Sky News: Olympics To Boost Builders' Fees

The London Olympics is set to raise building fees in England by nearly £4bn, it has been claimed.

Construction inflation is one of the biggest "hidden costs" of the London Games and it is set to soar by 2012, according to the Taxpayers' Alliance.

A massive injection of public money saw bulldozers start to clear the Olympic Park site in Stratford, east London, last month.

Construction inflation in London and the South East could increase the cost of new public buildings, like city academies and GP surgeries, according to the alliance.

It could also boost fees for new private housing, making affordability even worse for first time buyers.

The increases might also make new social housing more expensive in every London borough, it was claimed.

Construction and regeneration costs for the Olympic Delivery Authority now stand at £5.3bn.

The lobby group said the huge demand for builders this represents will have knock-on effects in the wider construction industry, pushing up construction inflation each year until the Games.

For new construction orders in this region, which are expected to reach well in excess of £10bn by 2012, this will mean substantially higher prices for buyers.

If the Olympics adds 1.25% to construction inflation each year between now and 2012, the increased cost of building orders that can be linked to the London Olympics will reach £3.9bn.

The alliance's Matthew Sinclair said: "Increasing the cost of construction in London and the South East is not only hazardous to the health of the British economy but also imperils the objective of getting enough new homes built to make things easier for first-time buyers.

"The bigger the bill for the Olympics becomes, the more damaging this knock-on hidden cost will be."