Press release

The London 2012 Olympic and Paralympic Games remain on time and within budget

Additional investment in ceremonies; changes in security costs as a result of detailed planning

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Figures from the Government’s November 2011 Olympic Quarterly Economic Report show that the overall funding package for the Games remains at £9.298 billion with more than £500 million of unallocated contingency available. With the successful delivery of the Olympic Park on time and within budget, the Government has been able to invest more in promoting Britain and generating economic growth off the back of the Games.
The anticipated final cost of the Olympic Delivery Authority’s (ODA) construction, infrastructure and transport programme is £6.856 billion. This is a decrease of £394 million since July - including £333 million that the ODA has returned to DCMS for transformation work to be carried out by the Olympic Park Legacy Company (OPLC). On a like for like basis with previous reports which included funding for transformation work, the anticipated final cost stands at £7.189 billion - a reduction of £61 million.

The ODA has achieved £42 million of new savings in the quarter July to September, taking the total achieved since the November 2007 baseline to more than £910 million. Construction of the venues and infrastructure for the Games is 92 per cent complete, with the majority of venues on the Olympic Park now complete. Contracts for the sale of the Olympic Village and adjacent development plots to the Delancey and Qatari Diar joint venture have been exchanged, generating £557 million for the ODA.

Separate to the ODA programme, the following forecast future cost pressures were identified:

  • £271 million for venue security to deliver a safe and secure Games including the recruitment and training of 23,700 venue security personnel for more than 100 competition and non-competition venues across the UK;
  • £41 million (including £7 million held in contingency) to the London Organising Committee (LOCOG) to deliver Olympic and Paralympic ceremonies that will showcase the best of the UK;
  • £2.8 million for Games-time command, coordination and communication testing; and
  • £25 million for domestic and international campaigns to maximise the economic benefits of the Games, including tourism.

Minister for Sport and the Olympics Hugh Robertson said:

The Olympic programme remains on time and within budget. Consistent careful management of the finances has enabled us to fund additional costs such as venue security from within the public sector funding package as well as to invest in projects that will help drive economic growth from the Games.

This has been a big year for the programme with the construction project reaching its peak and the staging of the Games coming to the fore. As we get ready to enter the Olympic year and the pressure mounts, I am confident that we remain on track to deliver a memorable Games that will enthral the nation and the world.

As was always planned, the Government and LOCOG have now undertaken detailed analysis of the numbers of security staff required to protect the more than 100 Olympic venues. As a result, to ensure a safe and secure Games, they have revised the numbers of trained staff required.  We are therefore investing additional funds in providing nearly 24,000 venue security personnel plus specialist security equipment. 

London’s opening and closing ceremonies are a once-in-a-generation opportunity to showcase the very best of our country to four billion people around the world and have a potential advertising value of £2-5 billion. To get the ceremonies absolutely right, and boost the Games business and tourism legacy, we are putting additional investment into our ceremonies.

Dennis Hone, chief executive of the Olympic Delivery Authority, said:

We’re in the home straight, with the finish line in sight - and still going flat-out to keep down the bill for building the Games. We can now report that more than £900 million has been saved and our anticipated final cost cut again. But there is still work to do, with smaller venues to be completed and the Olympic Village set to be finished around the end of the year. So we are anything but complacent and totally committed to securing value for money for the public from this huge project.

The remaining balance of contingency within the public sector funding package now stands at £354 million with an additional £174 million available to the ODA in programme contingency. In total, this leaves more than £500 million of uncommitted contingency available.

The change to the ODA anticipated final cost is due to a number of factors, including:

  • a reduction of £126 million (to £174 million) in the level of assessed programme contingency required to meet remaining risks;
  • an increase of £18 million for landscaping the Park to improve crowd flow and access during the Games;
  • a potential saving of £8 million due to the reduction of cost pressures on the International Broadcast Centre and the Main Press Centre for providing cooling systems to serve the building during the Games; and
  • an increase of £37 million in programme delivery anticipating the full future extent of enhanced payments to the delivery partner, CLM, due to their success in meeting the construction milestones.

Notes to Editors

  1. A copy of the report.
  2. This report covers the period 1 July 2011 to 30 September 2011.
  3. Contracts for the sale of the Olympic Village to Delancey and Qatari Diar Joint Venture were exchanged on 9 August 2011. The total agreement will deliver £557.5 million of fixed income. The net benefit to the ODA was £14 million better than the overall position estimated in the June 2011 AFC. However, this benefit is split across a number of project budgets, and other forecast movements in the quarter, relating to the costs to complete the Village works post games, have offset some of the savings. In addition, there are further potential benefits not reflected in the AFC as a result of the sale, such overage that could be earned in future years.
  4. The Government previously announced its domestic and international tourism campaigns in September. Further information can be found on the DCMS website: 
    * press release 101/11- 7 September 2011 * press release 083/11 - 21 September 2011  * press release 080/11 - 12 September 2011
  5. The increase in security guard numbers is not in response to any specific security threat. The Government carried out a full review of security arrangements in late 2010 and remains confident that the core safety and security programme can be delivered within the £475 million announced in the Spending Review settlement in December 2010. Delivery of venue security is the responsibility of LOCOG and the Government working closely with the police and security agencies. As venue security plans have developed so has the requirement for security personnel at Games time to support them. Further funding is being made available to LOCOG to support it in delivering its responsibilities for securing Olympic and Paralympic venues and will fund the recruitment and training of 23,700 venue security personnel and search and screening equipment for more than 100 competition and non-competition venues across the United Kingdom. The core security operation will be performed by G4S private security guards, with additional support from the military and LOCOG volunteers. All roles will be performed by people who are appropriately trained and qualified.
    6. This report anticipates the full future extent of enhanced payments to the delivery partner, CLM. Where previous increases have brought the anticipated final cost into line with the programme at that time, this quarter’s change looks to the end of the programme and the likely whole extent of payments due. Potential costs previously held in programme contingency have therefore now been included in forecast programme delivery costs.
  6. The public sector funding package for the Games announced in March 2007 was £9.325 billion. On 24 May 2010, the Government announced that it would be reduced by £27m to £9.298bn.

Press Enquiries: 020 7211 2210
Out of hours telephone pager no: 07699 751153
Public Enquiries: 020 7211 6000

Updates to this page

Published 5 December 2011