• Text size      
  • Send this article to a friend
  • Print this article

Games organisers turn to emergency funds as £46m back-up pot exhausted

THE organisers of the Glasgow 2014 Commonwealth Games have exhausted their £46 million back-up fund and have been forced to break into emergency cash reserves as costs continue to rise ahead of next month's event, the Sunday Herald can reveal.

The general contingency fund for the £563m sporting festival, which was supposed to be spent only if "absolutely necessary", is now empty, the organisers admitted last night.

The Scottish Government also confirmed a further £800,000 had been "notionally committed" from a last-resort Special Reserve fund in order to fit out the Games venues.

The £23.8m Special Reserve was set up as an emergency fix in the event of "exceptional circumstances" only, and its use requires the First Minister's personal approval.

The draining of the general contingency fund, six weeks before the 12-day Games begin on July 23, has been caused by spiralling costs for transport, logistics and venue preparation.

Originally, £42.3m was set aside in the general contingency fund to cope with any cost pressures.

This was later topped up with £3.5m from commercial revenue, making £45.8m in total.

The Sunday Herald revealed in February that £30m of this had been spent, despite the 2014 Strategic Group, which is chaired by the First Minister, warning the Games organising committee to try to avoid dipping into the fund.

Just a fortnight ago the Games organisers said £8.5m remained in the general contingency.

However, Glasgow 2014 yesterday confirmed the entire £45.8m fund had now been spent, forcing them to turn to the Special Reserve.

Peak spending on the games is still far from over, as the organisers expect to spend half the total budget between April and September.

The cost of the Games has already risen 50% since Glasgow won its bid to host the event in 2007.

The cost of the Manchester Commonwealth Games of 2002 rose 120% and Delhi 2010 rose by 280%.

Around £100m of the cost for Glasgow 2014 is being met from commercial receipts such as sponsorship, merchandising and ticket sales.

However, the rest falls on Scottish taxpayers, with the bill split 80:20 between the Scottish Government and Glasgow City Council.

Hugh Henry, the Labour chair of Holyrood's Public Audit Committee, which is keeping tabs on the Games spending, said he would be asking Scotland's Auditor General for an update on whether any truly "exceptional circumstances" had triggered the use of the Special Reserve.

He said: "I realise contingency funds are there to meet unexpected demand.

"I will ask the Auditor General if she is aware of any exceptional expenditure and what the implications might be. We want the Games to be the best ever, but we must also make sure the public's taxes are being used wisely."

Conservative sports spokeswoman Liz Smith said: "There is ongoing concern about the lack of transparency over spending on the Commonwealth Games, and most especially as to why there is now use of the Special Reserve fund. The public has a right to know what has caused this."

A Scottish Government spokesman said: "Glasgow 2014 is in the final stages of delivery and as with any major project, contingency funding was put in place as part of the overall budget.

"At this time £809,555 from the Special Reserve of £23.8m has been notionally committed to meet costs associated with venue fit, should they materialise.

"Games partners are confident that remaining funds are sufficient to accommodate further planned expenditure and any remaining issues or risks which emerge, and will work to ensure Scotland hosts a safe, secure and successful Commonwealth Games."

A Glasgow 2014 spokeswoman said: "Glasgow 2014's budgeting processes recognise that costs can change as operational plans mature and develop.

"With just weeks to go until the start of the Games, we are entering the final stages of preparations and the majority of contracts are in place, aiding budget certainty.

"Throughout the delivery of the Games, we have continued to ensure contingency funds appropriate to the scale of the project have been assigned. We also continue to make every effort to ensure best value in delivering an outstanding Games experience for athletes and spectators, and remain confident that the Games will be delivered within budget."

Contextual targeting label: 
Sport

Commenting & Moderation

We moderate all comments on HeraldScotland on either a pre-moderated or post-moderated basis.
If you're a relatively new user then your comments will be reviewed before publication and if we know you well and trust you then your comments will be subject to moderation only if other users or the moderators believe you've broken the rules

Moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours. Please be patient if your posts are not approved instantly.

238869