The cost of the 2012 Olympic Games is forecast at £377m under its original budget, the Department for Culture, Media and Sport announced this morning, a sum that would cover almost 90 per cent of the lottery funding borrowed from its good causes fund to pay for the Games.
£2.175bn of funding in total was provided by the Lottery to help pay for the Olympics, £638m of this originated from the Big Lottery Fund (BIG), £425m of which would have been earmarked for good causes.
The total cost of the Games is now forecast as £8.931bn, £377m less than the £9.298bn budget. Some £480m of "uncommitted contingency" remains within the budget, the DCMS advises, however "£103m of contingency is being held to cover the remaining risks in the programme, such as retrofit of the Olympic Village for legacy use and closing out around 2,000 Olympic Delivery Authority and LOCOG contracts".
'Money is clearly there to pay back BIG'
Ahead of the Games the Directory of Social Change launched the Big Lottery Refund campaign to apply pressure to ensure the return of the £425m of good causes funds. The government had promised the funds back to the lottery pot before the end of the games, the campaign argues, but failed to commit to this and the funding has yet to be returned.
Ben Wittenberg, director of policy and research at DSC, said today's announcement was proof that it was not necessary to take the additional funding from BIG in the first place:
"Charities have been effectively underpinning the contingency. It's bad enough that the money was taken from charities in the first place to contribute to the Olympics, but to then find out that it was only taken as contingency is not a good use of funds that could otherwise have supported tens of thousands of voluntary organisations. It's even more reason for them to pay it back immediately," he said.
"I can't see anything about how they're going to allocate it but the main thing is they've clearly got the money to be able to pay back what they took from BIG," he added.
In the DCMS's final quarterly report on the Olympics, it advised: "The centrally-held contingency funding remaining in the £9.3bn Public Sector Funding Package (PSFP), currently forecast at £377m, is largely the remainder of the government’s contribution to the PSFP. This will be retained by HM Treasury, though any monies remaining at the conclusion of the programme in the Olympic Lottery Distribution Fund will be transferred to the National Lottery Distribution Fund for the benefit of the Lottery good causes."
However no date is advised for when this will happen. Lottery minister John Penrose has previously indicated that this will not be paid back until at least the mid-2020s and potentially not until 2030/31. "This timeframe is simply not acceptable. A repayment schedule lasting several decades is not credible or reliable and we will continue to press for a much clearer commitment from Government to refund the Lottery immediately after the Olympics conclude," the DCS has said.
The National Lottery is also to benefit from the sale of the Olympic Village in March 2014. Half of these funds will go into the Big Lottery Fund pot and in September it announced that it would set up an Olympics legacy trust with the proceeds. The DCMS reports the total sum paid to lottery distributors as £69m, meaning BIG will receive £34.5m.
An additional £675m will be paid back to the National Lottery from the sale of land in the Olympic Park in response to its £675m contribution to the PSFP when it was increased in March 2007.
