Austin Mitchell MP responds to government admission that £2.7bn Olympic contingency fund was likely to be spent
The government’s spending watchdog accused the construction industry yesterday of having the ODA “by the short Olympic rings”.
The comment, from Austin Mitchell MP, came in response to a government admission that the entire £2.7bn Olympic contingency fund would probably be spent.
Yesterday’s admission from DCMS permanent secretary Jonathan Stephens means the final bill for the games is likely to be at least £9.4bn, more than double the original budget.
It puts paid to government and ODA assertions the construction budget had not risen in real terms since 2004.
Speaking about the contingency fund at a hearing of the public accounts committee Stephens said: “The only safe assumption is to expect all of it to be spent. Obviously we are all working to ensure that less is spent but on a project of this size we might expect risks will materialise, and as they do contingency will be transferred to the ODA.
“We are trying to advance the timetable to deal with cost pressures but it is realistic to expect a significant amount , if not all, of the contingency to be spent.”
The committee launched a stinging attack on Stephens and ODA chief executive David Higgins for their management of the costs and failure to set a realistic budget in 2004.
Labour MP Don Touhig called it “the most catastrophic piece of financial mismanagement in the history of the world.”
An increase in management costs from £16m to £570m since the original bid and a reduction in budgeted private sector contributions from £738m to £165m drew particular criticism.