London Games come in well under budget, says NAO
By Richard Johnstone | 5 December 2012
The cost of hosting the Olympic and Paralympic Games in London this summer is likely to be below the £9.3bn budgeted for the events, the National Audit Office said today.
In its Post-Games review, the watchdog concluded that total spending would be around £377m below the Public Sector Funding Package if the costs of converting the Athletes’ Village into residential homes remained on track. This will not be known until 2014.
Praising the success of the event, the NAO said the London Organising Committee of the Olympic and Paralympic Games had met the ‘huge logistical challenge’.
Its report to Parliament called for project management skills built up by officials who had worked on the events to be used on other public sector schemes.
Auditors found that the project managed to absorb unforeseen increases in operational costs and still remain under-budget. Notably, it was able to cover £500m in additional costs for venue security, for which there was originally no provision.
Total spending by the Olympic Delivery Authority on constructing venues and associated infrastructure is also expected to come in under budget. It will likely be around £6.7bn, well under the £8.1bn originally available to it.
Contracting and risk management techniques used by the ODA should now be applied across the public sector, the report added.
Auditor general Amyas Morse said: ‘Few could have envisaged how successful the London 2012 Games would turn out to be.'
He added: ‘The construction programme was completed on time and within budget, 11 million tickets were sold and our athletes excelled. Crucially, the Games passed off without major transport disruption or security incident.
‘The operational costs within the 2007 Public Sector Funding Package increased markedly, including an extra £500m needed for venue security.
'Nevertheless, taken as a whole, the Games were a success by any reasonable measure and it looks as if not all of the Funding Package will be used.’
Responding to the report, sport minister Hugh Robertson said: 'We can look back with pride on an outstanding Olympics and a ground-breaking Paralympics, which showed Britain at its best - the excellent venues on the Olympic Park delivered on time and under budget, the efficiency of the transport system, brilliant management of the event, the warmth and efficiency of our volunteers, armed forces and police, the inspirational success of our athletes and the incredible Opening and Closing Ceremonies.
'The National Audit Office report quite rightly highlights the successes of London 2012 and we are now focused on delivering a genuine and lasting legacy.'