Tuesday, March 13, 2012

Here’s a Really Dumb Idea – A Country With a Failing Economy Sinks Billions into Olympic Facilities – And Expects Huge Cost Overruns

Britain’s Public Spending on Games Lays an Egg

Every four years some country invests billions of dollars hosting the Olympic games.  For some countries this is a positive event.  In 2016 Brazil will host the Olympics, and the investment in infrastructure and cleaning up many of the blighted areas of the country will probably yield a positive result, even if the games themselves lose money.

In England, which will host the 2012 Olympics the games are looking to be a fiscal disaster.

The London 2012 Olympics is almost £2bn over budget, says a scathing report by MPs who also criticise the organisers for poor security planning and failing to guarantee a clear legacy.

With almost five months to go until the opening ceremony, only about £100m of the £9.3bn budget remains in contingency. That £9.3bn does not include £788m spent buying land for the Olympic Park in Stratford, east London, and at least £826m on legacy projects – including increasing participation in sport, an endeavour the Government is no longer pursuing.

When this spending is taken into account, the true cost of the Games is now around £11bn, the Commons Public Accounts Committee reports today

One rationale for hosting the Olympics was that it would generate a huge number of sports participants in the country.  That hasn’t happened.

The report by the Public Accounts Committee (PAC) points out that despite massive spending on "sporting legacy" only 109,000 people have begun participating regularly in sport.

The original target – of one million people by March 2013 – was dropped. The report says the Department for Culture, Media and Sport (DCMS), "has got poor value for money for the £450m spent through sporting National Governing Bodies", adding: "It is unclear what the sporting participation legacy of the Games is intended to be." The Home Office and the DCMS gave Locog money for security based on an initial estimate of personnel required. That total – and the security budget – was roughly doubled in December.

But it’s okay, see after the Olympics 8,000 homes will be built on the Olympic Village site.  Right.

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