Watchdog says government failed to predict amount of public sector spending

The budget for the 2012 Olympic Games has been slammed by a government spending watchdog.

A report by the government鈥檚 public accounts committee also said that the ODA should not shy away from getting rid of unruly contractors.

The report said the government鈥檚 original estimates for the Games were too low, and that it failed to take into account the extent of public-sector spending.

It said the ODA should have rights of access to contractors鈥� books to check costs and financial viability, and should introduce incentives for delivering to time and cost targets.

It recommended early warning arrangements to identify and resolve any problems with contractors, and, if necessary, replace them.

The government originally gave an 鈥渦nrealistic picture of the expected costs鈥� for the Games, found the report, and said its decision to exclude the 拢2.2bn programme contingency was 鈥渃ontrary to good practice鈥�.

The report said 拢500m, or 18%, of the contingency has already been used. Even though the government has said the remaining 拢1.7bn will likely be spent, the report said there should be 鈥渘o assumption鈥� that it will be used, and that it should only be spent in the event of 鈥渦nforeseen costs鈥�.

Uncertainty over the role of private sector contributions has increased the cost to the public purse by 拢748m. The Olympic Village, for example, now has a 拢175m of public sector funding where originally it was going to be fully funded by the private sector.

Edward Leigh, the committee chairman, said: 鈥溾�淒espite the astonishing increase in the level of public funding for the Games, the Department did not specify in detail precisely what will be delivered for this money, including the legacy benefits. Without this essential information, the public will find it hard to be confident in the Department鈥檚 ability to deliver the Olympics programme within the new higher budget.鈥�

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