Home Business NewsOlympics London 2012 Olympics might overshoot £9.3bn budget, warns watchdog

London 2012 Olympics might overshoot £9.3bn budget, warns watchdog

by LLB Editor
9th Mar 12 12:12 pm

The London 2012 Organising Committee (LOCOG) has come under fire for drastically underestimating the number of security guards needed at the Olympic venues, pushing up the cost of the Games by £2bn.

A report by the parliament’s spending watchdog, the Public Accounts Committee (PAC), has found that LOCOG increased its demand for the number of security guards from 10,000 to 23,7000.

An initial deal with the security company G4S, worth £86m, to provide 10,000 security deals was struck in December 2010. But after another round of meetings held to discuss security at the Olympic venues, LOCOG rewrote the contract. The new contract is now worth £284m and will provide 23,700 security guards.

Margaret Hodge, chair of the Public Accounts Committee, said: “We are particularly concerned about the significant increases in the security bill. LOCOG now needs more than twice the number of security guards it originally estimated and the costs have roughly doubled.

“It is staggering that the original estimates were so wrong. LOCOG has had to renegotiate its contract with G4S for venue security from a weak negotiating position and there is a big question mark over whether it secured a good deal for the taxpayer.”

The public accounts committee estimates the cost of the Olympics will hit £11bn, yet the Department for Culture, Media and Sport (DCMS) has rejected this figure.

A DCMS spokesman said: “With 140 days to go until the Olympic Games, we are on time and under budget, with over £500m worth of uncommitted contingency remaining.

“As we told the PAC in December we do not recognise the figure of £11bn. We have always been transparent about what is included in the £9.3bn.

“The cost of purchasing the Olympic Park land will ultimately come back to the public purse through the resale of the land after the Games and was therefore not included.

“Funding for the legacy programmes that the PAC refer to comes from existing business-as-usual budgets and we have been clear about this. These are for projects designed to capitalise on hosting London 2012 but are not an additional Olympic cost.”

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