“The way DCMS has handled the Olympic budget is like an episode of Only Fools and Horses – no corporation tax, no VAT, no money back, no guarantee.  Del Boy couldn’t have done it better”. *

 “Officials at DCMS are unlikely to see a penny over the £9.3 billion already allocated, while the report is clear that the budget will only be enough if DCMS officials have got their sums right.  Worryingly, there has been little sign of that so far”. 

Mr Bacon, a member of the Commons public accounts committee, was speaking as the National Audit Office (NAO) published its report into the budget for the 2012 Olympic Games today (Friday 20 July 2007).  The report finds that, at the time of the bid, the estimated cost of the Olympics was just over £4 billion, to be met by £3.4 billion in public funding and an anticipated £700 million from the private sector.  The budget announced in March 2007 is now over £9.3 billion, with a much reduced private sector contribution.

The new budget includes a new provision of £836 million for VAT and corporation tax, following the Treasury’s confirmation in March 2007 that the Olympic Delivery Authority would be liable to VAT in the normal manner and unable to reclaim it.   The report also states that the revised £9 billion budget should be sufficient to cover the estimated cost of the Games, with the important proviso that the assumptions on which the budget is based hold good.   

20 July 2007
 

* The new provision of £836 million for tax comprises £736 million in VAT and £100 million for corporation tax and stamp duty.  This provision was not made until the revised budget announced in March 2007.  For further details, see the NAO Report page 16, Figure 6, Note 5.

See also:
NAO REPORT: The Budget for the London 2012 Games
PAC REPORT: Preparations for the London 2012 Games
PARLIAMENT: Olympic Civil Servants should stay put
PARLIAMENT: Chancellor 'dragging his heels' over Olympics - MP