Huge Olympics overspend likely to hit taxpayers

Rocketing costs for the
2012 Olympics may have
to be met by all British taxpayers, a cross-party Commons panel has warned. In
an uncompromising report, the body panned
for inflating the huge price tag associated with the Games after the
Treasury insisted on a 60% contingency fund.

Original estimates put the cost of the Games at £2.375bn but there has
been increased speculation that the event will cost more than three times as
much. In recent months an unexpected VAT bill of £250m has also hindered
efforts to      combat rising costs. 

The report said: ‘Just 18 months after winning the bid, it is clear that many
of the cost figures are serously outdated.’ Funding for the core Olympic costs
is currently split between the Lottery which contributes £1.5bn, £250m from the
Development Agency
and £625m from Council Taxpayers in London. 

Concerns have been raised that that the tax net may have to be widened onto a
national scale in order to meet costs. The committee warned: ‘If the financial
pain of paying more for the Olympics is to be widely shared, it will require a
contribution from the Treasury.’

A revised budget is due to be announced in February, but officials conceded
that this would not take final security costs into account.

Further reading:

Tories demand Jowell statement on Olympics
VAT bill

Cost control bill sees Olympic budget

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