London 2012 is set to come in almost £400 million ($639 million/€492 million) under budget according to figures revealed in the Government’s final quarterly economic report on the Games that was published Tuesday, Oct. 23.
With the Olympics and Paralympics now over, the Government has forecast the entire cost of the Games will be £8.921 billion ($14.26 billion/€10.96 billion), meaning a saving of £377 million ($603 million/€463 million) on the £9.298 billion ($14.87 billion/€11.43 billion) budget that was set out at the beginning of the project after London won the 2012 bid.
There is an additional £73 million ($117 million/€90 million) available to the Olympic Delivery Authority (ODA) to cover assessed risks associated with its post-Games work, principally the Village retrofit.
The Government holds a further £30 million ($48 million/€37 million) of uncommitted contingency set against London 2012’s post-Games risks.
In total, this leaves £480 million ($767 million/€590 million) of uncommitted contingency remaining, with the savings of £377 million ($603 million/€463 million) marking a conservative estimate.
All the savings will go back to the Treasury.
“London 2012 was a tremendous success and it is a significant achievement to deliver this large and complex program on time and under budget,” Minister for Sport Hugh Robertson said. “The work of the construction and delivery teams, from the ODA and London 2012, has set a very high standard and I have no doubt that London 2012 has set a new benchmark for the management of Olympic and Paralympic Games in future.”
In addition, £103 million ($165 million/€127 million) of contingency is being held to cover the remaining risks in the program, such as the retrofit of the Olympic Village for legacy use and the closing out around 2,000 ODA and London 2012 contracts.
Savings made by the ODA on its program have now reached £1.032 billion ($1.65 billion/€1.27 billion).
“We are pleased to report even more savings made through careful stewardship of public money,” ODA chief executive Dennis Hone said. “We are now entering the final phase of the ODA’s work, transforming the Olympic Village into thousands of new homes and building a community that will become established, grow and mature in the decades ahead – a London 2012 legacy for generations to come.”
The forecast final costs of the Policing and Venue Security programs have reduced by £20 million ($32 million/€25 million) and £39 million ($62 million/€48 million) respectively due to the return of unspent contingency and other savings.
The Venue Security reduction does not assume any savings resulting from the enforcement of London 2012’s contract with G4S, which failed to deliver the number of security personnel promised for the Games.
The ODA is now transforming the apartments in the Olympic Village into thousands of new homes, removing partitions and fitting kitchens.
It is also converting the Chobham Academy and Polyclinic/Health Centre into their post-Games configurations.
In addition the ODA is concluding its commercial contracts relating to the Games and returning temporary Games-time venues to their previous use and owners.
Contact the writer of this story at tom.degun@insidethegames.biz. Inside the Games is a blog of the London Organizing Committee for the recent London Olympics and Paralympics. This article is reprinted here with permission of the publishers.