London 2012 at risk of exceeding budget

The 2012 Olympic Games could overshoot its £9.3bn budget unless "rigorous action" is taken to curb costs, the Whitehall spending watchdog has warned.The National Audit Office said a doubling in estimated security costs meant there was a "real risk" that more taxpayer funding would be needed.On Monday, the government said an extra £271m was needed for security guards.Ministers insist more than £500m remains in unallocated funds for dealing with any further contingencies.The spending watchdog said the Olympic Delivery Authority remained on course to complete its work on the Olympic Park on time and on budget.But on current projections, it said almost all the £9.3bn public sector funding package was likely to be required, with little margin for any further unforeseen costs emerging in the final eight months.The head of the NAO, Amyas Morse, said "not everything is rosy" and the government had little room left for manoeuvre."The government is confident that there is money available to meet known risks but, in my view, the likelihood that the Games can still be funded within the existing £9.3bn public sector funding package is so finely balanced that there is a real risk more money will be needed," he said.The NAO said that after the government's own estimate of meeting "assessed risks" was taken into account, there was just £36m left in contingency funding.The chairman of the Commons Public Accounts Committee, Margaret Hodge, said it was a very small amount for such a large project."What is left in the budget for contingency is wafer thin, at only £36m. For a project of this size with unknown risks and eight months remaining, that is a tiny amount of money," she said."Locog [The London Organising Committee of the Olympic and Paralympic Games] is likely to use all of its contingency funding and would also have to call on further government support if there are further cost increases."A Department of Culture, Media and Sport spokesman said the Olympic programme remained on time and within budget and the government was confident that it would remain the case."The construction project is 92% complete and we have more than £500m of unallocated contingency remaining."Consistent careful management of the Olympic budget has enabled us to fund additional costs such as venue security from within the public sector funding package as well as to invest in projects that will help drive economic growth from the Games including the opening and closing ceremonies," he said.The NAO also raised its concern that the Olympic Delivery Authority's transport plan for the Games was behind schedule.It said the 109 miles of London roads being used for the Olympic Route Network - including 35 miles of special lanes primarily for the use of athletes and officials - had still not been integrated with local transport plans.Until the arrangements have been finalised, Locog and Transport for London will not be able to inform the public and businesses of the likely impact of the Games on the road network.The spending watchdog also said issues related to cutting journeys on buses and the London Underground by non-Games users by an average of 13% a day - rising to 30% on peak days - still had to be resolved."The experience of spectators, visitors and Londoners in general would be diminished and the reputation of the Games put at risk if these issues were not sorted out," Mr Morse said.The NAO added the need to find so many additional guards represented a "significant recruitment challenge" and the Home Office was now in discussion with the Ministry of Defence about using military personnel.On Monday, the government said an estimated 23,700 security staff would be needed during the 2012 Games, which was more than double the initial estimate of 10,000 security personnel for venues.It said the venue security budget was likely to rise from £282m to £553m, while the budget for ceremonies has also doubled, with an extra £41m allocation.The Department for Culture, Media and Sport said the money for both increases would come from within the £9.3bn public funding budget for the Olympic and Paralympic Games after money was re-allocated from savings.The budget is additional to the private funding budget raised by the Games organisers Locog.The Olympics is set to be one of the UK's biggest security tests - a 64-day operation, from when the Olympic village opens on 13 July to the time the Paralympic village closes on 12 September, covering 34 venues across Britain.