New research co-authored by Bent Flyvbjerg, Professorial Fellow at St Anne’s, has found that the London Olympics are on course to be the most expensive to date, with a projected cost of £8.4 billion in real terms – 101% over budget.
The study conducted at the Saïd Business School compared cost data from summer and winter Olympic Games of the past 50 years. It found that the London budget overrun is significantly more than the average overruns for Games during the past decade, reversing a positive trend of falling cost overruns for the Games. The result is that London 2012 is likely to rank ahead of Beijing, Barcelona and Montreal as the most expensive Games in history. Flyvbjerg says:
While all major programmes are prone to cost overruns, due largely both to optimism and conscious strategic misrepresentation, overruns of the Games are in a league of their own. When compared with typical overruns on other major programmes, such as transport and IT programmes, the Olympic Games’ budget overruns are extreme, both for their size and frequency.
The reason that the Games are so greatly over budget may lie not in the nature of the Games themselves, but in the context in which they are planned: they are typically a unique undertaking for each city – and for those working on the programme.
The research has been widely publicised in the UK and beyond, including featuring on the BBC’s satirical news programme Mock the Week. An interview with Professor Flyvbjerg was broadcast by the American television show CBS This Morning on 28 June, and can be viewed online here. Citations have appeared in news reports for The Guardian, The Economist and BBC Radio 4, among others, and the report's findings have also hit the headlines internationally, appearing in media such as El Diario (Uruguay) and on the website of NRK, Norway's largest media organisation.
More information about the study can be found on the Saïd Business School website.