The London Olympics: Trading Shed for Shed

May 5, 2009

This logo cost £400,000

This logo cost £400,000

The Olympics are a major issue for Londoners. Not only were they pushed through by bureaucrats and ministers above the head of the London population, which will have to pay the lion’s share of their costs, but those costs have spiralled massively since the Olympics were announced.

In 2005, it was revealed that the government had pledged an extra £1 billion to the Olympic Delivery Authority, despite initial promises that the Games would be funded purely through lottery monies and council tax receipts from Londoners.

Apparently, London 2012, which set up the bid for the Games, had underestimated both the value of the land that would need to be bought to host the site and the compensation that would be paid to businesses facing relocation.

That £1 billion was additional to the £2.4 billion originally budgeted as the total cost of hosting the Games. But in 2006, the GLA was told by the ODA that the cost would double to at least £5 billion.

According to Sir Roy McNulty, then chairman of the ODA, “rises in the price of security and regeneration and the need to establish a bigger than expected contingency fund to cover construction cost overruns” had necessitated the rise.

By February 2007, the Olympics Minister, Tessa Jowell, was admitting that the total cost would rise to over £6 billion. Regeneration costs – coping with the fate of those living on or near the Olympics site – were rocketing, as were contingency costs should the construction schedule collapse.

Meanwhile, the Treasury had somehow forgotten to include the VAT bill on construction, adding a further £250 million to the bill which should have been included from the outset.

Yet this was still far from the end of the inflationary spiral. In March 2007, Jowell told MPs that the cost of hosting the event would rise to a staggering £9.4bn, around three times the original bill.

This wasn’t due to an unforseen and accidental escalation of costs. It could have been avoided, or at least predicted, but then that might have eroded public support for the Games, which now appear to be a gigantic millstone around London’s neck.

As the House of Commons’ Public Accounts Committee reported last year, “It is now clear that the estimated cost at the time of the bid, just over £4bn, was entirely unrealistic [having] ignored foreseeable major factors such as contingency provision, tax obligations, and policing and wider security requirements.”

At the same time, “the estimate of the extent to which the private sector would contribute funding towards the games has proved little more than wishful thinking.”

The Blair government, ever enthralled by public-private “partnership” had envisaged some £738 million (a remarkably specific figure, that) in private funding. By 2008, that was down to £165 million in the best case scenario.

PAC Chairman Edward Leigh judged that, if “we don’t know whether it was deliberate or not…it seems extraordinary that foreseeable costs were left out of the budget” while “at the very best they were economical with the actualité, as a minister once put it, in order to win support for the bid.”

The PAC recounted a litany of errors; from failing to factor in VAT to the bid, to omitting a contingency fund should construction go awry.

Later in 2008, the Commons’ Culture, Media and Sport Committee released a report which looked at the Olympics Aquatic Centre, to be designed by celebrity “architect” Zaha Hadid. Like most Olympic sites, the Aquatic Centre was found to be massively over-budget. From a projected cost of £75 million, it was now on track to cost £242 million, “with a further £61m spent on a land bridge that forms part of the roof of the building, billed as the most “iconic” of the 2012 venues” as the Guardian reported.

In an increasingly common judgement, committtee member Paul Farrelly said that “the history of the aquatics centre shows a risible approach to cost control and that the games’ organisers seem to be willing to spend money like water.”

Unfortunately, comments like that are water off a duck’s back as far as New Labour have been concerned.

By now, the London Olympics have become both a running joke and an abyss into which London continues to pour money – money that it can ill afford to waste, yet continues to do so.

And if that wasn’t bad enough – the Games are also set to be an aesthetic disaster. Although appearance wouldn’t be so important if we could count on the event being staged on time and on budget, a visually successful project would be some tiny recompense for the costs of everything else failing.

But this week saw a damning report released by the Commission for Architecture and the Built Environment which found that the Olympic site could “be a bit like the Millennium Dome, surrounded by huge areas of wasteland with literally nothing there.”

According to Paul Finch, chairing the panel which looked at the games, “if you look at the Olympic site and consider what the map will look like a couple of months after the games, once all the temporary facilities have been taken out, there are going to be an awful lot of great big gaps in the site.”

Finch also reported that the quality of the architecture on site was “extremely weak” and exhibited a “paucity of imagination.” Presumably all of the imagination behind the games went into finding creative ways to keep the costs off the books and out of the public eye.

According to Finch, allotments and sheds that had lined the Lea Valley site, would be replaced more or less in kind. As he put it, “Unless there is a fundamental rethink, then people could be forgiven for wondering why sheds have been removed from the Lower Lea Valley in the name of high quality urban regeneration, only to be reinstated at a much larger scale.”

The shed in question is the Olympic media centre, which will cost some £355 million, money which is building little more than a bloated conventional office block, which is fortunate as that is precisely what it will become after the Games. That’s if anyone wants it, that is.

Love the joggers, nice touch

Love the joggers, nice touch

Embarassment about the quality of the buildings left after the Games (the “legacy” in official newspeak) may also be a factor in the departure this week of Tom Russell, the London Development Authority’s “group director of Olympic legacy.”

Perhaps he woke up to the horror implicit in the Olympic plans – a series of enormous holes and an oversized shed – just what East London needs.

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