Thursday, January 31, 2008

Wasting money deliberately? Or just plain incompetence?

Those were the two questions that popped into my head when I spotted this in The Times earlier today.

The Olympic aquatics centre (the posh name for the swimming pool complex) was originally estimated (and budgeted) at some £70 million. The current costing (errrm, no, still not actually fixed) now stands at some £214 million.

Now an additional £144 million might not seem an obscene increase in the overall governmental scheme of Olympics expenditure, but, to me, it smacks of utter incompetence in the initial estimating process. What the hell did they do? Sit around a table and pull random numbers out of a tombola?

Ah, OK, they blame the increase on VAT and inflation. "much of the disparity is explained by VAT and inflation. While venue costs estimated during the bidding process were in 2004 prices, they must be stated in 2012 prices."

So, with VAT fixed at 17.5% (or, just maybe, our gov knows that VAT will be set at a rate of 100% by 2012?), and inflation at the official government figures of just over 2.3% (not that any single one of us believes that anyway), we get a tripling in cost between 2004 and 2012? Come on, we are NOT that stupid!

And, what a surprise, the bidding contract was won and assigned to ..... deep intake of breath ..... a sole bidder! "The Olympic Delivery Authority is set to sign a construction contract with Balfour Beatty, the sole bidder."

As well as incompetence and profligacy, this smacks to me of profiteering, greed and may even be tinged with a hint of fraud. And all that money is coming out of your own back pocket one way or another to be trousered elsewhere!

Whatever happened to accountability? LOL!

Addendum: (1/2/08)
The Daily Mail appears to have identified a few 'fat cats' which just might partly explain why costs are overrunning so much.

3 comments:

Peter said...

And I worry that I don't have the right qualifications to handle the money aspects.

Meanwhile, rampant waste, mind-boggling incompetence by legions of over-funded jobsworths, dodgy dealings, jobs for the boys, crippling cost to the taxpayer, total absence of accountability... welcome to quangoland UK!

Calm down dear, it's only business as usual.

ps: Just got turned down by the government-sponsored VC broker I saw - can't see how it could make money or know anyone who would take it on.

I wonder if I maybe not pitching it right: 'this is good for the planet, good for the consumer, and stands a good chance of making a fair income for the genuine green-minded business long into the future'.

Maybe it should be: 'Look we can dop a few million of EU on this, sign it off so it's written away as a dead duck and split the proceeds'.

AmberCat said...

I would say: "deliberate fraud".

Everyone knew that they would go over budget and require more money from both the taxpayer and the National Lottery.

WE recently had the case in Scotland where the £40Million assembly building cost £400Million. And they still had major structural problems within a year of its opening.

None of these people are fit to run a 'you not what' never mind major public institutions.

Peter said...

Welcome Ambercat!

But in a worrying tilt towards the state of free speech and our litigious society, I am prompted to ask if anyone knows what the actual limits and responsibilities are when it comes to having an opinion on a blog.

I tend to restrict myself to a highly-cocked eyebrow. But if a question on some well dodgy issue is raised, just what can one offer by way of what you 'think' is going on?

There is clearly something well out of control, and certainly it's any sensible oversight of the public purse. As to why, in a culture that at least for now still involves an aggressive and inquistive press it would seem amazing if there was any deliberate policy of wrongdoing simply for the risk of being outed. Mind you... Mr. Hain, that Tory MP... and it's not like there is any great example being set from on high.

Commercially I could never imagine such a situation. Every job estimate using 3rd parties in my ad days had to have at least 3 quotes.

It can even happen with quangos. The last funding I actually got (for £4500) certainly required 3 detailed proposals and associated costs from the consultant suppliers.

However this is quite inexplicable.

The Daily Mail story is telling. But what does amaze is how quickly these things blow over with no follow-up. I recall a Sunday Express piece asking similar questions of the board of an enviro-qunago, lining up half a dozen on multi-hundred thousand salaries and asking what they actually did/do for the money.

With a raft of eco-measures coming that might make the Olympics pale in financial comparison, we seem to have an entrenched, self-serving, barely accountable 'fat cat' culture of 'jobs for the old boys club' that is a major concern.