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Olympics 2012 chiefs willing to spend money like water, say MPs
Officials on the London Olympics project allowed the cost of the 2012 aquatics centre to quadruple because of "risible" finance controls and a willingness to "spend money like water", a report by a committee of MPs says today.
The Zaha Hadid-designed aquatic centre was originally budgeted at £75m when it was commissioned in 2004, but the Olympic Delivery Authority revealed earlier this month that the final bill will be £242m, with a further £61m spent on a land bridge that forms part of the roof of the building, billed as the most "iconic" of the 2012 venues.
The huge overspend has prompted the ODA to raid its infrastructure budget to fill the hole left in its venues budget.
The report by the culture, media and sport select committee criticises the overspend as the most stark example of the failure to control costs.
"[The aquatic centre] appears to be over-designed and an expensive way of providing the facilities for water sports needed during and after the games," it states. "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."
Committee member Paul Farrelly, a Labour MP, called on the National Audit Office to examine how the overspend came about and suggested those responsible should lose their jobs. "If I were in business and a project had overrun by so much I would have investigative accountants crawling all over the project to find out why, and heads would roll," he said.
The report is the second critical judgment generated by MPs in a fortnight, coming after the public accounts committee found that the government ignored "foreseeable" costs in compiling the original games bid budget of £4bn. The budget has more than doubled to £9.3bn.
While the select committee congratulated the ODA and the London organising committee on the progress they have made on construction and securing commercial partners, it was highly critical of the financial position, and said that the spiralling cost of the 2012 games had damaged public confidence in the project.
"The radical revision of cost estimates has been damaging to confidence in the management of the overall programme [and] has exposed the government and games organisers to the charge that the initial bid was kept artificially low to win public support," they state.
According to the committee's calculations, £3.7bn of the budget, more than 30%, is made up of contingency, and the MPs say that it would be a significant failure if the games ran over budget: "The mark of success in financial management of the games will be to have kept expenditure to a level comfortably below the £9.325bn ceiling."
The committee also had concerns about the government's failure to publish a detailed plan for the games legacy, which was a key plank of London's bid.
The committee chairman, John Whittingdale, said: "We are disappointed that little progress has been made in setting out a clear strategy for delivering a permanent increase in sporting participation, despite this being a key feature of the bid."
The ODA chairman, John Armitt, said: "We believe we have a realistic budget and contingency and there is a rigorous focus on managing costs within this. We are letting contracts, such as the aquatics centre, in line with the revised budget announced last March."
The shadow Olympics minister, Hugh Robertson, said: "The conclusion that money has been spent like water on an over-elaborate aquatic centre does nothing to restore confidence in the financial management of London 2012."
Officials on the London Olympics project allowed the cost of the 2012 aquatics centre to quadruple because of "risible" finance controls and a willingness to "spend money like water", a report by a committee of MPs says today.
The Zaha Hadid-designed aquatic centre was originally budgeted at £75m when it was commissioned in 2004, but the Olympic Delivery Authority revealed earlier this month that the final bill will be £242m, with a further £61m spent on a land bridge that forms part of the roof of the building, billed as the most "iconic" of the 2012 venues.
The huge overspend has prompted the ODA to raid its infrastructure budget to fill the hole left in its venues budget.
The report by the culture, media and sport select committee criticises the overspend as the most stark example of the failure to control costs.
"[The aquatic centre] appears to be over-designed and an expensive way of providing the facilities for water sports needed during and after the games," it states. "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."
Committee member Paul Farrelly, a Labour MP, called on the National Audit Office to examine how the overspend came about and suggested those responsible should lose their jobs. "If I were in business and a project had overrun by so much I would have investigative accountants crawling all over the project to find out why, and heads would roll," he said.
The report is the second critical judgment generated by MPs in a fortnight, coming after the public accounts committee found that the government ignored "foreseeable" costs in compiling the original games bid budget of £4bn. The budget has more than doubled to £9.3bn.
While the select committee congratulated the ODA and the London organising committee on the progress they have made on construction and securing commercial partners, it was highly critical of the financial position, and said that the spiralling cost of the 2012 games had damaged public confidence in the project.
"The radical revision of cost estimates has been damaging to confidence in the management of the overall programme [and] has exposed the government and games organisers to the charge that the initial bid was kept artificially low to win public support," they state.
According to the committee's calculations, £3.7bn of the budget, more than 30%, is made up of contingency, and the MPs say that it would be a significant failure if the games ran over budget: "The mark of success in financial management of the games will be to have kept expenditure to a level comfortably below the £9.325bn ceiling."
The committee also had concerns about the government's failure to publish a detailed plan for the games legacy, which was a key plank of London's bid.
The committee chairman, John Whittingdale, said: "We are disappointed that little progress has been made in setting out a clear strategy for delivering a permanent increase in sporting participation, despite this being a key feature of the bid."
The ODA chairman, John Armitt, said: "We believe we have a realistic budget and contingency and there is a rigorous focus on managing costs within this. We are letting contracts, such as the aquatics centre, in line with the revised budget announced last March."
The shadow Olympics minister, Hugh Robertson, said: "The conclusion that money has been spent like water on an over-elaborate aquatic centre does nothing to restore confidence in the financial management of London 2012."
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