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Budget cuts could threaten future use of Olympic park

LONDON'S OLYMPIC Park risks becoming a white elephant if budget pressures force designers to cut corners, a London politician warned this week.

London Assembly Green Party member Darren Johnson said he feared the government might follow Athens' example in responding to cost overruns on London 2012, stripping out vital community-linked legacy projects.

'In Athens the focus was on getting the stadium built and plans to match the post-Olympic infrastructure to the local community failed to materialise, ' said Johnson.

'While there were grand plans in the bid documents for a legacy for east London and the environment, my concern is that when costs start to spiral these plans will get jettisoned.' he Olympic Delivery Authority (ODA) spokesman rejected his fears. 'This is a regeneration project with a Games overlay. There is no way we would forsake [regeneration] to cut costs, because it is central to what we are doing, ' said a spokesperson.

Concern that the government had hugely underestimated the cost of building the Park were raised by former ODA chairman Jack Lemley in an interview with the Idaho Statesman last week.

He claimed that he quit the project because of local politics and the spiralling cost of the project, which was originally budgeted at a capital cost of £2.4bn at 2004 prices, but could now top £5bn.

Lemley's comments were compounded this week by the revelation that all Olympic construction costs would be subject to VAT, landing the ODA with a possible tax bill of up to £1bn Conservative shadow sport and Olympic minister Hugh Robertson said: 'The Conservative Party, International Olympic Committee and consultants that checked costs in the bid document all understood the ODA would be tax-exempt.

'We eceived specic undertakings from the government that the Treasury would waive these costs. It would be catastrophic if Gordon Brown were to renege on that commitment now.' The Treasury, ODA and the Department for Culture Media & Sport are in negotiations over the revised budget, which will be con med in the ODA Corporate Plan next year.

Chancellor Gordon Brown told BBC Radio 4's Today programme this week that the government was committed to delivering the Olympics.

'Even if VAT is payable, it is not an issue for us, because we know we have got these commitments, ' he said. 'It is money that is transferred to the Exchequer. It's not an issue about the overall bill in the end, in as far as the taxpayer has got to pay it.'

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