Annual Report on the London 2012 Olympic and Paralympic Games published
The London 2012 Games remain on time and within budget, data published today by the Government and ODA confirms.
The London 2012 Olympic and Paralympic Games remain on time and within budget, data published today by the Government and Olympic Delivery Authority (ODA) confirms.
Figures from the Government’s Annual Report on the London 2012 Olympic and Paralympic Games show that the overall funding package for the Games remains at £9.298bn.
The Anticipated Final Cost (AFC) of the ODA programme is £7.301bn. This includes a like for like increase in the ODA’s spend of £12m, plus additional funding for park operations - which has been included in the AFC for the first time - of £57m, making the overall increase in the quarter £69m.
It was reported in February 2010 that the ODA will take on additional responsibilities for the operation of the Olympic Park and its venues and facilities between 2011 and 2014. As previously reported, the ODA estimated that the total additional cost of Park Operations would be up to £160m depending on the finalisation of scope, delivery approach, procurement and other factors. The ODA’s budget for this additional park operations work has now been finalised at £158m of which LOCOG will receive £67m for work such as venue operations, licensing and testing.
Following the decision around the Spending Review to make financial support available to operational delivery, LOCOG will also receive £36m from the funding package to contribute to the cost of using the Olympic Village and to meet costs arising from changes to venues that generated savings for the ODA. A further £27m is being retained by Government to cover further cost pressures that may arise in staging the Games.
Funding of up to £22.5m has been committed to some host local authorities to ensure the cost of Games-time operations, including additional waste and street cleaning, are not borne solely by local council-tax payers. Provision of up to £90.5m will also be made available to various Olympic organisers for other operational activities to be agreed. Use of this provision will be published in future quarterly economic reports.
Construction of the venues and infrastructure for the Games is 79 per cent complete with key achievements this year including: the completion of the first purpose-built venue, the Lee Valley White Water Centre at Broxbourne and the official turning on of the Stadium lights by the Prime Minister. The Velodrome is on course to be the first Olympic Park venue to be completed.
The ODA also announced today that the Multi Storey Car Park for the Main Media Complex is complete. The facility will make it as convenient as possible for media to broadcast the Games to four billion people worldwide.
Minister for Sport and the Olympics, Hugh Robertson said:
“The construction phase is progressing on time and to budget putting the London 2012 programme in the best possible shape. This is the year when tickets will go on sale, test events start, volunteers are recruited, the torch relay route is announced and venues start being prepared for competition. Now is the time for everybody to start planning their Games.”
Olympic Delivery Authority Chief Executive, Dennis Hone, said:
“We remain on schedule and within budget as we push ahead into the final year of construction. The project is now 79 per cent finished to Games-time with the Velodrome set to become the first venue on the Park completed later this month. We continue to bear down on costs where possible with around £780m now saved since the start of the project to keep us within budget. We announced over a year ago the additional costs for Park Operations which have now been absorbed into the latest Anticipated Final Cost (AFC) in line with expectations.
“The ODA is on track to deliver a fantastic stage for the Games and in legacy though we are not complacent - there is still a lot of hard work ahead.”
In total around £780m in savings have been achieved by the ODA since the November 2007 baseline budget was agreed, including £33m in the last quarter. The majority of these savings have been used to control the budget by offsetting cost increases in other areas of the programme and helping to reduce calls on the contingency.
The gross allocation of contingency on the programme at 31 December 2010 was £1.133 bn, leaving £839m of the contingency originally available for the ODA. Contingency funding totalling £304m was released during the last quarter for park operations work, the increase in VAT and anticipated additional costs at the Royal Artillery Barracks and Games time training venues.
From April 2011, overall £0.5bn will be available as contingency for additional cross-programme issues that may arise, including any major changes in security circumstances. This reflects the programme’s changing focus from construction to operational requirements.
In December the ODA announced the shortlist of private-sector organisations who have been invited to tender for the Athletes’ Village. This begins the process that will see the public purse repaid for its investment.
Notes to Editors
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A copy of the Annual Report on the London 2012 Olympic and Paralympic Games 2011 is available on the DCMS website.
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This report covers the period January to December 2010 including the economic update figures from the October 2010 to December 2010 quarter.
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The public sector funding package for the Games announced in March 2007 was £9.325 billion. Of this £6.1 billion was identified as the Olympic Delivery Authority budget, with around £2 billion contingency and £1.2 billion for non-ODA activities such as wider security and support for elite and community sport. On 24 May 2010 the Government announced that the ODA budget would be reduced by £27m in the current financial year taking the public sector funding package to £9.298bn.
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As reported in the February 2010 Annual Report, it was agreed that the ODA would take on additional responsibilities for the operation of the Olympic Park and its venues and facilities between 2011 and the handover to legacy owners by 2014. Last year the ODA estimated that the total additional cost of park operations would be up to £160m depending on the finalisation of scope, delivery approach, procurement and other factors. A business case has now been agreed and the additional budget for this work has been finalised at £158m. LOCOG will be responsible for delivering some of the operational arrangements including venue operations, licensing and testing. Funding for this additional scope of £67m has been transferred directly to them.
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The 2010 Spending Review made provision for all known Olympic programme cost requirements and pressures at the time. As we set out in the November 2010 Quarterly Report, contingency will continue to be strictly controlled and will only be released to meet costs that are essential for the delivery of the Games, where they cannot reasonably be met from existing budgets.
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The Athletes’ Village will deliver the legacy of 2,818 new homes for east London after the Games. 1,379 of the new homes have been purchased by Triathlon Homes to become legacy affordable housing. The ODA owns the remaining 1,439 homes which will become private housing after the Games, together with six future development plots in the Village site with the potential for a further 2,000-2,500 new homes.
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The ODA have invited nine shortlisted private sector organisations or consortia to submit proposals for the purchase and long-term management on the Olympic Village. The ODA is looking to secure best-value together with a long-term commitment from an investor with the experience and expertise needed to realise the full potential of the new homes being built and the future development opportunities across the Village site.
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The Home Office announced in December 2010 the forecast cost of the wider policing and security programme is £475m from a budget of £600m and that the Government is to contribute £282m towards the cost of venue security. This is additional to the £475m anticipated cost for wider policing and security, but within the £9,298m total package.
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