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Olympic Delivery Authority

Volume 471: debated on Monday 28 January 2008

2. What her latest estimate is of the budget required for the Olympic Delivery Authority to hold the 2012 Olympic Games in London. (182015)

On 10 December 2007, I announced public funding for the Olympic Delivery Authority of £6.09 billion plus a contingency of just over £2 billion against the known programme-wide risks and risks outside the ODA’s control. That amounts to a total public funding commitment of just under £8.1 billion to build the venues and infrastructure needed for the games. Recent scrutiny of the programme and the budget shows that the ODA remains on budget and on-track to deliver in line with my announcement of last March.

While I share the Minister’s enthusiasm for the Olympics, does she share my belief that the finances need to be utterly transparent? Last November, the permanent secretary in her Department said that most, if not all, of the contingency fund would have to be spent because of the complex and high-risk nature of the project. In the circumstances, would it not be helpful to set out how she envisages that the contingency fund will have to be spent and to publish a revised budget?

There is no need to publish a revised budget. The point that the permanent secretary made to the Select Committee on Public Accounts was accurate—at this stage in the development of a highly risky construction project, the only safe assumption is that the contingency will be fully used. However, the further assessment of the budget for the ODA has shown that there is an 80 per cent. probability that the Olympic park will be developed for less than £8.1 billion, a figure that includes the contingency. The finances are under control and transparent, and I have made clear commitments to ensure that the House is updated on the budget at six-monthly intervals.

In Athens, rising security costs were the key reason why the budget overran so disastrously. Given that myriad organisations are involved—the Army, the police, the security services and the private sector—and that there will always be a temptation for the police to put a number of desirable items in their budget through on the Olympic balance sheet, what precise control mechanism are the Government putting in place to ensure that that does not happen here?

The hon. Gentleman asks an important question and we are determined that the Olympic security budget will pay for costs that are directly incurred by the Olympics rather than other matters. He knows that there are three responsible elements: the organising committee for the games, the Olympic Delivery Authority and the Home Office, which takes the lead. He also knows that the governance arrangements for security to ensure the effectiveness of the plan and proper cost control are in place. We expect the Olympic security plan to be completed and published in the next few months. However, it must be subject to continual review and updating between now and 2012.