to meet sponsorship, ticketing, and revenue targets.

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