Fresh funding fears for London Olympics
Published 21 October, 2008, 04:32
The global financial crisis is threatening to hit spending for London’s Olympic plans. The city is set to host the Games in 2012 and organisers already face an immense shortfall in funding for venues.
Two of the main venues in the Olympic Park may need an extra £900 million in taxpayers’ money to get built as the credit crunch hits the Games.
Initially the private sector was expected to meet the full £1 billion cost of the Olympic village and at least half of the cost of the £400 million media centre. The banking crisis has made that unlikely and the government is deciding how to make up the shortfall.
With the credit crunch in full flow it could be taxpayers who find themselves squeezed even further to meet the full cost of the bill.
Public funds may be needed not only for the main construction budget but ultimately for any overspend. That’s the worst case scenario – but no one is promising a bright future.
One Londoner said: “It’s interesting to see what the budget is finally going to end up at. I hope it’s not going to cost too much to us as taxpayers.”
The Olympic Delivery Authority insists work continues on schedule and £95 million of interim funding has been allocated to the ODA from contingency already.
“Discussions on long term funding arrangements are continuing on what is clearly a very difficult economic environment,” an ODA statement said.
But the lack of private investment has already resulted in a scaling down of the projects and moving venues, and there is growing concern that this could jeopardise the park’s legacy.
“I would be annoyed if all of the building they did and all of the infrastructure wasn’t put to a useful purpose afterwards. If it ended up like the Millennium Dome it would be a waste of money,” said David Bristow, second-hand book seller.
David has lived through several economic crises and is convinced it all depends on how the money is spent.
Chris Higson, Professor of Accounting at the London Business School, believes the credit crunch may be used as an excuse not to fund the Olympics sufficiently.
He said: “What’s interesting about the games in the UK is most people are quite ambivalent about the Olympics, and were quite ambivalent before this even started, and that probably includes the government. There were never any plans to hold such a lavish games as we’ve seen in Beijing and if you like the silver lining in the credit crunch I think is it provides the perfect excuse for being frugal and providing an austerity games.”
‘Austerity games’ was a the term from 1948, the last time London played host to the Olympics, when Britain was still recovering from its wartime losses. Hardly anyone expected grim reminders of past times to be resurrected today.
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