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A Flame To Burn Us All

Minister for the Olympics and London Tessa Jowell claimed on Monday [10th December 2007] that the 2012 Games have "high levels of public support".

Well, she would say that, wouldn't she?

In truth, reaction to the Government's announcement it was presenting the nation with accurate costings for the 2012 London Olympics was, to say the least, mixed.

The awkward truth is that no one believes the figures will remain unaltered for the next four-and-a-half years. When the amendments do come, they will be upwards only.

When the London bid to host the 2012 Olympics was submitted in 2005, the calculations were based on 2004 costs. That is not a misprint. No account of inflation or other contingencies, such as burgeoning security expenses, was included in the original budget.

In July 2005, the total funding requirement was set at £2.375billion. By March of this year, the figure had risen to £9.3billion - the same one, remarkably, as presented on Monday.

Costs were always going to rise. The 2004 calculations were only for venues, while the latest figures include expenses associated with developing the main Olympic park.

Nevertheless, the actual venue costs will not be known for some time, possibly not until late next year.

Yet politicians and others supporting the London bid did not reveal the full extent of the true Olympic costs because they knew it would cause a public outcry.

Yet these same people are asking the public to believe them now. Detailed analysis, they pleaded, could be completed only once London had won the bid, as though this feeble excuse makes excluding inflation, VAT and other contingency costs acceptable. It doesn't. If you or I bought a piece of land on which we intended building a home in a few years, when it came to calculating building costs would we stick with current construction rates? Or would we rather factor in inflation to take account of rising prices likely to be incurred before we built?

It is, to coin a phrase, a no-brainer.

Moreover, the good political folk who absorbed the wonderful sunshine in Sydney and Athens during those Olympics, who enjoyed the taxpayer-funded R &R, the free lunches and glittering parties while on fact-finding tours, had also promised that £750million would be raised from the private sector to pay for London's jolly.

This, at least, made some sense as such funding would not have the effect of diverting money away from amateur sport in every other part of Britain to pay for London's games. It would represent a fresh injection of new capital, just about enough to build the main stadium and an aquatics centre.

However, it now transpires that businesses are understandably wary of handing over large amounts of money to the politicos who failed to reveal that Sydney's costs doubled, to £2billion, between making its bid and 2000, while those of Athens leapt five-fold to £5billion, mainly due to security costs.

Accordingly, the much-vaunted plans to raise £750million from the private sector have been shelved.

There wasn't much detail about this in Jowell's press release on Monday because the shortfall will be made up, without any consultation of course, by you and I - the taxpayer.

For the record, at present a total of £6billion is coming directly from the public purse with a further £2.2billion being looted from the Lottery. London's council tax payers are stumping up a further £1.2billion.

Several commentators have already suggested that costs will rise further, to more than £11billion by 2012, but who is ultimately responsible for authorising this soaring, publicly-funded largesse?

The project is incredibly complex, with organising committees, support units, funders' committees and steering groups so prevalent in the public sector. However, while no one is responsible for making sure the games are delivered on time and within budget, at the top of this mazy organisation sit four people who comprise the organising committee.

Lord Sebastian Coe heads up this committee, known as LOCOG, which is the body responsible for staging the games, while the Olympic Delivery Authority, ODA, chaired by John Armitt, is responsible for building the venues and constructing the infrastructure.

Jowell, the Olympics Minister, is the Government minister responsible for keeping track of the huge quantities of public money being hosed into the project and Ken Livingstone, currently London's mayor, sits on LOCOG as a representative of the capital's council tax payers.

This quartet effectively establishes project strategy, but they are all deemed to be first among equals and the buck does not actually stop with any of them.

From: A Flame To Burn Us All, Peter Sharkey, Business of Sport column,
12 December 2007, Press and Journal, Aberdeen.

More at: Press and Journal

See also: John Armitt interview


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