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"most Catastrophic Financial Mismanagement In The History Of The World"


Michelle

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The spiralling costs of the London Olympics are being absorbed by an enormous emergency fund, say MPs.

In a report next week, they will savage ministers for failing to account initially for "entirely foreseeable" expenditure such as tax and security, causing the original budget to rise from £3.4billion to £9.3billion.

Tuesday's report from the Commons Public Accounts Committee is expected to say the Government has been either incompetent or acting in bad faith by hiding the true costs from the public.

Labour MP Don Touhig - a former minister who sits on the committee - said the multi-billion budget increase was likely to enter the Guinness Book of Records as the "most catastrophic financial mismanagement in the history of the world".

The report will also complain at the lack of financial controls in place to monitor the project. For example, a contingency level has not been set for each element of staging the Games in 2012.

The £2.7billion emergency fund - announced last year - is likely to be described as a safety net put in place to ensure the Games come in under the revised budget.

It has become clear in recent months that ministers are including the contingency fund in their overall estimates of what the Games will cost.

MPs on the accounts committee raised their fears while grilling organisers of the 2012 Games for their report, the second in a series of progress reports to be released over the next four years.

Alarm bells rang after an admission by Jonathan Stephens, a senior official at the Department for Culture, Media and Sport, that the 'only safe assumption is to expect it [the contingency fund] all to be spent'.

Olympic Delivery Authority chief David Higgins, however, said: "A contingency is not there to be locked in a box and never touched."

When London won the games in 2005, the original budget was set at £2.4billion for construction costs, with a further £1billion set aside for regeneration costs.

Last year, Olympics Minister Tessa Jowell was forced to admit to the Commons that costs had risen to £9.3billion, including tax, security and the emergency pot. There are predictions that costs could soar to £20billion.

In the first committee report of last summer, MPs warned of further raids on the taxpayer as "any slippage in the delivery programme would bring the risk of having to pay more".

The committee's chairman, Tory Edward Leigh, has once again warned the Government to "expect a critical report", saying it had "grossly underestimated the entirely foreseeable costs".

A committee source told the Daily Mail last night: "It is going to be highly critical about the overruns which have got us where we are and the problems of hitting the target budget without using the contingency."

Ministers are also expected to be accused in the report of 'robbing Peter to pay Paul' by diverting more than £2billion from National Lottery funds. During evidence sessions, Labour MP and committee member Austin Mitchell said leaving VAT out of the original calculations was "amazing" and left the impression that initial figures were "intended to deceive".

It has also emerged that the cost of buying land and compensating owners would be £30.4million above current estimates "funded from the approved budget contingency".

The Tories said the news "reinforced the need for a much more open budget".

Committee member Richard Bacon called the figures a "worrying development".

Earlier this month, Jack Lemley, the former chairman of the delivery authority, scoffed at the £9.3billion cost and accused London mayor Ken Livingstone of suppressing the true cost to win public backing.

He said that he was working to a budget of "well over £12billion" and he had expected it to rise to £20billion.

Daily Mail UK

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So, it would seem its not only the resident 'turncoat' who is appalled at the budget rises, the Commons Public Accounts Committee is set to deliver a damning report too. Wow! British politicians savaging the games "financial mismanagement".

The gloves are coming off!

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We'll see. Frankly, I have never trusted the Daily Mail as far as I can spit and I won't be altering that course of action now.

I will wait and see what the committee actually says, before I make any kind of judgement. You would do well to do likewise.

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I do not seek to overlook it for a moment. All I am pointing to you is that he is a backbench Labour Member of Parliament who was a junior minister until May 2006, presumably when removed from post by the then Prime Minister. I have to confess I had not heard of him before I read that story, but I would not be at all surprised if there wasn't an axe to grind there.

Same applies with Austin Mitchell. I have a great deal of respect for Mr Mitchell as a very good constituency MP for Great Grimsby for more than 30 years now, but, even if there is an element of truth in what he is saying, anyone who knows British politics knows that he is not exactly this Government's biggest fan and the second part of that charge does read to me as being somewhat over the top.

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take a deep breath and walk away from the baby - barbara!

good grief - the games are happening in london - on the whole we as londoners are happy that they are happening in london!

as a londoner i am honoured to be hosting the games - and as a londoner i am happy to pay for the games in london!

now - as you are a belgian and have nothing to do with london 2012 - what is your issue?

btw - please feel free and stay with me during the london games as you are more than welcome to celebrate with us!

The spiralling costs of the London Olympics are being absorbed by an enormous emergency fund, say MPs.

In a report next week, they will savage ministers for failing to account initially for "entirely foreseeable" expenditure such as tax and security, causing the original budget to rise from £3.4billion to £9.3billion.

Tuesday's report from the Commons Public Accounts Committee is expected to say the Government has been either incompetent or acting in bad faith by hiding the true costs from the public.

Labour MP Don Touhig - a former minister who sits on the committee - said the multi-billion budget increase was likely to enter the Guinness Book of Records as the "most catastrophic financial mismanagement in the history of the world".

The report will also complain at the lack of financial controls in place to monitor the project. For example, a contingency level has not been set for each element of staging the Games in 2012.

The £2.7billion emergency fund - announced last year - is likely to be described as a safety net put in place to ensure the Games come in under the revised budget.

It has become clear in recent months that ministers are including the contingency fund in their overall estimates of what the Games will cost.

MPs on the accounts committee raised their fears while grilling organisers of the 2012 Games for their report, the second in a series of progress reports to be released over the next four years.

Alarm bells rang after an admission by Jonathan Stephens, a senior official at the Department for Culture, Media and Sport, that the 'only safe assumption is to expect it [the contingency fund] all to be spent'.

Olympic Delivery Authority chief David Higgins, however, said: "A contingency is not there to be locked in a box and never touched."

When London won the games in 2005, the original budget was set at £2.4billion for construction costs, with a further £1billion set aside for regeneration costs.

Last year, Olympics Minister Tessa Jowell was forced to admit to the Commons that costs had risen to £9.3billion, including tax, security and the emergency pot. There are predictions that costs could soar to £20billion.

In the first committee report of last summer, MPs warned of further raids on the taxpayer as "any slippage in the delivery programme would bring the risk of having to pay more".

The committee's chairman, Tory Edward Leigh, has once again warned the Government to "expect a critical report", saying it had "grossly underestimated the entirely foreseeable costs".

A committee source told the Daily Mail last night: "It is going to be highly critical about the overruns which have got us where we are and the problems of hitting the target budget without using the contingency."

Ministers are also expected to be accused in the report of 'robbing Peter to pay Paul' by diverting more than £2billion from National Lottery funds. During evidence sessions, Labour MP and committee member Austin Mitchell said leaving VAT out of the original calculations was "amazing" and left the impression that initial figures were "intended to deceive".

It has also emerged that the cost of buying land and compensating owners would be £30.4million above current estimates "funded from the approved budget contingency".

The Tories said the news "reinforced the need for a much more open budget".

Committee member Richard Bacon called the figures a "worrying development".

Earlier this month, Jack Lemley, the former chairman of the delivery authority, scoffed at the £9.3billion cost and accused London mayor Ken Livingstone of suppressing the true cost to win public backing.

He said that he was working to a budget of "well over £12billion" and he had expected it to rise to £20billion.

Daily Mail UK

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It's amazing gamesbids! If you are even slightly critical of 2012 on here, you get the London brigade and their cronies chopping your legs off! The truth is sometimes awkward, I do understand. But living in a little bubble isn't making things better for yourselves.

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Its amazing what will be said to discredit people who actively protest a budget which is clearly modest and of deep concern.

I'm still waiting for you to waken up, Arwebb.

I am not discrediting anyone. All I am doing is pointing out to you some relevant background information about two of the MPs concerned. I am also fully awake. I cannot speak for you, but given your continuing ignorance of the full London picture, I do have suspicions that you may be comatose.

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Michelle,are you going to post a new topic every time an adverse newspaper article comes out about the 2012 Olympics?

You DO seem to enjoy getting a kick out of 'rubbing our noses in it'.I would have expected that sort of behaviour from a Cordelia and certain other posters but had expected a calmer and more mature attitude from you!

I understand your interest in the budget issue,but when you prefix every single comment about these news stories with such emotive words as disgusting,betrayal,irresponsible,cheat etc. it makes it difficult for London 2012 supporters to engage with you without becoming angry ourselves and making conversation with you difficult,if not pointless!

I tried to explain to you once before that there are going to be countless such stories from the British press between now and 2012 because our press is feral and likes nothing better than to try and pull down any large-scale government initiative.

Some of it,as in the case of the Telegraph and Daily Mail is nakedly political (because the 2012 Olympics are a Labour project,not Conservative).In other cases,it is just in the nature of our press to print doom-and-gloom newstories and put a bad complexion on pretty nearly everything!

Again,as I said to you before,the proof of the pudding will be in the eating! Why can't we wait and see what the 2012 Olympics will actually turn out like and weigh any achievements (of which I'm sure there will be many) against any failures (like budget overruns etc.etc.) and then make a reasoned judgement instead of jumping on every single adverse news story coming from our excitable press,because ,if you do,you're going to be one very busy lady for the next 4 years!

I can assure you that none of these stories are making news headlines here and the man-in-the-street couldn't care less.This is a country that recently allowed its government to vote to spend £20 BILLION on the replacement of Trident nuclear missiles with scarcely any adverse comment.Kind of puts the arguments about the 2012 budget into some kind of perspective,doesn't it??

And I repeat,that if the London 2012 Olympics turn out to be the resounding success I fully expect them to be,watch and read the hypocritical comments that will come from our press to the effect that they always knew they were going to be a success all along and hurrah for Britain bla bla bla!!! <_<

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Michelle,are you going to post a new topic every time an adverse newspaper article comes out about the 2012 Olympics?

You DO seem to enjoy getting a kick out of 'rubbing our noses in it'.I would have expected that sort of behaviour from a Cordelia and certain other posters but had expected a calmer and more mature attitude from you!

I understand your interest in the budget issue,but when you prefix every single comment about these news stories with such emotive words as disgusting,betrayal,irresponsible,cheat etc. it makes it difficult for London 2012 supporters to engage with you without becoming angry ourselves and making conversation with you difficult,if not pointless!

That's a fair point. Though I've noticed Michelle has posted a new thread to calm things down a bit; good on her.

I tried to explain to you once before that there are going to be countless such stories from the British press between now and 2012 because our press is feral and likes nothing better than to try and pull down any large-scale government initiative.

Some of it,as in the case of the Telegraph and Daily Mail is nakedly political (because the 2012 Olympics are a Labour project,not Conservative).In other cases,it is just in the nature of our press to print doom-and-gloom newstories and put a bad complexion on pretty nearly everything!

The Daily Mail I agree with you. You cannot take that nasty, miserable, boderline racist, xenophobic, scare-mongering rubbish seriously. I have to remind you though Mainad, The Telegraph was probably the biggest supporter of the 2012 bid out of all our national papers.

Again,as I said to you before,the proof of the pudding will be in the eating! Why can't we wait and see what the 2012 Olympics will actually turn out like and weigh any achievements (of which I'm sure there will be many) against any failures (like budget overruns etc.etc.) and then make a reasoned judgement instead of jumping on every single adverse news story coming from our excitable press,because ,if you do,you're going to be one very busy lady for the next 4 years!

These threads are fine, though I would like to see Michelle around more in the positive threads (her prerogative of course!). She only seems to pop up when bad headlines are around, which is a shame.

I can assure you that none of these stories are making news headlines here and the man-in-the-street couldn't care less.This is a country that recently allowed its government to vote to spend £20 BILLION on the replacement of Trident nuclear missiles with scarcely any adverse comment.Kind of puts the arguments about the 2012 budget into some kind of perspective,doesn't it??

Not to mention the tens of billions of pounds of taxpayer exposure from Northern Rock and the dodgy mortages the Bank of England has today proposed it will swap for good money (£50bn worth of good money). And of course the Iraq War (I wouldn't like to guess how much was spent on that).

And I repeat,that if the London 2012 Olympics turn out to be the resounding success I fully expect them to be,watch and read the hypocritical comments that will come from our press to the effect that they always knew they were going to be a success all along and hurrah for Britain bla bla bla!!! <_<

I've no doubt you're right about that.

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"most catastrophic financial mismanagement in the history of the world"

Im still shocked to the core over that quoted statement. A damning verdict on the London 2012 setup.

Well lets face it. The project manager for one of the most largest construction projects in European History, besides the Marshall Plan re-building of Europe Post World War 2, Weighted in and left the London 2012 games building 18 months ago.

When Jack Lambley, the head man for the channel tunnel construction, left it with a ringing endorsement at the mismanagement or rather mis estimate for sky high aspirations.

Do the promises that are now scaled back , wisely I might add, amount to biding while setting up a Facade to win ? Sure it does.

The IOC does not care if the UK makes fools of themselves or goes bankrupt in the process it would seem. Some in the IOC perhaps think that London as a major financial centre of the world could get into a spitting contest with China or at least attempt. Apparently they cannot at this time. To me this folly is bigger then Montreal's 1976 problems simply because we are looking at London having great amounts of History to draw on including what happen in Athens for 2004 and further back Montreal itself.

The problem with many host cities is the Denial that it would not happen to them . Every winning city either falsely believes that or pooh poohs the citizens for having looked at history with general alarm to hosting sport festivals.

Montreal was in the same state of Denial when they won their bid in 1970 as the Canadian press pointed to the massive cost increases Munich 72 was experiencing. cost increases that amounted to more then the estimate Montreal made in 1970

A city can never estimate correctly unless they indeed have the facilities in total to do the Games or are able to suspend inflation ,gravity, greed and vanity for 7 years in their locale . The Los Angeles take it or leave it bid is the only way the IOC is assured of A. Getting what is proposed and B. avoiding Reports like those coming out of London.

The Rationalization of the Games is coming and RIO might just be the trusted option for 2016 . Chicago would certainly be there as well. Tokyo their first go around had a laundry list of overruns they had to deal with. Toyko 2016 would be no different

Again what do greater and greater White elephants have to do with the Games except putting other cities off from Biding in the future ?

I loved the Montreal Olympics as a 15 year old with its grandness but what cost did that have to the province of Quebec and the Country of Canada? i falsely thought Montreal would then have a great future home for the Major Baseball team and the Canadian football League. The olympics tied the hands to provide latitude to provide for those franchises in the future and those Teams departed either in bankruptcy or moving to other cities or both.

Montreal changed the Dynamics of the country quite a bit and not for the Better.

London and England I would say will not suffer Montreal's Fate post games but one cannot tell 4 years out to the final cost to the Games both Economically or Socially. In Montreal's case it brought int he separists and made for a quick decline in the economy.

Jim Jones

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It's amazing gamesbids! If you are even slightly critical of 2012 on here, you get the London brigade and their cronies chopping your legs off! The truth is sometimes awkward, I do understand. But living in a little bubble isn't making things better for yourselves.

theres a difference between being critical in a constructive manner ,debating the issue and the hogwash arguments you put together like a kid on a sugar high. if u want a debate to develop you need to contribute towards it.

I love debating the weaknesses of london's hosting in particular with regards to its venues.

stop trying to jump up and shout the loudest to make people listen and construct something that initiates debate.

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Based on your history of predicting the outcome of events, I'm pretty optimistic London 2012 will be a huge success after reading that post. Thanks Jimmy!

:lol::lol:

I don't think anyone could have come up with such a concisely brutal response as that. Sums up Jim Jones perfectly.

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theres a difference between being critical in a constructive manner ,debating the issue and the hogwash arguments you put together like a kid on a sugar high. if u want a debate to develop you need to contribute towards it.

I love debating the weaknesses of london's hosting in particular with regards to its venues.

stop trying to jump up and shout the loudest to make people listen and construct something that initiates debate.

That is slightly unfair.

My arguments have been over a spiraling budget, which you may think is acceptable. The concerns have been legitimate and did warrant questions. Questions I would ask, irrespective of the host city.

BBC

"The government was "entirely unrealistic" in estimating the cost of hosting the 2012 Olympics, a group of MPs have said."

So please Mo Rush, telling me that my arguments are hogwash, is slightly unfair, when a British Commons Group has criticized the bidding of London back in 2005. Your unwillingness to even acknowledge my earlier post on London and why sometimes emotions run high, only to post more pretentious text, shows me the type of person you are.

----

Arwebb, Mainad, Rob,

Rob - I will be posting more often, I have more free time... and the positive issues surrounding London 2012 will hear my thoughts, absolutely.

Mainad, I enjoy reading your views on issues too. It was actually your post (and that of a respected fellow) who made me consider and reflect.

Arwebb, we have tended to disagree a lot over London 2012. But I do understand some of your views and concerns over my stance that you have had.

I have to admit I was being sarcastic when I called Hull a great place. I am glad I only have to visit lol :) Enough said. BUT my relatives seem to enjoy it for the most part.

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