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London 2012 budget and lack of legacy plan attacked

The Government and London 2012 bosses were attacked today for failing to produce a post-Games construction plan.

The Public Accounts Committee report published today also echoes previous criticisms of the costings for the Games, which saw original estimates of £2.3bn rocket to a confirmed budget of £9.3bn.

Criticising the Olympic Delivery Authority's (ODA) failure to produce a legacy action plan, which it promised to do by 'early 2008' the report says, this failure had led to lower than expected interest from the private sector in investing in the project.

"The absence of legacy plans has made it harder to attract private investment,
and the estimated private sector contribution has fallen by £573M," says the report.

"In finalising legacy plans, the Department [for Culture, Media and Sport] and the Olympic Delivery Authority should seek to reduce public sector costs by attracting private investors, who could also promote use of the facilities after the Games."

The report also highlighted the ODA's inability to attract a large number of bidders for its major venues as a source of escalating costs - the Sir Robert McAlpine-led consortium was the sole bidder for the main stadium, while Balfour Beatty ended up becoming the Aquatics centre contractor by default after other bidders dropped out.

"The Olympic Delivery Authority is having difficulty generating supplier competition for some venues," says the report.

"Ideally, contracts should be awarded after effective competition between suppliers. If this is not achieved, it is all the more important that the Olympic Delivery Authority builds cost and performance safeguards into contracts. The Olympic Delivery Authority should have rights of access to contractors' books to check costs and financial viability, and should establish clear contractual incentives for delivering to time and cost targets. The Authority should also have early warning arrangements and contingency plans in place to identify and resolve any problems with contractors, and, if necessary, replace them."

Opposition MPs such as Conservative mayoral candidate Boris Johnson and Liberal Democrat shadow sport secretary Don Foster criticised the early budget for the Olympics, describing it as "at best, a stab in the dark".

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