Olympic Games CFO hails "the greatest show on Earth"
Neil Wood, CFO of London Organising Committee of the Olympic Games, Locog
When your fellow board members include HRH The Princess Royal, athletics legend Sebastian Coe and former sports minister Lord Moynihan, it's clear you are not involved in any old run-of-the-mill project.
And ‘run-of-the-mill’ is certainly not a description that readily springs to mind, particularly when discovering the considerable effort that is going in to putting on the sporting extravaganza that is the 2012 Olympic and Paralympic Games.
With just over a year to go Neil Wood, the chief financial officer of the London Organising Committee of the Olympic Games (Locog), can certainly testify to this. He has been CFO and board member of Locog since its inception in 2005. Prior to that he was the finance director of London’s successful bid to host the 2012 Games.
“Being a part of the successful bid to host the Games and then to be helping to put on the event is an amazing privilege,” says Wood, who is also a partner at the accountancy firm Deloitte.
Wood is clearly thrilled his employer gave him the chance to put his name forward. Naturally Deloitte benefits too as the official professional services provider to Locog, a privately run company responsible for preparing and staging next year’s Olympic Games. Still, Wood proved it is not just top athletes that win gold medals after being awarded an MBE in the 2006 New Year's Honours list for his services to the London 2012 bid.
The CFO’s job is to make sure Locog meets its aim of breaking even - a task he confidently predicts will be accomplished. Wood maintains that since Locog’s £2 billion budget was determined in early 2006 planning has never deviated. From day one in the role, he made his mark on the financial controls by ensuring nobody could spend money without the CFO or other senior management signing off on the spend, and the thresholds have been kept low. The results appear to be paying off.
“We are on track to raise over £2 billion from the private sector to fund the games - a remarkable achievement given the economic climate that we have operated in,” he says.
“Our core operating budget to stage the Games is circa £2 billion, which is privately funded. This covers most of the operational requirements of staging the games, such as temporary infrastructure or technology for broadcasting, etc.
“We have recently reviewed with the government those additional areas where we are best placed to deliver operationally and have taken on this additional scope and associated funding, for areas such as venue security.
Avoiding a profit
Locog’s goal, Wood explains, is to keep expenditure “within the envelope of our available revenues” while delivering Games to remember. Wood has always maintained that the company would operate within a balanced budget and to fulfill that goal the board has carried out budgeting rounds every year since. They will start version five of the budgeting round this October and every one of them has arrived at the £2 billion revenue versus £2 billion expenditure equation, he confidently says.
Despite his confidence though, Locog and fellow delivery bodies have been asked by the National Audit Office to resolve uncertainties over scope and budgetary responsibilities before its next budget and come up with a contingency figure in the event it should be required. No figure has yet been confirmed.
Roughly one quarter of Locog’s income will come in the form of ticket sales. The six-week window to buy tickets was extended earlier this year after a surge of demand crashed the 2012 website and the target has been upgraded from £441 million to £500 million.
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