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Cost of 2012 Olympics 'up £900m' Cost of 2012 Olympics 'up £900m'
(about 2 hours later)
The expected cost of the 2012 London Olympic park has risen 40% since the games were won in July 2005, Culture Secretary Tessa Jowell has told MPs.The expected cost of the 2012 London Olympic park has risen 40% since the games were won in July 2005, Culture Secretary Tessa Jowell has told MPs.
The extra £900m cost was likely to be met by London council tax payers and lottery funds, Ms Jowell suggested.The extra £900m cost was likely to be met by London council tax payers and lottery funds, Ms Jowell suggested.
The new £3.3bn estimate, which does not include a revised security bill or regeneration costs, is still far below the £8bn some critics say is likely.The new £3.3bn estimate, which does not include a revised security bill or regeneration costs, is still far below the £8bn some critics say is likely.
The Tories said the budget had gone "disastrously wrong".The Tories said the budget had gone "disastrously wrong".
Ms Jowell told the Commons culture, media and sport committee the rise was partly due to a doubling in the price of steel and also a decision to revise transport costs to take into account inflation in the years to 2012.Ms Jowell told the Commons culture, media and sport committee the rise was partly due to a doubling in the price of steel and also a decision to revise transport costs to take into account inflation in the years to 2012.
London legacyLondon legacy
But it also included an extra £400m to pay "delivery partner" CLM to make sure the games come in on budget and on time.But it also included an extra £400m to pay "delivery partner" CLM to make sure the games come in on budget and on time.
Ms Jowell, who said the games would leave a legacy "for ever" in east London, told MPs an unexpected VAT bill for building costs was unlikely to add to the overall cost to taxpayers of the games.Ms Jowell, who said the games would leave a legacy "for ever" in east London, told MPs an unexpected VAT bill for building costs was unlikely to add to the overall cost to taxpayers of the games.
This project is under control Tessa JowellCulture secretary Q&A: Olympic costs This project is under control Tessa JowellCulture secretary Q&A: Olympic costs
And she insisted a newspaper report that the International Olympic Committee (IOC) was to investigate London's soaring costs was "untrue".And she insisted a newspaper report that the International Olympic Committee (IOC) was to investigate London's soaring costs was "untrue".
"This project is under control. Cost control is a daily part of the rigour. Locog (the London Organising Committee for the Olympic Games) are confident that they are going to raise their sponsorship target," she said."This project is under control. Cost control is a daily part of the rigour. Locog (the London Organising Committee for the Olympic Games) are confident that they are going to raise their sponsorship target," she said.
"The IOC commission has said we have hit every milestone to date. They know that we are further ahead than any other Olympic city at this stage.""The IOC commission has said we have hit every milestone to date. They know that we are further ahead than any other Olympic city at this stage."
Security 'inadequate'Security 'inadequate'
Asked who would meet the extra £900m cost, Ms Jowell said discussions were on-going, but the earlier "memorandum of understanding" had been for overspends to be met by a mix of London council tax payers, and lottery games.Asked who would meet the extra £900m cost, Ms Jowell said discussions were on-going, but the earlier "memorandum of understanding" had been for overspends to be met by a mix of London council tax payers, and lottery games.
Planned security measures, drawn up before the 7 July attacks on London, were "inadequate", she said and were being revised.Planned security measures, drawn up before the 7 July attacks on London, were "inadequate", she said and were being revised.
But she said she did not assume costs would continue to rise over the next six years.But she said she did not assume costs would continue to rise over the next six years.
The original budget includes a contribution of £625m from London council tax payers - which works out at £20 a year for 25 years - and £1.5bn from Lottery games.The original budget includes a contribution of £625m from London council tax payers - which works out at £20 a year for 25 years - and £1.5bn from Lottery games.
HAVE YOUR SAY You could have guaranteed that the costs would go massively over budget. Just look at Wembley John, UK Send us your commentsHAVE YOUR SAY You could have guaranteed that the costs would go massively over budget. Just look at Wembley John, UK Send us your comments
It was put to Ms Jowell that one other option was getting the Treasury to waive its 12p take from Lottery tickets sold.It was put to Ms Jowell that one other option was getting the Treasury to waive its 12p take from Lottery tickets sold.
She did not confirm or deny that possibility, saying only that "discussions" were taking place in private about a range of funding options.She did not confirm or deny that possibility, saying only that "discussions" were taking place in private about a range of funding options.
The MPs were assured that whatever funding arrangement was agreed had to be "fair, sustainable and proportionate".The MPs were assured that whatever funding arrangement was agreed had to be "fair, sustainable and proportionate".
Bob Blackman, of the London Assembly's Conservative group, said they still did not know what impact the security shortfall, tax and contingencies would have on the overall bill. 'Entirely predictable'
"This has confirmed our worst fears, that - before a single stone has even been laid - there exists a mechanism that leaves the door open for London taxpayers to suffer part of this additional burden," he added. Shadow Olympics minister Hugh Robertson said: "The secretary of state has admitted to a 40% increase.
'Get a grip' "She has failed to disclose the true cost of VAT, contingency, building cost inflation and security, much of which was entirely predictable at the time of the bid.
For the Liberal Democrats, Don Foster MP said: "The government must get a grip on the chaos and confusion surrounding the Olympic costs." "Today's increase is just a starting point. While the figures remain ambiguous, we can only expect further increases."
He said any extra plans for regeneration should be privately funded and further government funding should be restricted to extra security. Liberal Democrat culture, media and sport spokesman Don Foster said: "The government must get a grip on the chaos and confusion surrounding the Olympic costs."
"No more money should be siphoned off National Lottery good causes. The burden on London taxpayers should not be increased." Any extra plans for regeneration should be privately funded and further government funding should be restricted to extra security, he added.
But Pete Wishart, for the Scottish Nationalist Party, said London "must pick up the bulk of the tab", as it was London that would benefit the most.
The ODA and the government are reviewing the original budget for the games and are expected to announce a revised financial plan next February.The ODA and the government are reviewing the original budget for the games and are expected to announce a revised financial plan next February.