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The Olympics


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Monday, September 14, 2009

The £160M Black Hole

In June I noted that:

"a £100M black hole has appeared, as if by magic, in the 2012 Olympics accounts of the London Development Agency (LDA) - the budget for which is not included in the £12BN Olympics budget".

Unfortunately, it seems that the size of this black hole has increased by over 50%.

The Times has obtained the unpublished report by KPMG into the black hole, which states that the black hole has expanded to £160M.

Unsurprisingly the report, according to The Times, "hints at a cover-up by officials who waited more than a year before alerting senior managers to cost overruns".

A £1.4BN compensation deal was agreed with businesses who were forcibly removed from the Olympics site. However, approximately 70 firms have yet to receive their money.

Seemingly the LDA has not set aside enough to settle the outstanding claims.

KPMG noted that staff in the Olympic Legacy Directorate, the department in charge of the scheme, should have been aware of spiralling costs as early as April 2008.

Neither the person overseeing the budget nor his finance manager were qualified accountants. A remarkably inept arrangement, even by the standards of the Labour government and the London Labour administration (under Ken Livingstone) at the time.

The report states:

"The basic requirements for managing and accounting for a budget were not met. None of the senior officers of the LDA to whom we spoke accepted responsibility for checking the accuracy of the accounting information."

It would seem that those "in charge" of the Olympic finances couldn't "run a piss up in brewery", and then did their best to try to hide their failings. Hardly surprising that the budget for this Labour "ego fest" has ballooned from £3BN to £12BN (including £2BN running costs).

BTW, isn't funny how those "in charge" conveniently forget to add on the £2BN running costs whenever they talk about the costs?

For why?

They are trying to keep the headline figure reported in the media below the psychological break point of £10BN.

Unfortunately for the politicians, they will learn that the trouble with black holes is that they just keep growing.

Olympic Medals won during the Beijing 2008 Olympics

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