The BBC reports that a very critical report by a group of MPs on the progress of the London 2012 Summer Olympic Games will be released Wednesday.
The report raises questions about Olympic costs and who is going to pay for any financial overrun, and the BBC reports that it understands the initial draft of the report was even more hard hitting.
The MPs have three areas of great concern – rising costs, the Games’ legacy, and the effect on grass-roots sport of diverting national lottery funds to the Olympics.
There are concerns about why costs have gone up by 40 per cent in the 18 months since London won the bid, and with the Games still more than five years away the MPs will ask how much further costs will rise.
As for the legacy the London 2012 Games would leave, when the bid was approved last year London bid leader Lord Coe said the Games would leave a sporting legacy like no other Olympics before, but MPs have looked at past Games and found no Olympics has created a permanent legacy, reports the BBC.
Other concerns include the fact that to fund the Games money is being taken from the lottery, which means funds would be diverted from grass-roots sport.
The BBC reports that Lord Coe told BBC Radio Five Live, “the decision on who should pay any cost overrun is a discussion for Government, not for the organizing committee. We know exactly what our budget is. It is two billion pounds and we raise all our money from the private sector and that is the cost of staging the Games”.
The report also focuses on who pays for the Games and for now it’s mainly the lottery and the London council taxpayer, according to the BBC.
According to the Guardian the committee will urge the Treasury to be more willing to pay the extra costs and not insist that all the extra funding has to be found from the national lottery. The newspaper says the report will also say that the Treasury’s proposed 60 per cent contingency fund is excessive. There is already a project contingency provision for each venue of 23 per cent and such a large fund could be seen as a green light for building companies to overcharge as the construction deadline nears.
The committee is also arguing that the Olympics Development Authority (ODA) should not have to pay VAT, since the parallel body paid no VAT for the Athens Olympics or for the Manchester Commonwealth Games. It will say the ODA should be seen to have the legal attributes of a local authority, and so not liable to VAT under EU rules.
Meanwhile Lord Coe said Tuesday “massive progress” has been made in the ensuring 18 months although the British government had yet to settle on a figure for the total cost of staging the Games and regenerating the run-down area of east London where they would be held. He told BBC radio Five Live, “we have a master plan in place, we have site design, we have venue design. This coming year we will have contracts let on all the five main stadiums, construction will start next year, we have a transport plan, we are today launching our sustainability plan – massive progress has been made”.
