I've written in the past on CR about our inability to mount grand projects. The forthcoming London Olympics, alas, is shaping up to be a case in point. As the Times warned last week, the Government is likely to raid its dwindling Olympic contingency fund yet again to cover up to a further £160 million in "unforeseen costs".
Anyone reading this who runs a business will be green with envy at the idea of being able to run a project and breezily declare one had not foreseen costs like that, and get the taxpayer to underwrite it; on the other hand, all of us who are paying for this behemoth might fairly be rather put out by it.
I have previously expressed concerns elsewhere about the spiralling budget and organisation of the London Games, so I will confine myself here to one simple point - a comparison with the Vancouver Winter Olympics currently taking place.
Some useful facts about the Vancouver Games were provided this weekend in the Financial Times. It's clear that Vancouver suffered a number of problems:
(1) the economic boom pushed up labour and material costs, and then of course
(2) the global recession hit.
(3) The city lost its triple A credit rating last year as the Games were being organised;
(4) The IOC was unable to sign up two out of 11 budgeted global sponsors, and a number of local sponsors also pulled out.
So they had a plethora of excuses for problems, perhaps even worse than London has. But still, all of the Vancouver sporting venues were built on time and on budget. Does anyone seriously think that the same will be true of the London Games?
How was this achieved? Well, the organisers offset lower revenues by trimming spending. Some workers were sacked; glossy colour publications made way for black-and-white versions.
What a sensible idea. In light of the difficulties in fundraising and managing budgets, I wonder - what cuts are being made in the preparations for the London Olympics?