Well, what do you want to do now. Laugh or cry?
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.
16% per year over 15 years? Does no one understand compound interest? £100 now at that rate is £925 in 15 years time. They\’ve seriously based their budgets on the thought that land prices will be ten times higher then than they are now?
Is it too late to call Paris?