London risks breaking Games budget, watchdog says

Updated: 2011-12-06 15:07


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LONDON - London is in danger of exceeding its 9.3-billion-pound ($14.61-billion) budget for the 2012 Olympics unless rigorous action is taken to curb costs, Britain's spending watchdog said on Tuesday.

The National Audit Office (NAO) also said it was concerned that the venue security bill had nearly doubled to 553 million pounds, while question marks remained over the city's transport plans.

The NAO said 354 million pounds was left in the Olympic contingency coffers, but residual risks could reduce that to 36 million.

"In our view the Funding Package of 9,298 million pounds is currently so finely balanced there is the real risk that more money will be needed unless there is rigorous action to control costs in ways that represent value for money," the report said.

The government says the Olympics are on time and on budget, with more than 500 milion pounds of uncommitted contingency funds available.

However, the figures are likely to cause concern as it pursues a package of severe public spending cuts to rein in a record budget deficit.

About 92 percent of the Olympics construction is complete, with the biggest residual risks likely to come from national security planning and supply chain issues, the report said.

On Monday, the government said an extra 13,700 guards, including an unspecified number of soldiers and volunteers, would be needed on top of the 10,000 already planned to secure the inside of the Olympic venues, resulting in an anticipated extra cost of 271 million pounds.

Margaret Hodge, chairwoman of the Committee of Public Accounts, said it was "deeply worrying that at this late stage plans for venue security are not further advanced".

The report said finding the additional guards would be a "significant recruitment challenge".

The NAO report also said transport plans on London's notoriously jammed, narrow streets were behind schedule, with consultation on most of the traffic regulation orders pushed back to March 2012.

"This leaves planning until the very last moment and cannot be delayed further if transport chaos is to be avoided," Hodge added.

London Olympic organizers hope to persuade businesses to increase flexibility in shift patterns, with staff working from home or different hours. Businesses will also have to plan deliveries at different times.

The NAO, in its sixth report on the Games, said the country was failing in its Olympic ambition to get more people involved in sport.

The previous Labour government had promised to get a million additional people doing 30 minutes of sport three times a week by 2013, but the NAO said just 108,600 extra people had taken up more sport.