The cross-party Public Audit Committee (PAC) has urged the Olympic Delivery Authority to take control of various forms of risk in order for the 2012 games to be a success.
The Committee identified seven areas of risk that need to be managed:1 - Ensuring the different organisations delivering the games are effectively coordinated,2 - Delays could mean severe cost overruns, as the final deadline is fixed,3 - Determine the final budget - the government is financially exposed as underwriter for the games,4 - Effective procurement must be in place,5 - No clear legacy,6 - No risk monitoring in place,7 - Strain on National Lottery fund.PAC Chairman Edward Leigh said, 'If the London Olympic and Paralympic Games are to be the great success we all want them to be, then the risks to delivery will have to be managed with an iron hand.The Department for Culture, Media and Sport [now Cabinet Office] is ultimately responsible for coordinating the array of bodies involved. It is worrying, therefore, that strong arrangements for monitoring progress and managing risk are so far not in place. Also absent are plans for ensuring the Olympic facilities will meet the needs of users after the Games.'If the delivery timetable slips, then the danger increases of delivery organisations having to pay more to contractors or reduce standards to ensure that the Games open on 27 July 2012. This risk must be addressed by establishing suitable incentive arrangements with contractors to deliver quickly, to cost and to the right quality.'At the time of the bid, the Department seriously underestimated the costs of the Games and was far too optimistic about the extent of private sector funding. The truth is that the Government is financially exposed. The Department has finally announced a budget, totalling some £9 billion. The National Audit Office will be reporting to our Committee on this budget.'The Games will claim some £1.7 billion of National Lottery funding from other good causes. It would be manifestly unfair not to give those many causes good notice of when and by how much their income will fall,' he said.Both the Conservatives and Liberal Democrats have backed the report. Hugh Robertson, conservative Shadow Olympics Minister said, 'This report highlights two important areas of concern. Firstly, the issues surrounding the coordination of the Olympics project highlight that the Government's new reporting lines, with the Olympic Executive in one department and the Olympics Minster in another, are a total shambles. London 2012 needs simple and accountable government support structures to ensure successful delivery and these are not in place.'Secondly, the report confirms that the Government totally miscalculated the Olympic budget and, as yet, nobody including Tessa Jowell or Gordon Brown has taken responsibility,' he said.Don Foster, the Liberal Democrat shadow Culture, Media and Sport Secretary said, 'This report highlights a number of serious problems, such as the failure by the Government to get its figures right to start with. With the budget for the Olympics having already risen to nearly four times the original estimate, it is a major concern that proper monitoring and risk management are still not in place.'