London 2012: Olympic security cost raises concern among MPs

The Olympic Stadium "must not become a white elephant", say MPs

MPs have raised concerns the London 2012 Olympics may go over budget and said it was "staggering" initial estimates about security costs were so wrong.

ThePublic Accounts Committee's reportalso warned the stadium must not become a white elephant.

The government insists it is confident the event will come in under budget.

The Games and legacy projects are expected to cost about £11bn, the report said.

Margaret Hodge, who chairs the Public Accounts Committee (PAC), said: "The venues and infrastructure of the London Olympic Games are on track to be delivered on time and within budget.

"The Olympic Delivery Authority's management of the building programme has been exemplary.

"However, the £9.3bn public sector funding package is close to being used up and we are concerned about whether the running of the Games will be held within budget.

"Taking into account costs outside the package, the full cost to the public of the Games and legacy projects is already heading for around £11bn."

'Weak negotiating position'

Mrs Hodge said the committee was "particularly concerned" about the significant increases in the security bill.

"Locog (the London organising committee) now needs more than twice the number of security guards it originally estimated and the costs have roughly doubled.

"It is staggering that the original estimates were so wrong."

The report states Locog has been forced to renegotiate its contract with G4S for venue security from a "weak negotiating position".

Mrs Hodge added: "There is a big question mark over whether it secured a good deal for the taxpayer."

Locog's original estimate for the number of security guards in and around the venues was 10,000 - a "finger in the air estimate", according to the PAC report.

The government announced in December that figure had more than doubled to 23,700.

Security costs from the Olympics budget have risen from £282m to £553m.

The report said: "Locog itself now has almost no contingency left to meet further costs, even though it has done well in its revenue generation."

On legacy, the PAC report raises concerns over sports participation targets and the stadium after a deal for West Ham United Football Club to take it over was scrapped.

Mrs Hodge added: "We were promised a strong Olympic legacy but the government has chosen not to adopt the target of one million more people participating in sport by 2013 and plans for the stadium have fallen through.

"It must not become a white elephant.

Legacy 'unclear'

"The government is dispersing responsibility for delivering the legacy and we need clarity about who is accountable."

The report states that with only 109,000 new people regularly participating in sport against the original one million target - which the new government chose not to adopt - the Department for Culture, Media and Sport (DCMS) had got "poor value for money" for the £450m spent through national governing bodies.

"It is unclear what the sporting participation legacy of the Games is intended to be," says the report.

The DCMS rejected the figure of £11bn of public money being spent on the Games and defended the legacy aims.

A DCMS spokesman said: "With 140 days to go until the Olympic Games, we are on time and under budget, with over £500m worth of uncommitted contingency remaining.

"We are in a strong position and, while we can't be complacent, are confident that we can deliver the Games under budget.

"As we told the PAC in December we do not recognise the figure of £11bn. We have always been transparent about what is included in the £9.3bn.

"The cost of purchasing the Olympic Park land will ultimately come back to the public purse through the resale of the land after the Games and was therefore not included.

"Funding for the legacy programmes, that the PAC refer to, comes from existing business-as-usual budgets and we have been clear about this. These are for projects designed to capitalise on hosting London 2012 but are not an additional Olympic cost."

The DCMS said the legacy included regenerating part of east London and tenants had been secured for six out of eight venues on the Olympic Park.