Government's 2012 Olympic budget was 'wishful thinking'

The government employed "wishful thinking" when it came up with the budget for the 2012 Olympics, the Public Accounts Committee (PAC) has claimed.

And in a report published yesterday it warned that it was still not known whether the current budget, which stands at £9.235bn would stay at the same level.

It said that officials' sums were "entirely unrealistic" and did not take account of factors like tax and security, which should have been foreseen.

The PAC said that the government had initially expected £3.4bn in public sector funding for the Games and an extra £738m from the private sector.

But the prediction for the level of private investment has now dropped to £165m.

Meanwhile it pointed out that a £2.747 contingency fund had been added to the budget, while tax clocked up an extra £836m.

And security costs are expected to cost an additional £600m while the delivery budget rose from £16m to £570m.