London 2012: Fledgling Finances Makes Olympics An Even Better Prospect

Back in February, I wrote at length about how the Olympics budget was being slashed by around £500m, and would come in under budget and on time. Three and a half months later, and the final report before the Games themselves has been released. And it certainly makes for interesting reading.

Let me start with a bit of background: the 2012 Olympics Quarterly Economic Report has been compiled and produced since the end of 2011, with the sole purpose of keeping the public informed on where the money is being spent, and the progress of the Olympic Park, the venues, general infrastructure, and other Games-specific costs. It has been a fascinating insight into how London 2012 is coming together.

The Public Sector Funding Package, or 'budget' to everyone else, remains at the £9.298bn agreed upon back in May 2010. That PSFP is made up of categories, such as Games Delivery, security, Paralympics, Games transformation, media work, LOCOG and policing. Although the budget remains the same, money is being chopped and changed throughout all these categories, to ensure a better Games.

The money that has been saved has since been sent elsewhere. The Olympic Delivery Authority has the job of building a Games that will make London, and Britain proud. £6.761bn of the overall PSFP has been assigned to the ODA, and this has been what has transformed a derelict, run-down area of East London into the sporting centre of the world. That figure has decreased from £7.321bn back in 2010 - a saving of over £500m. That's been distributed across increased security, LOCOG funding for athletes, and operational provisions.

Including these savings, the ODA reduction in costs against the initial budget now stands at a whopping £1.004bn - a phenomenal feat given the economic situation we find ourselves in. Games preparation is 98% complete, and that would be 100% if post-Games activities weren't included.

One very interesting statistic is that of the Olympic Stadium. The 80,000 seater stadium was structurally complete by early 2011 - just four years after ground on the Park was broken. It has cost £428m to construct the centrepiece of the Olympics, and costs have been reduced by using recycled materials and sponsorship for exterior elements. Bearing in mind the initial budget was £496m, it is unheard of for a British stadium to be delivered early, under budget and to be eco-friendly.

Compare this to Wembley. The costs for 90,000 seats in a large concrete bowl were unheard of. Original delivery should have been in 2003, but it was four years late, and over £300m over-budget. The cost of an extra 10,000 seats, in very literal terms, is just over £350m. Now, to me, that seems a little high....

Costs of the Games will be properly outlined and compared in September, when the London Olympics will be all but a distant memory. Many have said that £9.3bn for two weeks worth of sport is far too high, but in reality, it has rejuvenated an area, brought a whole nation together, and will be a massive boost to the economy at a much needed time. Many are expecting a £10bn increase to tourism, and the city will come alive at the end of July.

I'll keep you posted over the next thirty days as the atmosphere builds, and the buzz becomes electric. It will be an incredible summer, and I for one can't wait to share it with you all.

You can come and say hello on Twitter - I'm @AdamMillsUK. You can also let me know your thoughts via the comments box below!

Tags: 2012, Budget, Olympics

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