Hugh sets out the impact of the Olympics for Kent

When The Kent Messenger asked me to write an article about The London 2012 Olympic Games, they wanted me to answer two questions. Firstly, what is happening over the Olympic budget and, secondly, what does hosting The Olympic Games mean for Kent?

The first thing to understand about the Olympic budget is that it is not just one budget but three. The first of these budgets is a regeneration budget, originally set at £1.044bn, funded by The Exchequer from general taxation. It was largely composed of money set aside for the regeneration of the Lower Lea Valley.

The second budget was for construction, originally set at £2.375bn, funded by The National Lottery, the London Council Tax payer and the London Development Agency. This money will to be used to build the Olympic Park.

The third budget is the operating budget or the money needed to stage The Games. This was set at £2bn and is raised from the private sector, the IOC (from their share of broadcasting revenue and sponsorship) and from ticketing and merchandising gained from The Games itself. This is, therefore, money entirely raised from the private sector and is not a budget that is currently causing any concern.

The current controversy, therefore, centres on the first and second budgets. During her recent appearance in front of the DCMS Select Committee, Tessa Jowell revealed that the construction budget had risen from £2.375bn to £3.3bn principally due to the decision to appoint a delivery partner costing £400m. Given that the government must have considered at an early stage whether this function was best carried out by the private sector or the Olympic Delivery Authority, it is extraordinarily incompetent not to have factored it in at the time of the bid.

However, bigger problems remain unresolved for which the government is entirely to blame. There is controversy over whether the regeneration and construction budgets will be subject to VAT and what level of project contingency will be applied. Ken Livingstone has suggested that The Chancellor is holding out for 60%. Again, both of these issues were entirely predictable at the time of the bid and should have been added to the original budget. When you add in the likely costs of security, budgeted at £190m but likely to cost £1bn, and an underestimate for building cost inflation it is clear that these are not going to be cheap games!

The sad thing about this whole chapter is that there are many people, myself included, who supported the bid to stage the 2012 Olympics, and wish to continue to support The Games, but whose confidence in the whole process is being eroded by a government that seems to be financially illiterate about their delivery.

On the second question, Kent has the potential to benefit enormously from the county’s proximity to the 2012 Olympics – although we are handicapped by the requirement to operate within the straitjacket of a ridiculous regional structure. I hope that Kent will become a destination of choice for training camps and for post competition leave. Given our closeness to the Stratford site, I expect a significant number of Kent businesses to win contracts to service the Games and hope that Kent people, both young and old, will take the opportunity to act as Olympic volunteers. The Games needs 70,000 volunteers - many of which should come from Kent.

Finally, and most importantly, it is vital that we will honour the key commitment we made to the international community when we won the right to host the Games – namely to enable young people through sport – something that will benefit everyone living in Kent.

If hosting The Olympics leads to a regeneration of sport in this country and makes people happier, healthier and better integrated than we will be able to look back on this project with pride. If it simply leads to a set of empty stadia in the East End of London, however smart, we will have missed a once in a lifetime opportunity.