Figures from the Government’s May 2011 Quarterly Economic Report show that the overall funding package for the Games remains at £9.298bn.
The Anticipated Final Cost (AFC) of the ODA programme is £7.266bn. This is a decrease of £35m on February’s report, where the AFC stood at £7.301bn.
Funding of up to £12.5m has been made available to the Greater London Authority (GLA) to support its plans for the Games. This funding will be used to provide facilities for the non-accredited media, to improve accessibility on London’s Southbank and to recruit and train 8,000 volunteers to help visitors to the city at Games-time.
Construction of the venues and infrastructure for the Games is 83 per cent complete. The Velodrome and the Olympic Stadium are finished and the ODA also announced today that the handball arena is now complete.
Minister for Sport and the Olympics, Hugh Robertson said:
“The beginning of this year has seen considerable progress on the Olympic Park with two of the centre-piece venues finished and the handball arena now complete. The ODA has continued its focus on costs - driving efficiencies across the programme resulting in a £35m reduction in the anticipated final cost.”
Olympic Delivery Authority Chief Executive, Dennis Hone, said:
“Today we can announce the handball arena as the third venue to be completed on the Olympic Park, with the project now 83 per cent complete in what is the ODA’s final year of construction. We are on track to deliver an excellent platform for the Games, although are not complacent as we push ahead on the final straight.”
In total £830m in savings have been achieved by the ODA since the November 2007 baseline budget was agreed, including £49m in the last quarter.
As of March 2011 the gross allocation of contingency for the ODA programme was £1.069bn. The remaining balance of ODA contingency now stands at £476m. This follows changes to the breakdown of the overall funding package in the 2010 Spending Review in which the funding available exclusively to the ODA was reduced by £684m. Contingency totalling £3m was released to the ODA during the last quarter for transformation works on the Park after the Games and site preparation works for the sponsors’ areas on the Park.
In addition to the remaining ODA contingency, there is £629.5m potentially available as contingency for other cross-programme issues that may arise, including any major changes in security circumstances. This contingency is part of the £9.298bn funding package, and reflects the programme’s changing focus from construction to operational requirements.
The changes in the ODA’s AFC are as a result of a number of changes including:
- a saving of £17m from South Park site preparation;
- forecast savings of £3m on Stratford Regional Station upgrade;
- a forecast saving for logistics and security for park construction of £7m and £3m respectively.
The AFC also includes a contribution of £55m from the ODA to operational costs incurred by LOCOG as a consequence of the reorganisation of temporary venues in 2007. The reduction in the number of temporary venues created savings of more than £200m for the public sector funding package but resulted in additional costs for LOCOG such as venue rental, additional security, overlay and transport costs that they had not budgeted for.
Notes to Editors
This report covers the period January 1 2011 to 31 March 2011.
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.
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.
As was announced in the 2010/11 Annual Report in February 2011, following the finalisation of additional park operations responsibilities LOCOG will receive £67m from the PSFP for work such as venue operations, licensing and testing. They 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.
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