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Olympics budget rises to £9.3bn Olympics budget rises to £9.3bn
(20 minutes later)
Culture Secretary Tessa Jowell has told MPs the budget for the 2012 London Olympics has risen to £9.35bn. The budget for the 2012 London Olympics has risen to £9.35bn, Culture Secretary Tessa Jowell has told MPs.
She said £5.3bn would be spent on construction, compared with the initial £2.4bn budget and there would be a £2.7bn "contingency fund". Construction costs were now estimated at £5.3bn, she said - which compares with an initial £2.4bn budget. There is also now a £2.7bn "contingency fund".
She also said a further £675m would be taken from the National Lottery funds - bringing its contribution to £2.2bn. The rest of the budget increase comes from extra security and tax costs. To help pay for the games £675m more will be taken from the National Lottery.
The Tories accused Ms Jowell of losing control of costs, saying the budget had trebled in less than a year. The Tories said she had lost control of costs which had trebled in a year.
She said a new agreement would be drawn up to ensure that the Lottery and other contributors would benefit from profit sharing based on rises in land values in the Olympic park area. The £5.3bn budget for the Olympic Delivery Authority was made up of £3.1bn to build the Olympic Park and venues, £1.7bn for regeneration and infrastructure and a £500m contingency allowance.
She also said that winning the Olympics had brought an extra £7bn of private sector investment to one of the most deprived areas in Europe. The figure did not include tax, but the anticipated £840m tax bill would be met from central government funds, she said.
The overall programme contingency would be £2.7bn, she said, while another £600m had been allocated for "wider security" outside the site, and £390m for other costs including the Paralympics and community sports coaches.
She was accused of raiding the lottery good causes to pay for the overspend, but she said the Lottery would benefit from profit sharing based on rises in land values in the Olympic park area.
She said that winning the Olympics had brought an extra £7bn of private sector investment to one of the most deprived areas in Europe.
London Mayor Ken Livingstone has also pledged to contribute an extra £300m, she said - but the money would not be funded from London's council tax, nor higher transport fares.