Figures also published today show that cost savings and good management across the project mean the final anticipated cost of the ODA’s spend on the programme has fallen by £179m.
The developers Lend Lease did offer a deal to fund the Village. However, because the economic climate has worsened considerably since last summer, ministers have decided that the deal is not in the best interests of the taxpayer and that it would cost more public money in the long term.
With the Village now publicly owned, the public sector will receive returns from unit sales after the Games. All of the additional £324m being invested today is expected to be returned after the Games when the units are sold to provide new homes for Londoners.
As market conditions improve, the ODA will seek private investment for the Village, which will mean the taxpayer will get a better return on the investment.
Olympics Minister Tessa Jowell said: ‘After careful assessment it is clear that investing in the Olympic Village now will save public money in the long term.
‘A private sector deal was available, but because of the credit crunch it was not a good deal. The ODA will make a fresh assessment of the market nearer to completion with a view to pursuing deals with other possible investors.’
Olympic Delivery Authority Chairman John Armitt said: ‘The Olympic Village will be high-quality development, providing much needed new housing for east London and capable of delivering significant returns to the taxpayer after the Games.
‘The majority of contingency used to date has been for projects affected by the economic downturn – the Village and the IBC/MPC. Contingency required for other projects has been more than offset by savings elsewhere.’
It was also confirmed today that £268m will be invested in the Village through a deal with Triathlon Homes for the number of units which will become affordable housing after the Games. Full funding for the Village has now been secured.