London Olympic land 'over budget'

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Securing land for the 2012 Olympics has cost more than expected, the London Development Agency (LDA) has admitted.

The LDA, the mayor's business and economic agency, had a £1.1bn budget to buy the east London site and relocate its original residents and businesses.

The LDA's director of strategy Andrew Travers told London Assembly that he has called in accountants as he expects "figures will exceed the budget."

He said the excess will be recouped by "trimming" other LDA projects.

Mr Travers' questioning at City Hall comes after reports of KPMG auditors finding a funding gap of £60m to £100m in the LDA budget.

Two senior members of staff were suspended from the Olympic Legacy Directorate (OLD), a department within the LDA, following the discovery.

The LDA had to pay more than 3,000 businesses and individuals to buy land for the 2012 site in Stratford through compulsory purchase orders but has insisted there is no evidence of wrongdoing.

'Agent's fees'

Mr Travers said the process was "complex" and that KPMG had been called in to investigate the accounts and make recommendations.

Appearing before the Budget Monitoring Sub-Committee Mr Travers said: "It is the case that the figures will exceed the budget we have previously set aside.

"It is the case that more money was spent on fees in 2008-2009 than envisioned.

"As a consequence of the commitment to be resolved as we move forward over the next couple of years, we will incur agent's fees - that will be part of the equation."

On the cuts to projects Mr Travers said: "I think we are determined to make sure that there is minimal impact on LDA projects, particularly the core programmes and including the delivery of legacy."

Projects for 2009-2010 have already been reviewed and although he did not specify the projects in danger of being axed he said the LDA will look at projects which were "relatively poor value for money".

Accountants will report their findings to the LDA at the end of July.