Committee of Public Accounts: Press Notice

PREPARING FOR SPORTING SUCCESS AT THE LONDON 2012 OLYMPIC AND PARALYMPIC GAMES AND BEYOND

Publication of the Committee's 42nd Report, Session 2007-08

PREPARATIONS FOR THE LONDON 2012 OLYMPIC AND PARALYMPIC GAMES

Publication of the Committee's 50th Report, Session 2007-08

Edward Leigh MP, Chairman of the Committee of Public Accounts, today said:

"Our Committee today reports on two different sets of preparations by central government and other organizations for the 2012 London Games. The first relates to the sporting success of our teams; the second to the delivery of this enormous project.

"The current medal table goals for the Great Britain teams at the 2012 Games are demanding: fourth and second respectively in the Olympics and Paralympics medal tables. The Beijing Games this summer will be a key indicator of progress. UK Sport must publish an action plan soon afterwards clarifying the effect of the Beijing performances on the firmed up 2012 medal targets, both overall and for individual sports, and how any weaknesses in the performances of our teams will be addressed.

"The Department for Culture, Media and Sport is not yet off the starting blocks in its drive to raise the £100 million it needs from the private sector. If the sum eventually raised is too little or too late, then that might harm our teams' medal prospects. There must be a Plan B for protecting the funds of the sports most likely to win medals in 2012.

"Turning to the preparations for delivering the Games, we welcome the news that construction has begun and the programme broadly on track. Far less good is that, despite our recommendations, arrangements to manage the whole programme and the associated risks are not yet in place. As legacy and security requirements are firmed up and as lessons from Beijing are taken on board, the delivery bodies must keep tight control over costs and time. There will be pressure to change venues and infrastructure; the delivery bodies must be quite clear about the costs of any such changes and their consequences for the programme.

"The rocky state of the financial and property markets has not helped efforts, so far unsuccessful, to reach a deal with the private sector to build the Olympic Village, expected to cost more than £1 billion. The Department has unequivocally assured the Committee that the present £9.3 billion public funding budget for the Games will not be exceeded. In the light of growing uncertainties, the Department should keep an eagle eye on potential demands on the £1 billion of contingency funds which have not yet been earmarked."

Mr Leigh was speaking as the Committee published two separate reports on preparations for the London 2012 Games.

PREPARING FOR SPORTING SUCCESS AT THE LONDON 2012 OLYMPIC AND PARALYMPIC GAMES (42nd Report)

On the basis of evidence from the Department for Culture, Media and Sport and UK Sport, the Committee examined their funding strategy for medal success at London 2012; their setting of targets and monitoring of progress towards the Games; and their approach to securing wider and long term benefits from elite sporting success. ( See Appendix A for report summary.)

PREPARATIONS FOR THE LONDON 2012 OLYMPIC AND PARALYMPIC GAMES (50th Report)

On the basis of evidence from the Department for Culture, Media and Sport and the Olympic Delivery Authority, the Committee examined the progress made in preparing for the London 2012 Olympic and Paralympic Games. ( See Appendix B for report summary.)




APPENDIX A

PREPARING FOR SPORTING SUCCESS AT THE LONDON 2012 OLYMPIC AND PARALYMPIC GAMES (42nd Report)

The Department for Culture, Media and Sport (the Department) and UK Sport have responsibility for elite sport in the United Kingdom. They have set goals for the Great Britain teams to finish fourth in the Olympic medal table and second in the Paralympic medal table at the London 2012 Games. Achieving the goal set for the Olympic team in particular will require a step change in performance, with British athletes needing to win almost twice as many gold medals as they won at Athens in 2004.

To support these goals for London 2012, the government has agreed a package of funding in the seven years up to March 2013 of over £700 million, almost doubling the direct funding UK Sport provides to sports and elite athletes. This will be sourced mainly from the Exchequer and the National Lottery, while the Department is required to raise £100 million from the private sector.

This Report follows up recommendations in the Committee's previous Report on supporting elite athletes published in July 2006. It found then that many funded sports had not met their medal targets at the Athens Games in 2004 and concluded that UK Sport should look to achieve a better return from its expenditure in future. In particular, the Committee raised concerns about the way UK Sport measured and reported its own performance and highlighted the need for greater clarity about the level of performance required from individual sports in order to secure future funding. It recommended improvements in how UK Sport demonstrated best use of the increased funding that would be available in the run-up to the London 2012 Games.

Following the Athens 2004 Games, UK Sport adopted a 'no compromise' approach to funding Olympic and Paralympic sports, concentrating its spending on those sports most likely to win medals. Subsequently, with the 2012 Games to be hosted in London, UK Sport moved to funding all Olympic and Paralympic sports, even those not expected to win medals. UK Sport continues to plan on the basis that it will receive all of its funding up to 2012. However, there remains a risk that the £100 million from the private sector will not all be raised. Failure to raise it could harm Great Britain's medal prospects at London 2012 and its plans to deliver a wider sporting legacy from the Games.

In 2006-07 and 2007-08, UK Sport comfortably met its targets for achievement at elite sporting events. Its targets were set at just 75% of the targets that UK Sport had agreed with individual sports for medals and top eight finishes. In order to drive continuous improvement towards the Olympic and Paralympic goals, UK Sport's targets for the years between Games should be significantly more demanding. UK Sport currently describes its medal table ambitions for the London 2012 Games as 'ultimate goals', which it will convert to firm targets following a review of each sport's performance at Beijing in 2008.

A wider government objective for the 2012 Games is to increase levels of sports participation in the UK. There is a risk that, unless the activities of a wide range of public, private and voluntary bodies are properly co-ordinated, the focus on winning medals could distract the Department's attention from encouraging ordinary people to participate. There is no clear evidence that elite sporting achievement influences people to take up sport in the long term, and Olympic medallists in certain sports such as rowing and equestrianism do not represent the make-up of the wider population, with a disproportionate number coming from privileged backgrounds.

APPENDIX B

PREPARATIONS FOR THE LONDON 2012 OLYMPIC AND PARALYMPIC GAMES (50th Report)

Within Central Government, preparations for the London 2012 Olympic and Paralympic Games are being led by the Government Olympic Executive (the Executive), which is part of the Department for Culture, Media and Sport (the Department). The Executive is responsible for co-ordinating the activities of a wide range of organisations, including the Olympic Delivery Authority, which is responsible for the construction of venues and associated infrastructure. The London Organising Committee for the Olympic Games and Paralympic Games (LOCOG) is responsible for staging the Games.

Whilst individual organisations have their own programme management arrangements, the Government Olympic Executive has not yet developed a plan for the programme as a whole, or finalised arrangements for identifying and managing risks across the programme.

The Olympic Delivery Authority has established a baseline detailing the scope, cost and timings of its projects. The forecast construction completion dates have slipped for the Main Stadium and the Aquatics Centre, but the Delivery Authority still expects to complete its construction activities in time to allow for test events before the start of the Games.

The prospect of the legacy that the Games would bring was an important element of London's bid, but a business plan for the future of the Olympic Park is not due until May 2009. An operational plan for policing and wider security has been under development for well over a year and is now due to be completed by the end of 2008. Continuing uncertainty over legacy and security, and the need to take account of lessons from Beijing, will bring pressure for change on the venues and infrastructure, at a time when construction work should be well underway.

The Olympic Delivery Authority has not yet reached agreement with Lend Lease, its preferred developer, on a deal to build the Olympic Village. The deal has been delayed by uncertainties in the financial and property markets and the ability of the private sector to raise finance. Pending finalisation of the deal, the Delivery Authority has paid for site preparation work to continue. The Delivery Authority has reduced the planned number of apartments to be provided after the Games from 4,200 to 3,300.

By March 2008, the Olympic Delivery Authority was forecasting total spending of £7,111 million, £16 million more than its November 2007 baseline of £7,095 million. The loss of competitive tension in procurement of the Main Stadium and the Aquatics Centre has contributed to the £106 million increase in forecast venue costs, with offsetting decreases in the costs of site preparation and infrastructure. The Department remains confident that repayment of £675 million to the National Lottery from land sales after the Games, will be achieved despite the downturn in the property market. The Department assured the Committee it will stay within the total £9,325 million budget for the Games.