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ODA says Games still on budget

The Olympic Delivery Authority has moved to dismiss claims that the cost of building the 2012 Games is over budget.

This morning a report commissioned by London mayor Boris Johnson said the cost of the main stadium had increased by £29 million to hit £525 million since November and was part of an estimated £106 million hike in venue costs for the London 2012 Games over the same period.

The figures form part of business tycoon David Ross's high-level review of London's preparations for the Games commissioned by the new London Mayor.

Mr Ross, the millionaire founder of the Carphone Warehouse retail chain, carried out a three-week review in light of the current global economic downturn.

He was chosen by the new London Mayor to keep an eye on the Olympic purse strings and sits on the London Olympic organising committee board as Mr Johnson's nominee.

But an ODA spokesman said: "There are cost pressures in some areas. Equally there are potential savings in others, as David Ross points out in his report. The net cost pressure on the overall budget is £16 million so it is not correct to talk about a £100 million increase in costs as has been reported in some areas.

"Overall we remain within the budget set out by Government. The project is well managed and ahead of schedule in some areas. We are confident we can deliver as we enter the big build phase. 75p of every pound we spend is for long-term regeneration so a great deal of work is already being done to create a lasting legacy for the project.”

Mr Ross identified questions over the security of the 2012 Games, its legacy and the Olympic Village as key areas which need to be "focused on".

But the ODA spokesman said: “Given the challenging economic environment, we are in ongoing discussions about the level of public investment in the Olympic Village. We expect to finalise this later in the year. Work has started on site and this will clearly be a world-class development capable of delivering returns on any investment when the homes are sold after the Games.”

In the report, Mr Ross also says: "The extent of cost pressures affecting the venues can be seen in the £106 million increase in the anticipated final cost of the venues since November 2007.

"As an example, the Olympic Delivery Authority’s current estimate of final cost for the stadium contract has risen from £496 million in November to £525 million."

He added that the rise in the venue budget has been offset by savings elsewhere meaning there "has only been a very small increase in the overall anticipated final cost of the total programme of £16 million".

Mr Johnson, who has been fiercely critical of the mounting Olympic bill, has vowed that Londoners would not be saddled with an "unreasonable bill for generations to come".

Related link: Olympic venues to blow budget by £106m