02 May 2008
Doubts over the true scale of the Olympic budget rose this week as a second committee of MPs criticised 'risible' financial controls.
Just one week after the Public Accounts Committee condemned the government for misleading the public with unrealistic budget estimates, the Commons culture, media and sport select committee singled out the four-fold increase in costs for the Aquatics Centre.
The original construction quote for the venue, designed by architect Zaha Hadid, was £73m, but the total budget has since risen to £303m.
'The history of the Aquatics Centre shows a risible approach to cost control and that the Games organisers seem to be willing to spend money like water,' the committee's April 30 report states.
Chair John Whittingdale said there was scepticism over whether such a 'flamboyant and extravagant' facility was necessary. 'When a wow factor comes in at £300m, it's a fairly expensive wow,' he said.
But a DCMS spokesman said the centre would be more than just a swimming pool. 'It will provide two brand new 50 metre pools and a diving pool for elite and community use in a capital without any such facilities at present… This is a state-of-the-art building. It will also be a piece of stunning, iconic design, the centrepiece of the Olympic Park.'
The committee also discovered that for the Olympics as a whole, the true total contingency fund stood at £3.7bn – somewhat larger than the £2.7bn previously announced. This meant the Olympic Delivery Authority had a contingency fund worth 60% of base costs.
The committee said it could unearth no other example of a major project with such a large contingency fund.
'The Olympics minister told us there's an 80% probability the total contingency will not be spent,' Whittingdale told Public Finance. 'Given the size of [the fund] it would be disastrous if it was all spent.'
The DCMS disputed the committee's figures, saying it had miscalculated the size of the contingency fund and had double-counted £500m.
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