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Risk Management

Volume 463: debated on Monday 23 July 2007

20. If she will make a statement on the progress of the monitoring and risk management arrangements for the 2012 Olympics. (151114)

The Olympics is a risky project, by definition. It is the biggest public sector construction project in Europe and must be completed by the fixed deadline—on Friday, it will be five years to go until the opening ceremony—so risk management is a key part of the arrangements for delivering the 2012 games at every level of its operation. In developing the approaches to risk management, we have built on best practice from previous games—what to do and what not to do—and have looked at best practice in relation to other large projects. Staff are being recruited, particularly from terminal 5, to the delivery authority, the organising committee and the delivery partner.

I welcome the Minister to her new role. The lack of strong progress monitoring and risk management arrangements identified in the Public Accounts Committee report presents a real risk to good causes which have already been hurt by the diversion of £1.7 billion worth of funding, a figure confirmed by the Public Accounts Committee and the National Audit Office. Can the Minister confirm that any future slippage will be funded from the contingency fund and not by further raids on Olympic legacy projects, such as participation in sports or the arts?

I, too, welcome the hon. Gentleman to his new responsibilities, and suggest that before he makes claims about the National Audit Office report, he reads the report carefully. There is a clear recognition by the NAO report published at the end of last week of the scale of risk involved in the project. That is a statement of fact. Building a project of such a size to a fixed deadline is, by definition, risky. That is why we have put in place the means by which that risk is mitigated. The scale and effectiveness of risk management is one of the many reasons why the president of the International Olympic Committee recently said that we were further ahead in our planning than any other city has ever been.

To paraphrase earlier remarks, there has never been a better time to be a sports lover in this country, thanks in no small part to the exemplary work of my right hon. Friend. As we strain our ears towards the sound of the starting pistol in 2012, we must look at infrastructure. Does my right hon. Friend agree that, as is the case with any major construction project, the level of risk will reduce as the development of the Olympic park progresses? Will she give an update on progress on the Olympic venues?

Yes, I am delighted to do that for my hon. Friend. Progress has been made on approving the design of the aquatic centre, and companies have been shortlisted to build it. Last week, we announced the design team, which will be led by Hopkins Architects, to build the velopark, which Chris Hoy, one of our gold medallists, has said he expects to be the finest velopark in the world. Planning for the Olympic stadium has moved to the next stage, and the Olympic Delivery Authority has signed a memorandum of understanding with Sir Robert McAlpine Ltd for the development of the stadium. As everyone knows, McAlpine was responsible for, among other great projects, the magnificent new stadium at Arsenal.

I welcome the Minister to her role back at the Dispatch Box, and I also welcome the news about McAlpine. However, is there not a risk management issue? As one newspaper has put it:

“Britain is facing a huge skills shortage that could undermine the success of the Olympics.”

We know that we need thousands more electricians, plumbers, bricklayers and many others. What progress is being made to implement the necessary training to ensure that we have sufficient people with the relevant skills, so that we are not later held to ransom by unscrupulous contractors?

The right hon. Gentleman has identified an important point. One aspect of the legacy that we intend for the Olympic games, quite apart from the success in building the games on budget and to time, is to change that part of London, which is characterised by local people as having very low levels of skill and therefore high levels of unemployment. Local people will have skills as a result of the job opportunities created by the Olympics. A large number of initiatives are already under way, led by the Mayor and the Learning and Skills Council, in order to develop the skilled work force that the Olympics will require in every single respect, with a particular emphasis on increasing the skills of people through, for instance, the pre-volunteer programme. That will enable us to achieve two things: first, we will achieve a higher level of skill in east London; secondly, we will ensure that the skill match between people’s skills when they look for work and the skills needed by the Olympics means that the Olympic park is constructed to budget and to time.

The London-Tilbury-Southend line franchise of c2c terminates or is renewable before the Olympics. Will the Minister tell us what she intends to do to ensure that that line receives the appropriate investment to make it welcoming and to maximise mobility in and around the Olympics? What will happen?

I am happy to examine the extent to which that line will serve the Olympic park. The Olympic park and the area around Stratford will benefit from an unprecedented level of investment in new transport infrastructure, with 10 new rail services and other public transport links, including, of course, the channel tunnel rail link, which will be an important part of the infrastructure. Much of that major investment is specifically because of the Olympic games, and I will write to my hon. Friend about the point that he has raised.