Commonwealth Games 2014 Progress report 2: Planning for the delivery of the XXth Games Prepared for the Auditor General for Scotland and the Accounts Commission March 2012 Auditor General for Scotland The Auditor General for Scotland is the Parliament’s watchdog for helping to ensure propriety and value for money in the spending of public funds. He is responsible for investigating whether public spending bodies achieve the best possible value for money and adhere to the highest standards of financial management. He is independent and not subject to the control of any member of the Scottish Government or the Parliament. The Auditor General is responsible for securing the audit of the Scottish Government and most other public sector bodies except local authorities and fire and police boards. The following bodies fall within the remit of the Auditor General: • directorates of the Scottish Government • government agencies, eg the Scottish Prison Service, Historic Scotland • NHS bodies • further education colleges • Scottish Water • NDPBs and others, eg Scottish Enterprise. The Accounts Commission The Accounts Commission is a statutory, independent body which, through the audit process, requests local authorities in Scotland to achieve the highest standards of financial stewardship and the economic, efficient and effective use of their resources. The Commission has four main responsibilities: • securing the external audit, including the audit of Best Value and Community Planning • following up issues of concern identified through the audit, to ensure satisfactory resolutions • carrying out national performance studies to improve economy, efficiency and effectiveness in local government • issuing an annual direction to local authorities which sets out the range of performance information they are required to publish. The Commission secures the audit of 32 councils and 45 joint boards and committees (including police and fire and rescue services). Audit Scotland is a statutory body set up in April 2000 under the Public Finance and Accountability (Scotland) Act 2000. It provides services to the Auditor General for Scotland and the Accounts Commission. Together they ensure that the Scottish Government and public sector bodies in Scotland are held to account for the proper, efficient and effective use of public funds. Commonwealth Games 2014 1 Contents Summary Part 2. Delivering the Games on Part 3. Progress in planning for a Page 2 budget legacy Page 13 Page 24 Introduction Page 3 Key messages Key messages About the audit There is inherent uncertainty in the The Scottish Government and budget as would be expected at Glasgow City Council have Key messages this stage developed legacy plans for the Page 5 Page 14 Games Key recommendations The strategic partners are Performance monitoring and Page 6 committed to delivering the Games evaluation need further work within the £524 million budget to demonstrate a return on Part 1. Progress in planning for the including inflation investment Games Page 25 Page 7 There is a risk that the Games security budget is insufficient The current economic climate may Key messages Page 16 affect wider investment in legacy Planning for the Games was on Income targets are challenging in Recommendations track at November 2011 the current economic climate but so Page 30 far good progress has been made Police and other city-wide security Page 17 Part 4. Governance planning is progressing well but Page 31 more work is needed on venue Games venues were forecast to be security arrangements delivered within approved budgets Key messages Page 8 at November 2011 Page 18 The high-level governance structure The Organising Committee now is clear needs to increase its staff capacity The public sector contribution to Page 32 to remain on track the Athletes’ Village has increased The strategic partners continue to At November 2011, venues and The Games will have additional improve their risk-management other infrastructure were forecast to costs to the wider public sector arrangements be ready in time for the Games Page 22 Page 9 Recommendations Recommendations Page 34 The partners are developing Page 23 an overall programme plan Appendix 1. Project advisory showing the links between the key group members milestones Page 35 Recommendations Appendix 2. Partners’ progress Page 12 against previous recommendations Page 36 Appendix 3. Methodology Page 38 2 Summary Glasgow will host the XXth Commonwealth Games from 23 July to 3 August 2014. Summary 3 Introduction delivery partners. While not a progress report, we highlighted a risk strategic partner, the Commonwealth that the £373 million budget may not 1. Glasgow will host the Games Federation has some be sufficient to deliver the approved Commonwealth Games 2014 (the specific responsibilities. Other Games plans and it did not include an Games) from 23 July to 3 August organisations, such as Strathclyde allowance for inflation. In November 2014. The Games are a major event Police, are also contributing to the 2009, the same week that we for Scotland and affect its international delivery of the Games. published our 2009 progress report, profile and reputation. They are the Organising Committee announced expected to provide significant 3. In November 2009, we published a budget increase of £81 million benefits to the Scottish population, our first report on the strategic (at 2007 prices). The Organising including contributing to economic partners’ progress in planning for the Committee subsequently restated the growth and improved health Games.3 Our report found that the budget to £524 million in its 2010/11 outcomes. However, the Games strategic partners had made progress business plan, published in May 2010, also involve significant amounts of in establishing their governance to include an allowance for inflation public money. The decision to bid arrangements, although some areas (Exhibit 1, overleaf).6, 7 and being awarded the right to host needed more work. The report them happened before the economic highlighted that, at that time, all 5. The Games budget remains at recession and the resulting squeeze venues, the Athletes’ Village and £524 million in cash terms.8 The on public sector budgets so it is now Games-related transport infrastructure core budget includes: £235 million even more important that the public projects were forecast to be delivered for the cost of providing some money invested in the Games is on time. However, it identified that venues and services for the Games; being spent properly and delivers the some capital projects presented a risk £129 million for supporting services intended benefits. and needed to be closely monitored. such as technology, marketing and The report included recommendations communications; £65 million for 2. Four strategic partners are to enable the strategic and delivery Games staff and volunteers; and a responsible for planning the Games: partners to improve their governance, further £95 million is reserved for the Scottish Government, Glasgow project and financial management contingency. By November 2011, only City Council, Glasgow 2014 Ltd arrangements to deliver the Games 17 per cent of the budget had been (the Organising Committee) and on time and within budget. The spent or committed but spending is Commonwealth Games Scotland.1 Scottish Parliament’s Public Audit forecast to grow significantly over the In November 2007, these partners Committee (PAC) subsequently three years 2012/13 to 2014/15. signed a contract with the published its own report, including Commonwealth Games Federation recommendations on planning 6. The Scottish Government and to deliver the Games to an agreed for the Games, focusing on the Glasgow City Council are the standard. They also signed a Minute costs and risk management.4 Our main funding parties, contributing of Agreement in June 2008, which audit work has identified that 17 of around 81 per cent of the overall binds the partners to work together the recommendations have been Games budget. The Organising to deliver the Games and to fulfil completed, seven are in progress and Committee is responsible for raising their respective responsibilities.2 The one was not accepted. the remaining 19 per cent of the strategic partners have set up the budget through income from private Glasgow 2014 Strategic Group as the The Games budget was revised to sources, including broadcasting main mechanism for achieving this. £524 million in May 2010 rights, ticketing, sponsorship Commonwealth Games Scotland 4. The Scottish Parliament approved and merchandising. The Scottish is the host Commonwealth Games the Organising Committee’s Games Government and Glasgow City association for the Games, and the budget of £373 million (at 2007 Council have agreed to cover any other three bodies are the main prices) in January 2008.5 In our first potential shortfall of income on an 1 Glasgow 2014 Ltd, otherwise known as the Organising Committee, is a company limited by guarantee which was set up solely to plan and deliver the Games. The Organising Committee’s board of directors is chaired by an independent board member. Other members of the board include representatives from the three strategic partners, an athlete representative and four other independent members. 2 Minute of Agreement among the Commonwealth Games Council Scotland, Scottish Government Ministers, Glasgow City Council and Glasgow 2014 Limited, 2008. 3 Commonwealth Games 2014: Progress report on planning for the delivery of the XXth Games, Audit Scotland, 2009. 4 Progress on planning for the delivery of the Commonwealth Games 2014, 8th report, 2010 (session 3), Scottish Parliament Public Audit Committee, October 2010. 5 Report on the Financial Memorandum of the Glasgow Commonwealth Games Bill, Scottish Parliament Finance Committee, January 2008. 6 Glasgow 2014 Annual Business Plan 2010/11, Glasgow 2014 Ltd, 2011. The revised budget was approved by the Strategic Group. The revised budget comprises a core budget, an operational contingency and a special reserve contingency. The budget increase was mainly due to increases in broadcasting costs and contingency allowances. 7 Inflation was calculated using the GDP index in December 2009.