Games on, but can the Government deliver?
Fresh reports of a mounting bill for staging the 2012 Olympics have renewed criticism that the Games could cost the taxpayer too much. In an exclusive article for the Kent Messenger Group, the shadow Conservative sports minister and Faversham MP Hugh Robertson
outlines his own concerns and calls on the Government to be more transparent about what is happening
When The Kent Messenger Group asked me to write an article about the London 2012 Olympic Games, they wanted me to answer two questions. First, what is happening over the Olympic budget and, second, what does hosting the Olympic Games mean for Kent? The first thing to understand about the Olympic budget is it is not one budget but three.
The first of these budgets is a regeneration budget. Originally set at just over £1billion and funded by the Exchequer from general taxation, it is largely composed of money set aside for the regeneration of the Lower Lea Valley. The second budget is for construction. It was originally set at £2.4bn, and to be funded by the National Lottery, London council taxpayers and the London Development Agency (LDA). This money will be used to build the Olympic Park. The third budget is the operating budget, or the money needed to stage the Games, which is set at £2bn. This will be raised from the private sector, the International Olympic Committee (from its share of broadcasting revenue and sponsorship), and from ticketing and merchandising. This is money raised from the private sector and not a budget that is causing any concern. The current controversy, therefore, centres on the first and second budgets. Tessa Jowell, Secretary of State for Culture, Media and Sport, revealed in November the construction budget had risen to £3.3bn, largely due to the decision to appoint a delivery partner, costing £400m. Given the Government must have considered at an early stage whether this function was best carried out by the private sector, or the Olympic Delivery Authority, it was incompetent not to have allowed for it at the time of the bid. However, bigger problems remain unresolved for which the Government is entirely to blame. There is controversy over whether the regeneration and construction budgets will be subject to VAT, as well as what level of project contingency will be applied. London Mayor Ken Livingstone suggested the Chancellor is holding out for 60 per cent. Again, both of these issues were entirely predictable at the time of the bid and should have been added to the original budget. When you add in the likely costs of security – budgeted at £190m but likely to cost £1bn – it is clear there is now a substantial extra bill. The sad thing about this whole chapter is that there are many people, myself included, who supported the bid to stage the 2012 Olympics and wish to continue to support the Games. However, it is vital the Government produces an open, honest and transparent budget, as a matter of urgency. This will help to restore confidence in the Games – not least so the private sector will come forward with the considerable amounts of private sponsorship necessary for a successful Olympics. Kent has the potential to benefit enormously from the county’s proximity to the Games, although we are handicapped by the requirement to operate within the straitjacket of a ridiculous regional structure.
I hope Kent will become a destination of choice for training camps and for post-competition leave. Given our closeness to the Stratford site, I expect a significant number of Kent businesses to win contracts to service the Games and hope Kent people, both young and old, will take the opportunity to act as Olympic volunteers. The Games needs 70,000 volunteers, many of which should come from Kent. Finally, and most importantly, it is vital that we honour the key commitment we made to the international community when we won the right to host the Games – namely to enable young people through sport – something that will benefit everyone living in Kent. If hosting the Olympics leads to a regeneration of sport in this country and makes people happier, healthier and better integrated, then we will be able to look back on this project with pride. If it simply leads to six weeks of world-class sport with no regeneration outside London’s East End, we’ll have missed a once-in-a-lifetime opportunity.
Hugh Robertson MP