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Olympic Games 2012: Finance

Volume 488: debated on Tuesday 24 February 2009

To ask the Minister for the Olympics what the reasons are for the potential increase in (a) taxation and interest and (b) programme delivery costs referred to in Table 2 in the London 2012 Olympic and Paralympic games annual report, January 2009. (256369)

The potential increase in taxation, as reported in Table 2 of the London 2012 Olympic and Paralympic games annual report published January 2009, was the amount of corporation tax estimated to be payable on an anticipated receipt for the sale of the assets post-games. As a consequence of the decision, announced on 6 February 2009, to establish a dedicated 2012 Olympic Park Legacy Company, it is now more likely that the Company will benefit from that anticipated receipt and the corporation tax is now unlikely to be payable by the Olympic Delivery Authority (ODA).

The increase in programme delivery costs is a result of CLM (ODA's Delivery Partner—and incentivised to deliver to programme and against cost targets) achieving a higher level of key performance indicators than anticipated in the original budget leading to a consequential increase in performance related payments. This reflects good progress in respect of the delivery of the project—to time and within budget—and in the achievement of savings which are outlined in the 2009 annual report.

To ask the Minister for the Olympics what costs had been incurred on (a) the 2012 Media Centre and (b) the 2012 Olympic Village as at 1 February 2009; and if she will make a statement. (256370)

Olympic Delivery Authority figures at the end of January 2009 show expenditure of £24.28 million on the International Business Centre/Main Press Centre project and expenditure of £71.6 million on the vertical build of the Olympic Village. Both these figures are in line with expected levels of expenditure.

To ask the Minister for the Olympics for what reason the £326 million recently released from the Olympic contingency fund for the athletes village was drawn from the funders; why the £135 million for the International Broadcast Centre/Main Press Centre was drawn from funders and contingency reserves; and if she will make a statement. (256483)

[holding answer 12 February 2009]: The Funders Group contingency is principally for risks that fall outside of the control of the Olympic Delivery Authority (ODA). The recent allocation of Funders Group contingency was to help fund the Olympic village and the international broadcast centre (IBC)/main press centre (MPC) projects, both of which had been affected by the global economic situation, particularly the downturn in the housing and banking markets. This downturn was outside of the ODA's control and therefore Funders’ Group contingency is the appropriate source of funding.

A proportion of the funding for the IBC/MPC project (£67 million) was funded from programme contingency. This is because, as part of the restructure of the IBC/MPC project, elements of new scope—including to ensure that the buildings left in legacy have the flexibility to be adapted to a wide range of uses to maximise potential future employment opportunities—and additional project contingency were included.