Britain faces a £1 billion black hole after the 2012 Olympics because of "ludicrous" property price projections backed by ministers, it emerged last night. Today the Conservatives and Liberal Democrats will, for the first time, vote against government plans to give the Olympics more money. Their move comes after a report for the London Development Agency (LDA) suggesting that the Government's estimates for the amount it will recoup in land sales after the Games are unrealistic. The shortfall will hit heritage, sports and arts projects already suffering from tight squeezes on their budgets. Ken Livingstone, the Mayor of London, and Tessa Jowell, the Olympics Minister, signed a memorandum of understanding last year stating that at least £1.8 billion would be raised in land sales after the Games. The LDA now fears that this figure, based on a 16 per cent per annum increase in land prices in Stratford, East London, over the next 15 to 20 years, is too optmistic. It told the London Assembly last week that it now plans to raise £800 million, leaving a £1 billion shortfall. About £675 million of this had been due to go to the National Lottery to repay money lent to the Games. This money could now be lost.
Britain faces a £1 billion black hole after the 2012 Olympics because of "ludicrous" property price projections backed by ministers, it emerged last night.
Today the Conservatives and Liberal Democrats will, for the first time, vote against government plans to give the Olympics more money. Their move comes after a report for the London Development Agency (LDA) suggesting that the Government's estimates for the amount it will recoup in land sales after the Games are unrealistic. The shortfall will hit heritage, sports and arts projects already suffering from tight squeezes on their budgets.
Ken Livingstone, the Mayor of London, and Tessa Jowell, the Olympics Minister, signed a memorandum of understanding last year stating that at least £1.8 billion would be raised in land sales after the Games. The LDA now fears that this figure, based on a 16 per cent per annum increase in land prices in Stratford, East London, over the next 15 to 20 years, is too optmistic. It told the London Assembly last week that it now plans to raise £800 million, leaving a £1 billion shortfall. About £675 million of this had been due to go to the National Lottery to repay money lent to the Games. This money could now be lost.
If the Olympic village is packaged as the sort of quasi REIT I advocate, then it changes the entire game. ie the government would not sell the land but rather the investment in the land to overseas (it doesn't yet work for UK pension funds) investors interested in a 2 or 3% real (and Islamically sound) return backed by land/property.
Moreover, with a reasonable proportion of "social" tenant what is effectively a government backed cash flow (ie housing benefits). The more affordable the rental, the more certain it is.
With the "Credit Crash" looming it's even worse than they think, because the "Black Hole" they pooh pooh is based upon the lowest scenario of land price growth ie 6% pa.
IMHO land price growth is not going to come close to that over the next 4 years. "Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky
They made a projection based on an increase of 16% in rates over the next 15 to 20 years???
Hello? And those people are kept in position of power rather than in a, to put it kindly, specialised insitution?
Maybe government has become that kind of institution after all. Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi
You're in rare form today TBG.
6 months after being chosen, the budget had already trebled. At that rate, it would not have stood a chance (which would not necessarily mean that Paris would have won since London and Madrid had an agreement that whoever went out first would then vote for the other and bring its supporting countries to the fray).
What do you know, trebling wasn't enough. It keeps going up and up. They will not repeat the fiasco of the Track and Field world championship (which had to be held in another country when London failed to organise them) of course, but it's less than impressive. Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi
Britain revolves around the cult of the amateur. We do not have professional or experienced people involved at senior levels of projects, we have the "great and the good". People who have been to public school, ie of "good standing", but who are too stupid to make money in the city and too lazy to be directly involved in government. A comic character known as Tim "nice but dim". These are the appointed idiots tasked with running all of the great projects.
None of them can count properly , none of them can read properly. The idea that any of them could even understand an explanation of how a budget works, yet these are the people who make decisions. Dilbert's pointy-haired manager would be a paragon of virtue compared with these parasitical misfits. keep to the Fen Causeway
Carefully sugest that people in positions of authority should have some kind of competence and you will immediately be branded as "elitist", "technocrat", "undemocratic", and 10 seconds later they will be haranguing about Auschwitz. Peak oil is not an energy crisis. It is a liquid fuel crisis.
Open the Future (Jamais Cascio): "Techno-Doping" and the New Olympics
Oscar Pistorius, AKA "Blade Runner" -- the South African sprinter who uses carbon fiber prosthetics in place of the lower legs amputated as a child -- has officially lost his bid to run in the 2008 Olympics. He's going to give one last appeal to the International Association of Athletics Federations, but his chances of success are slim. The official reason, according to the BBC: "...his prosthetic limbs give him an advantage over able-bodied opponents..." For now, Pistorius' artificial legs make him fast, but still human-fast (he came in second at a recent meet); although his prosthetics reduce his energy requirements by 25%, he has yet to hit the qualifying speed for the 400m race. It's entirely possible that, even had the IAAF accepted his bid, he wouldn't have made it to this Olympics. But it's also entirely possible that, in 2012, he'd be breaking records right and left. And shortly thereafter, he wouldn't be alone in doing so.
"...his prosthetic limbs give him an advantage over able-bodied opponents..."
For now, Pistorius' artificial legs make him fast, but still human-fast (he came in second at a recent meet); although his prosthetics reduce his energy requirements by 25%, he has yet to hit the qualifying speed for the 400m race. It's entirely possible that, even had the IAAF accepted his bid, he wouldn't have made it to this Olympics.
But it's also entirely possible that, in 2012, he'd be breaking records right and left. And shortly thereafter, he wouldn't be alone in doing so.
