The Olympic Delivery Authority has confirmed that the cost of staging the London 2012 Games has increased from £3.4bn to £5bn, confirming industry concerns outlined at the FT Sport Industry Summit earlier this month.
Sir Roy McNulty, head of the ODA, told the London Assembly that the combination of increased security costs, an unexpected VAT bill and demands for a contigency plan have all added to the overall cost of staging the Games.
In addition to these elements, a further £1.5bn is required than was previously estimated to see through the regeneration costs for the Olympic site in the Lower Lea Valley in East London.
While the ODA and Ken Livingstone, mayor of London, both looked to appease the gathered Assembly by stating that the increased costs were in no way insurmountable, the announcement did at least answer the call from senior sport industry officials at the FT Sport Industry Summit to clarify the situation.
The government is set to confirm the new ODA budget in February of next year.