How Olympics partner CLM cost the taxpayer an unbudgeted £250 million

Olympics construction partner came in 63% over budget

I’m indebted to a sharp-eyed Slogger for bringing this little triumph of Sir Humphrey purchasing nous to my attention. It involves building works done for the Olympic Games by the joint venture company CLM.

To use the Locog jargon, CLM was a ‘private sector delivery partner’ for the Olympics.  A couple of years after Britain was ‘awarded’ the Olympic Games in 2005, construction work began in earnest. As this happens, CLM’s proft margins leap from an average of 10%…to 32% in 2008, 35% in 2009 and 2010 – and then a whopping  41% in 2011.

This is standard stuff when the private sector supplies the boys in Whitehall: no attention to commercial detail from the buyers….and the nearer things get to completion, the more the Sir H’s start to fret – the more the bills get loaded.

It seems the final bill for CLM’s services  is now expected to total £650m – a 63% rise above the £400m originally quoted.

And this is just one supplier. Keep a sharp eye out for those final Olympics costs.

Pop goes the weasel, etc etc

 

 

16 thoughts on “How Olympics partner CLM cost the taxpayer an unbudgeted £250 million

  1. We all know the budget expanded from an initial £2.4bn to £9.3bn (nearly 400% over the original estimate) so 63% over budget is pretty modest in the larger scheme of things, this is small beer and old hat.

    London 2012 -the Olympics and now the Paralympics – has been a runaway success, confounding all the direst predictions of Jeramiahs like you John, so maybe it’s time for you to show a little grace and belt up about it.

    Doggie Biscuits to you.

    • Rolling Tomatoes: By your own estimation the budget ballooned from a predicted £2.4bn to £9.3bn yet this represents, in your view, a “runaway success”?

    • ££9 bn is government accounting. Proper accounting bound to be far higher.
      Let’s suppose the all up cost is £12 bn. That’s £200 for every man, woman and child in the country or £800 for a family of four. i want my £800!

  2. Evening,

    Did anyone think it was going to be different?

    Of course the Olympics was always going to cost a fortune, and in addition to all the money we owe this will now be added to the bill, in return for some alleged ‘profits’, on the back of the Olympics.

    In fact what was spent on the Olympics will wipe out any ‘savings. that nice Mr Osbourne has been able to make…

    Especially as the coalition, have had to borrow more money than they had planned to…

    So just like the tale of the Emporer with no clothes, we had better hope that no one in the finance markets, does not point out that we are naked…

    As it could be somewhat embarrassing…

    • Let’s hope they do notice and quick. Let’s hope it causes total chaos and quite a few heads roll and we get genuine change. What’s the point in carry on like this for decades?

    • Err, the “Coal-a-lisshion” did not gift “us” the “oh-limp-ix”…Bliar and his cronies did that for us, so please don’t blame anyone else for the horrendous waste of money it actually turned out to be.

      I thank you.

  3. Government and civil service are the most incompetent clients; they don’t know what they want, they don’t know how to specify it, they don’t have a clue how to control costs, they don’t know how to split up the project into manageable chunks, they get conned by the first greedy contractor, and they presumably aren’t even corrupt enough to profit themselves.

    Every government-sponsored project for the past 40 years I would guess, has been out of control from Day One.
    The next one will be just the same, and sadly there will be loads of them, big and stupid infrastructure projects to ‘stimulate’ the economy.

    (Lets have another crossing of the Thames, the Severn, The Humber, and the Manchester Ship Canal ………. ) yes, lets.

    • But Minister, it was surely a wonderful success, a great showcase to the world; think of the long-term economic benefits, Minister, the intangibles, much goodwill has been created, and of course we must not ignore the regeneration of a sadly neglected area. Look not at the cost but the value, Minister. [Sir Humphrey Appleton].

  4. One never ever sees Estimators and Quantity Surveyors and Cost Accountantants advertised for anymore- all the old fashioned mathmaticians are a dying breed now- their rule books are museum pieces.

    It is shocking to note how the Weymouth relief road budget soared and soared and soared- a very small stretch of road finished in time for the Sailing Olympics

  5. Pingback: Monday morning: nothing new to see here | A diary of deception and distortion

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