'Ministers underestimated 2012 costs'

Ministers have been accused of seriously underestimating the costs of London staging the 2012 Olympic and Paralympic Games and being overly optimistic about private sector funding.

The Commons Public Accounts Committee (PAC) has warned that as the ultimate funding guarantor, the Government has left itself "financially exposed". The original budget of between £2-3 billion has been revised to £9.3 billion.

The committee has also expressed concerns for preparations going ahead without rigorous arrangements for monitoring progress and managing risks while criticising the lack of plans for ensuring facilities meet users' needs after the Games.

Progress has been made in several areas, including re-routing power lines on the Olympic Park site and the start of procurement activity by the the Olympic Delivery Authority (ODA).

But the PAC has warned: "No one individual has overall responsibility for delivering the Games, however, and the large number of bodies involved presents significant risks, for example to timely decision-taking.

"The Department for Culture, Media and Sport (DCMS) should develop a framework of timely progress and risk reporting, which ultimately feeds through to the Olympic Board and provides early warning of potential difficulties.

It continued: "This framework should be supported by arrangements in each individual organisation, and work to complete these should be a priority."

The PAC's Tory chairman, Edward Leigh, argued: "If the London Olympic and Paralympic Games are to be the great success we all want them to be, then the risks to delivery will have to be managed with an iron hand.

"The DCMS is ultimately responsible for co-ordinating the array of bodies involved. It is worrying, therefore, that strong arrangements for monitoring progress and managing risk are so far not in place."

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