Olympic finances are on track, says Locog CFO

Successfully managing the finances of London’s 2012 Olympic Games is still a
few laps from the finishing line.

Amyas Morse, head of the National Audit Office (NAO), recently said plans for
the Games’ delivery needed to be substantiated, particularly making sure the
London Organising Committee of the Olympic Games (Locog) would break even.

Neil Wood, chief financial officer of Locog, has little doubt that the body
in charge of delivering the games will reach the tape. “We are determined to
come within the £2bn funding envelope. For us that’s the challenge, and we are
confident of doing that.”

He maintains that, since the £2bn budget was determined in early 2006,
Locog’s planning has never steered outside of it. “We’ve done budgeting rounds
every year since 2006 – we completed version four last summer and will start
version five this October. Each one of them has arrived at the £2bn revenue
versus £2bn expenditure equation.

“We’ve already raised more than £600m out of our sponsorship target of £700m,
which is very promising, especially in this climate,” Wood said.
Locog and other delivery bodies have been asked by the NAO to resolve
uncertainties over scope and budgetary responsibilities before its next budget
in October.

Wood said: “We’ve started looking at raising a contingency fund for the
games, in the event of short-term operational needs.”

No figure has been decided for this, but it is expected to be a small
proportion of the overall budget.

At the moment, Locog’s staff numbers are just below 600. This will double in
the next six months, and be around 3,000 just before the games. Many accountants
have been sourced from its sponsor Deloitte, in the form of secondees – a trend
that Heather Hancock, Deloitte’s lead client service partner for London 2012,
says will continue. “We have seconded 27 employees with CIMA or ACCA
qualifications or en route to getting them. This number should increase
considerably over the next two years.”

However, Jean Tomlin, director of HR for London 2012, recently said: “It is
more difficult to source qualified accountants with strong commercial experience
that are able to quickly add value in our environment.”

On that point, Woods said: “For a few senior roles we’ve chosen to use the
open market because we want a mix of backgrounds. We need robust individuals
with strong negotiation skills. The finance planning function is a particularly
wearing role, so they need lots of resilience in order to cope with the
budgetary restraints.”

Wood says a key issue is getting the right controlled environment. The
incremental expansion of Locog before the games will create a degree of risk.
Controlling that risk is a crucial challenge, so they need people who can fit
straight into a dynamic, expanding workforce.

“We also need to balance our staffing requirements against our dissolution
planning for 2013, which has already kicked off. In practice, this means not
creating a large back-office so that we can be in good shape for an orderly and
speedy wind-up.”

Further reading:

London
2012 in danger of breaking into contingency fund