Olympics over budget
The true cost of the London 2012 Games for the UK taxpayer comes in at over £12 billion, £2.7 bn more than the 9.3bn budget, a Sky investigation has revealed.
This means the cost of the Olympic and Paralympic Games is approximately six times the £2.37 billion pounds that was originally quoted when London bid for the Games in 2005.
That original public sector funding package, which is primarily cash to build the venues and provide security and policing, was increased in 2007 to approximately £9.3bn after a review of the figures.
However the extra money, revealed by Sky comes on top of this £9.3 bn. The additional cash includes spends such as more anti-doping control officers, money for local councils for their Olympic torch relay programmes, cash spent on legacy schemes, paying tube workers not to strike, governmental operational costs, the cost of the Olympic Park Legacy Company, legal bills over the stadium tenancy decision and extra cash to UK Sport.
The figures also take into account the cost of buying the land for the venues at £766 million, remediation of that land and legal costs associated with that.
The additional money calculated by Sky does not include extra counter terrorism funding of £1.131bn being allocated to the police despite a ministerial statement saying "much of this capacity will be devoted to the Olympics in 2012". Nor does it include the £4.4bn budgets of the security and intelligence services.
It also doesn't take into account the opportunity cost of having the majority of the UK police force working on the Games instead of fighting crime elsewhere. On peak days 12,000 police officers will be policing the Games.
In addition Sky's total misses out the £6.5bn spent on transport upgrades which have been brought forward due to the Olympic Games and could have been cancelled as part of the Conservative government's spending cuts if it wasn't for the Olympics.
If we had counted these figures, the Olympic spend would have totalled well over £24 billion, more than double the current Olympic budget and ten times the original calculation.
The figures also don't take into account the cost of actually staging the Games. This is paid for by the London Organising Commitee (Locog), a private company which raises revenues primarily through sponsorship, merchandising and ticket sales. Locog's budget for the Games is £1949 million.
Sky's olympic team have counted as many extra olympic spends as possible across public bodies but there could be even more spending that has not been accounted for.
Following previous Olympic Games, nobody has ever been able to accurately predict the final cost and it won't be until 2013 when we can predict whether any increased tourism, economic benefits and the returns from the tenancy or sale of the Olympic venues and Olympic village will be a worthwhile investment.
Labels: Current Affairs
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