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23 October 2012

London Olympics exceed initial budget by £6.52bn

When is "under budget" not "under budget"?

By Alex Hern

BBC News, 1 February 2007:

How much will the Olympics really cost?

The overall budget for the London Olympics submitted in the bid to the International Olympic Committee was £2.4bn.

The figure came from a study carried out by construction company Arup in May 2002. It predicted the cost of the Games to be £1.8 billion.

The government then commissioned another report in 2004 carried out by accountants PriceWaterhouseCooper, who put the figure closer to £3.2bn. The government settled for a compromise figure of £2.4bn.

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BBC News, 23 October 2012:

London 2012: Olympics and Paralympics £377m under budget

The cost of the London Olympics and Paralympics will be £377m less than expected, according to the Government.

The combined budget for the two events was £9.29bn, but the projected cost is £8.92bn.

Savings came from a drop in security, transport and construction expenses.

In other words, “Our £6.89bn overspend was actually just a £6.52bn overspend when all things are taken into account! Huzzah!”

The latest BBC News story doesn’t even mention the original estimates at all, although an earlier news story – from July – at least featured Hugh Robinson evading the question: 

Addressing the original bid budget of £2.4bn, Sports Minister Hugh Robertson said there was a “recognition right from the word go that figure would have to change dramatically on the basis of delivering the Games”.

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