Olympics face £160m raid on emergency fund
The Olympics is on schedule — but its legacy is under threat of financial constraints, according to a report by the Government spending watchdog.
The £9.3 billion project is likely to be hit by unexpected maintenance and security bills for venues between their completion and the start of the Games, resulting in a £160 million raid on the emergency fund, the watchdog said.
The National Audit Office said although construction was on track, more of the remaining £1.3 billion contingency fund for building and infrastructure is likely to be spent in the run-up to the Games.
The NAO raised concerns that there is no legacy tenant for the £540 million Olympic stadium or for the £334 million Olympic media centre in Hackney Wick, which is a long way from the main public transport links serving the Olympic Park in Stratford.
There are likely to be further cost pressures if the post-Games revenue from the sale of the taxpayer-funded Olympic village fails to meet forecasts. Amyas Morse, of the NAO, said: "The Olympic Delivery Authority has done well to keep its programme on track, and it is increasingly likely that the venues and infrastructure are going to be delivered on time and budget.
Nevertheless, there is still a long way to go, with less contingency funding available to meet unforeseen cost pressures."
The watchdog said there was a lack of clarity on "budgetary responsibilities" between the Government and the 2012 organising committee Locog, which raises its £2 billion budget towards the cost of staging the Games from commercial revenues. The watchdog warned that although Locog was privately funded, the taxpayer was exposed to any debts it may incur.
The NAO added: "Plans for the delivery of the Games need to be fleshed out, making sure that Locog is on track at least to break even." A Government spokesman said: "Big challenges lie ahead but we believe that the foundations for success are now in place."
