However, the ODA said that the games project overall remains on track, with two thirds of the venue work completed, and in budget.

At a press briefing today, the DCMS said that the ODA’s anticipated final costs for the Games project have increased to £7.267 billion ($10.521 billion) from the £7.262 billion ($10.514 billion) reported three months ago.

A DCMS spokesman said that the £5 million ($7 million) increase was "a small change" as it is a rise of less than 0.1 per cent and is within the ODA’s available budget of £8.1 billion ($11.7 billion).

The DCMS said that the change is due to various factors.

The ODA had achieved savings of £130 million ($188 million) in this last quarter, mainly from the areas of transport and logistics and including work on structures, bridges and highways, bringing the total savings made to date to £600 million ($868 million).

The forecast risks on the project have also reduced by £49 million ($71 million) this quarter, bringing the total levels of assessed risks from £629 million ($910 million) to £580 million ($834 million).

However, these figures are offset by a potential increase of £23 million ($33 million) in transport costs in and around the Olympic Park, as well as a potential £30 million ($43 million) increase in infrastructure costs for the Olympic Village and the adjacent Stratford City, which will include the conversion of the athletes’ accommodation into post-Games housing.

The last quarter’s budget has also absorbed the forecast reduction in receipts from the ODA’s share in the redevelopment of land next to the Olympic Village, from £250 million ($362 million) to £100 million ($145 million).

The £150 million ($217 million) difference has been offset by an associated saving of £45 million ($65 million) in corporation tax and £30 million ($43 million) from the £130 million ($188 million) savings achieved across the Olympic park this quarter.

The balance of £75 million ($108 million) was provided from the London Olympic contingency fund.

Another £13 million ($19 million) of contingency funding was also used for upgrading the Olympic Village security, with the introduction of biometric testing to bring it in line with the rest of the Olympic site.

However, the DCMS said that £1.2 billion ($1.7 billion), or 60 per cent, of the original £2 billion ($3 billion) contingency fund is still available and puts the ODA in a "very strong position" with two-thirds of the venues and infrastructure project completed.

Over and above these figures, David Higgins, the chief executive of the ODA, said that he was confident that the body can achieve a further £27 million ($39 million) saving, required as part of the immediate budget cuts announced by the UK’s coalition Government.
Higgins said that details on where the savings would be made would be made public in the next quarter but "we are confident they will have no impact on the quality and the scope of project.."

Higgins said that the "big-build" of the main Olympic Park venues is still on track for completion in July of this year.


Related stories
May 2010: London 2012 suffer £27 million cuts as Chancellor slashes public funding
May 2010: Boris Johnson warns new Government not to cut Olympic budget