The GLA's draft budget 2010-11, which was published for consultation last week, makes it crystal clear why the London Development Agency is so keen to shift its Olympic debt off of its balance sheet.
Quite simply the debt is enormous and in focusing on the attempts to transfer much of it to central government and the new Olympic Park Legacy Company the report contains one of the larger understatements I have read this year.
"The outcome of these discussions [between the LDA and government over the transfer of land to the OPLC] may impact on the Olympic legacy financing strategy and the LDA budget overall," it writes.
To recap then, the report estimates that the London Development Agency will have spent £1.794bn on the London 2012 Olympics by the end of 2013.
By the end of 2008, it had spent £936m on land assembly and remediation for the Olympic Park in east London.
It forecasts that a further £140m will be spent in 2009-10 with the all-in total rising to £1.154bn by the end of 2012-13.
Between now and the end of 2012-13 a further £500m will be provided for the "Olympic Park and related expenditure" via a public sector funding package. The remaining money will be spent on "management, BID Support and Legacy Development". No, I'm not quite sure what this relates to either.
The GLA writes that £731m of the cost of buying and remediating the land is to be funded by "prudential borrowing and asset disposals". The balance will be funded by LDA core grant.
Presumably, central government would be better positioned to carry out some "prudential borrowing" than the LDA.
Elsewhere the GLA confirms that it has committed to raise up to £625m from London council taxpayers as a contribution to the public sector funding package for the 2012 Olympic Games and Paralympic Games.
The GLA budget includes an estimated sum of £59.6m to be raised in 2010-11, increasing by 0.75% per year to £60.1m in 2011-12.
How is it going do this? It estimates that the sum will be raised by a band D council tax payment of £20 for 10 years and approximately £9 in year 11.
The ODA and DCMS may rightly be touting their success in keeping costs within budget just now. Let's just hope however that it is all worth it for the Londoners who are forking out to help them do it.
'The ODA and DCMS may rightly be touting their success in keeping costs within budget just now.'
Run that past me again. Within the £2.4billion budget? Oh no, of course, you've forgotten all about THAT budget!
Hi Julian - you are of course right to be sceptical about the many budget figures. I think the line you highlight was not meant to necessarily say I am convinced the ODA and DCMS have got their sums right. In fact, what I was pointing to was the fact that when government departments like the LDA are spending hundreds of millions of pounds on things called "legacy development" and "public sector financing packages" it starts to get difficult to work out what is exactly being spent on what on the Olympics project and by whom. Are the millions the DCMS think it has saved recently on the project being picked up by other government departments for instance? Hopefully the NAO report into much of this will bring some clarity.