telegraph strory of 14/4/12 quoting jonathan stephens

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London 2012 Olympics: Government furious over Margaret Hodge's criticism of Games budget

A furious row has broken out in Westminster over the Olympic budget, with ministers and officials at the Department for Culture, Media and Sport accusing an

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09/05/2012http://www.telegraph.co.uk/sport/olympics/9141833/London-2012-Olympics-Govern...

influential parliamentary committee of “deliberately misinterpreting” figures and “headline grabbing”.

Criticism: Margaret Hodge says the Games is over budget Photo: DANIEL JONES

By Paul Kelso (http://www.telegraph.co.uk/sport/columnists/paulkelso/)

6:15AM GMT 14 Mar 2012

27.4K followers

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The dispute follows the publication of a critical report by the Public Accounts Committee last week in

which it stated that the eventual Olympic (http://www.telegraph.co.uk/sport/othersports/olympics/) budget

could rise to £11billion, £1.7billion more than the public sector funding package agreed by ministers five

years ago.

The report also stated that there was only £100 million remaining in the contingency fund for the Games,

a fact disputed by DCMS, which cited a £500million surplus in its last report.



The PAC’s findings were widely reported by print and broadcast media. Chairman Margaret Hodge gave

a number of interviews to television and newspapers in which she highlighted the £11billion figure.

The report’s findings are significant because the PAC is the most powerful and influential parliamentary

select committee. It has a mandate to assess whether government spending provides value for money,

and works closely with the National Audit Office.

However, the report and Hodge’s comments severely riled ministers and, in a highly unusual move,

Jonathan Stephens, the senior civil servant at DCMS, has written to Hodge to complain about the report

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One source described Hodge’s comments as “grandstanding” and said ministers and officials were

furious. “There is a view in the department that Hodge and the PAC deliberately misinterpreted figures

put before them, and that the chair was effectively grandstanding to win a few cheap headlines.

“There are serious concerns at the highest level in government at the way the PAC has operated.”

In his letter, a copy of which has been seen by The Daily Telegraph, Stephens cites a speech by Hodge

in which she said she would not use her influential position to win headlines.

He then accuses her of doing just that, claiming that in two important areas the report was “inaccurate

and untrue”, and could undermine public confidence in the Olympic project.



“The report claims that only £100million of contingency remains. In fact, as I explained at the hearing

without challenge from the NAO, more than £500 million of unallocated contingency remains,” he writes.

“Second, the report claims the Games will cost £11billion. In fact, the public sector funding package

remains at £9.3 billion. The end result of the PAC’s report has been to create a false perception that the

Department for Culture, Media and Sport Olympic budget is overspent. This was foreseeable, and is

untrue.

“Far from building confidence in the management of public spending, it has undermined the hard work

put in to good risk and budget management.”

The issue of what is and is not an Olympic cost matters enormously to ministers, because delivering the

project within the £9.3 billion figure has become an article of faith for successive governments. Last

month, however, culture secretary Jeremy Hunt and Hugh Robertson, the sports minister, said they were

confident that figure would not be exceeded.

The PAC reached its £11billion figure by adding costs to the £9.3 billion. These include the £766 million

cost of buying the Olympic Park land and a further £826 million of “legacy costs”.

While this additional £1.7billion will all come from the public purse, the government claims it will either be

recouped from land sales after the Games, and that much of the “legacy” spending does not constitute

an “Olympic cost”.

The arguments might seem semantic, but for a government wedded so closely to the £9.3billion figure, it

matters enormously. The credibility of its stewardship rests on staying within the figure.

Included in the figure is £450 million spent by Sport England to try to improve sports participation, and

Visit Britain’s budget for promoting tourism, which government says is not dependent on the Olympics.

Hodge declined to get drawn into the dispute last night: “The report was unanimously approved by the

Public Accounts Committee and I look forward to the department’s formal response,” she said.

© Copyright of Telegraph Media Group Limited 2012



telegraph strory of 14/4/12 quoting jonathan stephens

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