Security Costs Break Budget

It should come as no surprise to learn that the London 2012 Olympics Budget (currently standing at £12BN, including running costs) is set to be broken, as the costs for security spiral.

Anti-terrorism measures will cost an estimated £1.5BN, they were originally "budgeted" at being £500M.

Among the extra measures being considered, to protect athletes and spectators from an attack, include drafting in the Army. Military helicopters will patrol overhead and jets will be on stand-by to protect a no-fly zone over the Olympic stadium in Stratford.

The security operation is expected to be the largest in peacetime Britain, the event is being classed as a major terrorist target.

A cynic might suggest that the police are using the event to push the Home Office into paying for security measures over and above the needs of the Games, such as demands for a new police command and control centre.

Surely not!

The irony is that there is in fact, as yet, no costed security plan. Seemingly one won't exist until the end of this year.

It would not be unreasonable to ask at this juncture how it is that the organisers can claim that the budget is £12BN, when there is in fact no budget for over 10% of the estimated current costs of the games.

Olympic Medals won during the Beijing 2008 Olympics

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The Austerity Games

The ongoing turmoil in the financial markets and credit crunch has negatively impacted the ability of the Olympic Delivery Authority (ODA) to raise funding to build the 2012 Olympic Village.

The ODA says that has only raised half of £1BN needed for the athletes' village and media centre in Stratford, East London.

The shortfall may have to be taken out of the Olympics contingency fund.

As noted many time before the budget for the games, even before the credit crunch, was a work of fantasy; ballooning from £3.4BN to currently £12BN (including £2BN running costs).

The last time that the games were held in London, in 1948, the UK was experiencing an austerity economy as the country struggled to get back on its financial feet after the war.

It seems that the organisers of the 2012 Games may have to adjust their expectations accordingly, to an "austerity" mindset.

Olympic Medals won during the Beijing 2008 Olympics

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Gone Fishing

Accountancy Age reports that HMRC's investigation into offshore accounts, now covers up to 80,000 individuals suspected of using offshore bank accounts to avoid paying UK tax.



A good sized haul of fish to wade through.



Seemingly HMRC have mounted this massive fishing trip, because they are desperate to have a criminal prosecution.



The trouble is as Bob Brown, global leader for tax and investigations for Ernst & Young, says:



"The quality of information [on offshore accounts] is not as good as they thought and they lack enough experienced investigators to run with this."



Would it not therefore be better to cut one's cloth according to one's girth, ie focus on known criminals rather that go fishing?



Olympic Medals won during the Beijing 2008 Olympics



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Polish Emigration Threat To Games

An exodus of skilled Polish workers, leaving recession hit Britain for their motherland, is threatening the Olympic building programme for the 2012 games.

There are currently not enough skilled British workers to replace them. The government, ever keen to maintain its "employment figures" has neglected the skills base of the UK; as employing people flipping burgers is not necessarily as "value adding" as a skilled trade.

In order to combat the expected skills shortage, a fast-track training scheme is being put in place to teach British workers basic construction skills, including how to use a digger.

The Olympic Delivery Authority, the London Development Agency (LDA) and other partner organisations will spend £20M (23% of their training budget) on this scheme.

Olympic Medals won during the Beijing 2008 Olympics

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The Perils of Advertising

The Guardian warns that the rules governing the use of words in advertising associated with the Olympics are draconian.

Quote:

"Under the 2006 London Olympic Games and Paralympics Games Act, normally innocuous words such as 'Game', 'Medals', 'Gold', '2012' and 'Summer' cannot be combined in any form of advertising around the Olympics, with anyone flouting the law facing a fine of up to £20,000."

How did it come to pass that words such as "game" and "summer" are forbidden?

Olympic Medals won during the Beijing 2008 Olympics

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The Credit Crunch

The organisers of the London 2012 Olympics had been banking on rising property prices to encourage the private sector to bankroll the ever increasing budget for the games (currently estimated at around £12BN, but more likely to hit £20BN by 2012).

However, as a result of the ongoing credit crunch, property prices are falling.

Paul Deighton, CEO of the London Organising Committee for the Olympic Games, is of the belief (according to the Chicago Tribune) that the crunch is a temporary setback.

Optimism is all well and good, but anyone who believes that the current turmoil in the world's financial markets is only temporary is one sandwich short of a picnic.

Olympic Medals won during the Beijing 2008 Olympics

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The Challenge Ahead

Sebastian Coe, chairman of the organising committee for the 2012 London Olympics, spoke about the responsibility of hosting 2012 Games:

"It is a massive responsibility.

We don't find it daunting.

I think that I can only relate it to sitting in a stadium when I was a competitor watching an outstanding performance in my own event. I didn't feel cowed by it. I went out and wanted to emulate it or even do better.

Beijing has delivered a spectacular games and we will also deliver a spectacular games."

Will they be on budget though?

Olympic Medals won during the Beijing 2008 Olympics

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www.olympicsdiary.com brought to you by www.kenfrost.com "The Living Brand"