The estimated bill of hosting the 2012 Olympics in London has been put at £9bn – a huge increase over the original estimate of £2.35bn.
The estimated cost was revised recently when the European Federation told Gordon Brown he had to charge VAT on the construction costs when the Treasury had initially agreed to waive the VAT bill. The amount of VAT each member state collects affects the annual contribution to the EU so we can expect our bill to increase yet again.
However, the revised £3.4bn bill looks like it was grossly underestimated as the cost of commodities, regeneration, security and contingency funds have all risen bringing the total to estimated cost of hosting the Olympics to around £9bn. The bill is likely to be split between the lottery and the taxpayer with the amount of money available from the lottery for charity reducing as a knock-on effect.