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London Olympics 2012 - some thoughts

The IOC announced at lunchtime today that London has won its bid to host the 2012 Olympics, to rapturous applause and celebrations in Trafalgar square. The Olympics is coming, together with an enormous investment in the future of sport and a spectacular regeneration of East London.

My initial reaction was that this was good news; already I am looking forward to taking my daughters (who will by then be aged 10 and 8) to see the gymnastics, or athletics, or maybe the sumo (hey, I’m not going to limit their sporting ambitions!)

But on closer inspection, the details of the UK Olympic committee’s (and the government’s) plans reveal some alarming facts.

Robbing Peter to pay Paul

Preparing the capital to welcome the five-ring circus to town is currently estimated to cost £2.4 billion between now and 2012, the bulk of which is to come from – guess where? – the National Lottery, which will contribute around £1.5 billion of the money that is apparently supposed to be spent on our good causes.

Aside from breaching the government’s promise not to use Lottery cash to fund schemes which should be funded through general taxation, this will also inevitably mean that there is less money available for charitable organisations to bid for – organisations like Hackney Community Transport, who run community buses to places that the commercial operators now judge to be ‘unprofitable’. Unfortunately, those community buses will not be able to run to Newham (where the Games will be held) as they cannot afford the increased rental prices for garage space in the area, a situation mirrored across the area to be affected by the supposed ‘regeneration’ brought by the Games. As rents increase, locals in the areas are forced out in favour of more affluent residents, and the deprivation is simply moved to another area with no improvement to anybody’s situation… apart from the construction firms, of course.

In May 2004, a cross-party committee of MPs said that the appropriation of lottery funds is “a straightforward raid” on lottery funds for projects outside of London.

Negative economic effect

Promises have been made during the build-up to the bid about the economic regeneration that will derive from the event. 3,000 new jobs and 4,000 new homes are figures that have been bandied about – unfortunately previous ‘regeneration’ promises (Canary Wharf, the Millenium Dome) have proved to be false.

Sports, Jobs and Taxes: Economic Impact of Sports Teams and Facilities by Roger Noll and Andrew Zimbalist of Stanford University has this to say about the likely effects of investment in sports stadia (paraphrased):

...a new sports facility has an extremely small (perhaps even negative) effect on overall economic activity and employment. Stadia rarely earn anything approaching a reasonable return on investment and sports facilities attract neither tourists nor new industry … substituting spending on sports for other recreational spending concentrates income, reduces the total number of jobs, and replaces full-time jobs with low-wage, part-time jobs.

Doing it for the kids

An oft-quoted justification for a London Games is that it is an investment in the future of our country’s youth, who will apparently be filled with fervour to take up sport, presumably to Olympic standard.

But the Department of Culture, Media and Sport has admitted that £340 million is going to be diverted from existing sports lottery distributors to pay for the Games! Unless you’re one of those lucky few kids living in East London (well, those whose parents can afford the rent hike and council tax hike levied to pay for the whole thing), there will actually be less investment in local and regional sports infrastructure during the next seven years.

Counting the cost

Of course, none of these figures are set in stone. If £2.4 billion sounds like more than enough to put on the greatest sporting event in the world, you might like to consider that Sydney (2000) ended up costing more than twice the pre-bid estimate; Athens (2004) is likely to cost as much as four times their initial budget!

Yes, it will be an incredible spectacle, and I am glad that the UK is hosting a Games in my lifetime. But are the social and economic impacts worth it?

Filed under: General.

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