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Olympic Games 2012: Finance

Volume 487: debated on Tuesday 3 February 2009

To ask the Minister for the Olympics what assessment she has made of the likely effects of recent sterling exchange rates on budgetary provision for the London 2012 Olympics. (250905)

The Government’s assessment is that current sterling exchange rates will not have significant effects on budgetary provision for the 2012 Olympics. The Olympic Delivery Authority (ODA) receives its revenues, and makes its payments, in sterling. It is the responsibility of the ODA tier one contractors to manage exchange risks as defined by their contractual arrangements with the ODA. The ODA is reviewing the current exchange rate fluctuations with its Delivery Partner and the tier one contractors to assess the level of impact on future procurement. To date, no call has been made on the contingency in relation to exchange rate fluctuations. The contingency (within the £9.325 billion funding package) does, however, include provision for identified risks with the potential to impact on projects across the ODA programme such as exchange rate fluctuations.

The London Organising Committee of the Olympic Games and Paralympic Games (LOCOG) is due some revenues in both US dollars and euros. As a result, LOCOG has taken steps to effectively minimise exposure to exchange rate shifts and it is expected that recent movements in both currencies against sterling will have no significant impact on LOCOG’s revenues. As the majority of LOCOG’s costs are sterling-based, it is expected that recent movements in both currencies against sterling will have no significant impact on LOCOG’s costs.