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London 2012: Olympics legacy hard to define

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David Bond | 11:42 UK time, Friday, 13 July 2012

How much will the Olympics be worth?

Over the last week or so there has been a variety of forecasts trying to assess the economic boost London and the UK will get from staging the Games.

This always happens before every major sporting event and it should come as no surprise that the Prime Minister David Cameron should want to try and offset the argument about the costs of the Games by talking up the benefits.

He claimed last week the number would be £13bn, outweighing the public sector funding package of £9.3bn. Incidentally according to the very latest figures, it looks like coming in at just under £9bn.

It all sounds very impressive. Until you start to look at the numbers more closely.

Much of it is aspirational rather than definitive. While the PM says he is "confident", there can't be any certainty that these figures will actually be achieved.

The analysis was done by economists at the department for UK Trade and Industry (UKTI). Here's how they account for the majority of the £13bn:

*£1bn from UK business conferences to be held during the Games
*£6bn of foreign direct investment after 2012
*£4bn of opportunities for British businesses from Embassy summits after the Games
*£2.3bn from tourism generated by tourists coming to the UK between 2011 and 2015

UKTI says it has looked at past Olympic hosts and come up with the numbers based on the methods they always use when assessing the impact of government business conferences and summits.

The Olympic Park in Stratford is primed for the opening ceremony which is less than two weeks away.

The Government is planning to use the Games to try to showcase British business and will host a huge networking conference centre at Lancaster House.

The hope is that with so many business leaders and sponsors in town for the Games, British business will secure a big windfall.

Others seem less certain. Jeremy Hunt, the Secretary of State responsible for the Olympics, says the PM had set the country a target but that it couldn't be banked quite yet.

Meanwhile John Armitt, the chairman of the Olympic Delivery Authority, has done his own study on the economic legacy and says: "You will never know the scale of those benefits."

Economists at investment bank Goldman Sachs seem to agree with him, refusing to put a number on the potential uplift from the Olympics.

All of which is not to say there won't be benefits. There are bound to be.

It's simply that the case for the Olympics delivering a huge boost to the host's economy is far from proven and we should be cautious of those who claim so definitively that it does.

------------------------

With the Olympi-shambles over security still rumbling on, it is probably worth reflecting that there are organisers and officials I have spoken to who believe the deployment of more members of the military in venues is a good thing.

Judging by G4S's failure to hire and train the 10,400 staff they had promised to deliver, there were concerns about the level of quality.

"We would rather have the armed forces involved than G4S scrape the bottom of the barrel," one source told me.

One knock-on effect from the deployment of more members of the military has been felt by the organisers of the London Olympic marathons.

The company which stages the hugely popular London Marathon each April traditionally use the armed forces as stewards to line the 26-mile route.

They assumed the same thing would happen during the Games - except they found out with a month to go that the military being needed by London Organising Committee of the Olympic and Paralympic Games (Locog) elsewhere there wasn't enough to go around.

With such a lot of road to cover and fans free to turn up and watch without tickets, another private firm (not G4S) has been recruited to provide the 600 stewards required.

------------------------

Up to 30,000 more Olympic tickets are likely to go on sale to the public in the coming days after Locog's short break partner Thomas Cook returned a large batch of unsold seats -including some for the most sought after events.

The lower-end tickets and hotel deals have sold well but some of the more expensive packages have not. Thomas Cook's website was today offering deals for the best tickets to the opening ceremony plus a five-star hotel for an eye-watering £5999.

Unable to shift those types of high end tickets, they have now been returned to the Locog system.

Worryingly ticket holders were sent an email by Locog yesterday telling them to expect a very important message. Failure to read it could result in you missing your event, it warned. Almost 24 hours later however, nothing has arrived. What could have been so
serious?

Comments

  • Comment number 1.

    Perhaps the so-called "very important message" was the email detailing various rules and regulations for entering the venues?

  • Comment number 2.

    Surely you need to give a value to the new transport, sporting and leisure infrastructure as well?! not to mention the added land values to areas around the park.

  • Comment number 3.

    How's this for poor organisation then ....

    I was sent THE WRONG tickets three weeks ago and, after getting through to 2012 customer services was asked to post them back and the correct tickets issued immediately .... I'm still waiting!!

    Now I can't get through on the cusomer services line at all and seemingly have no way of actually talking to anyone.

    By the way, I got in touch (by post) with the person who's tickets I was mistakenly sent and they got the wrong ones too ... I wonder how far the trail leads?!!

    BBC Consumer programmes, if you want to talk to me I'm very happy to oblige!!

  • Comment number 4.

    3. At 13:42 13th Jul 2012, Julian Cope wrote:
    ---------------
    Whilst you must be disappointed surely you must understand that mistakes happen? is this not why pencils have rubbers on the end?

  • Comment number 5.

    The only legacy will be for anyone working in advertising as they will have to replace near enough EVERY advert on TV/Radio/Billboards after the games due to over saturation of the olympics!

  • Comment number 6.

    The figures to justify any benefits are just dreamed up and have no base in fact i doubt they'll be doing a proper audit in future because there won't be any real benefit.

    I doubt there is any value in the transport and sporting infrastructure simply because they benefit a tiny part of London. Also while massive investment is being made in a 4 week sporting event, facilities across the rest of the country are closing at there at an alarming rate. One swimming pool and what'll be the most soulless football stadium in the country won't make up for that.

    The whole Olympic ethos has been lost in the great corporate sell-off to the likes of Macdonalds, Coca Cola and Dow chemicals and the IOC demanding transport lanes and Tax breaks. The whole thing stinks of a great corporate and politcal beeno as far from the original Olympic ideals as you can get.

  • Comment number 7.

    It's not true to say that the important message has not been received as, I for one, did receive it. It wasn't very important though! It was just about the dos and don'ts, such as size of bag and what you can't take into venues. The initial message was scaremongering in my opinion.

  • Comment number 8.

    At 4: But surely the amount of money people have paid and the fiasco they went through to get the tickets entitles them to getting their tickets on time with out any problems.

  • Comment number 9.

    When did the Olympics cease to be about sport? I only ask because many seem to think the roads and buildings are more important than the memories of seeing the athletes competing. Sad isn't it?

  • Comment number 10.

    what people dont seem to understand about this mass expenditure is the word "investment"

  • Comment number 11.

    Were the tickets you actually got better than the ones you should have got, Julian? If so I'd have just kept schtum and gone!!

  • Comment number 12.

    5. At 14:40 13th Jul 2012, the_pony_tail_of_andy_carroll wrote:
    The only legacy will be for anyone working in advertising as they will have to replace near enough EVERY advert on TV/Radio/Billboards after the games due to over saturation of the olympics!
    --------------------------------------------------------------------------------

    That would be done anyway. Just like it is every few weeks.

  • Comment number 13.

    How's this for legacy and encouraging sport at grass roots level. The Olympics commandeered our gym in mid-January and have it until mid-September. We got less than two weeks notice of the change and have not found a replacement venue for our weekly for 5-a-side. The gym is also of a centre of excellence for basketball with some students representing England etc. and they were also kicked out. To rub it in we discovered the gym is being used to train car parking attendants! [indoors?]

  • Comment number 14.

    It seems that the only way to get things past the myopic members of the various political committees that sanction such things is to talk about legacy, ROI and long term benefits. Why is it such a sin just to enjoy the moment ? Celebrate the honour and excitement of hosting such a marvellous event. Apart from anything else we need a bit of a party to help drag us out of the recession. Furthermore it is a service that we provide for the rest of the world, not just ourselves and the rest of the world will remember our generosity.
    Cameron needs to put all of the complainers back in their respective boxes and say let's all have a good time - it is a celebration of sport first and foremost and it is evidence that this is still a great country. The feel good factor from the games should be significant, and that is worth every penny.

  • Comment number 15.

    It's all the little stories, like the nonsense over using the Olympic rings in another article today, and what Creativo relates above in no.13, that show how crazy this is. Trampling on the little people is what the Olympics has become. Very sad.
    Would be interesting to know how much the big sponsors are making. I'm sure they'll all do a lot better than London and the people who really have paid for it all.

  • Comment number 16.

    The Russians are coming - and it could hardly be a "Great Games" (geddit?) without them! For a detailed low-down on Russia and Kazakhstan, by someone who walked part of the way across them for charity last year:

    http://www.only9sixty.blogspot.com

  • Comment number 17.

    The legacy of the olympics? What Olympics, I thought it was a military build up with a view to playing some war games in London. Thats the legacy of these olympics, they will be dubbed "The War Games".

    Rumour has it that the 4x400m relay team will be a squad of undercover SAS troopers, and the Javelin throwers will be throwing Trident missles.

  • Comment number 18.

    When factoring in the cost to the country for hosting the Olympics, have the costs of the inevitable congestion been calculated ?

    If you're not going to the Olympics, would you want to travel for a trip to London?
    The struggle that companies face with the extra long journies faced by staff, and the delays in deliveries of goods.

    And woe betide anyone who requires the attendance of our emergency services.

    Boris and Lord Coe may pooh pooh us prophets of doom, but we all know the tail backs caused by just one lane being closed.

    For many Londoners the worry of how to travel to work has overtaken any excitement of the Games coming to London.

    One last point will G4S be fined for not fulfilling their contract ?

  • Comment number 19.

    The cost of the Olympics?

    The main cost to me personally is that the Community Shield has been moved to Villa Park - and only 13,600 approx tickets assigned to each team. (32% each team, yet 36% to corporates and partners?)

    As a season ticket holder I am unlikely to be able to get a ticket!

  • Comment number 20.

    The mind boggling commercialism coupled with the security necessary to hopefully prevent a disaster would be beyond the comprehension of the 1948 real amateur athletes. And the "legacy" well....I live in Spain where we have "la crisis" but it may be London's turn next. Sorry to be negative but are UK bookies taking bets yet on who will be the first drug-test failure?

  • Comment number 21.

    In answer to 4, yes, I accept mistakes happen - we all make them. But it's how you put them right that matters ... so far, so very bad I'm afraid .. and impossible to find anyone to speak to!!

    In answer to 11, no they were wrong event and were 2 tickets instead of the 4 I have ordered and paid for!!

    I actually support the Olympics and can't be doing with anti-Olympic talk .. bet over yourselves. But that doesn't mean I can't grumble about poor customer service

  • Comment number 22.

    The best estimate for the Sydney Olympics was that there was a short-term boost of 0.2 per cent to New South Wales' gross state product. This was off-set by losses in other states as overseas tourists focussed on Sydney. There are no identified long-term benefits. Sydney is generally regarded as being one of the most successful games. In general, large sporting events such as the Olympics have high net costs.

    Any assessment of the London Games needs to take account of the opportunity cost. If economic benefits from the Games are identified (and the list looks dodgy. Spending 13 bn to generate a possible 6 bn in foreign investment? Cutting business tax by 13 bn would have been better), the question remains: would alternative uses of the resources, including tax cuts, have generated a higher return?

    4 bn of "business opportunities" is not 4 bn. What will actually eventuate? To what extent is it related to the Games - business will only invest if it is profitable, how will the Games affect the profitability of ongoing ventures?

    It's always best to take such assessments with a pinch of salt. The Olympics are hosted for a variety of reasons, notably the self-aggrandisement of the ruling hierarchy, and not primarily for good economic reasons.

  • Comment number 23.

    I've got to say well done all who have commented so far. Not one comment slagging off the journalist. What a refreshing change.

    As for the Olympics I've got lower priced tickets to a couple of events and I'm going to do my best to enjoy what will be a once in a life time experience.

    If you don't like the rampant commercialism of the world today start your own political party and pursuade me to vote for you. I suspect there are millions who would like to hear what the workable alternative is.

  • Comment number 24.

    @ 9 "When did the Olympics cease to be about sport?" As a schoolboy in 1960, from a poor fatherless family and dependent on my paper-round money, I was able to go the Rome Olympics (by motorbike, sleeping out) and see two days of top athletics finals. Everyone there seemed to be a genuine athletics fan, there was no razzmatazz. Now the Olympics is a big "Event," attracting "big eventers" as well as sports fans, and an opportunity for pollies and celebs. But I'm not sure when the change occurred.

  • Comment number 25.

    The legacy will be lots of rich people getting richer while the rest of us get screwed.

    A fitting legacy for Britain in 2012.

  • Comment number 26.

    I'd love to know how the idea of an Olympics leads to a boost for the host country's economy squares with the economic legacy of Athens 2004? Now *there* is a subject our betters don't want to talk about!

    As for the politicians, we can excuse the PM. Poor old CaMORON is just reading out what he's told to, as usual.

  • Comment number 27.

    One unwanted legacy that will stain 2012 in the eyes of London’s populous Turkish Cypriot community will be the fact that none of their sportsmen and women has been permitted to participate in the 2012 Olympics. Despite a late push by a few of their Turkish Cypriot Taekwondo people the IOC did not even have the courtesy to respond to a letter sent by them asking that they be given the right to perform under the neutral Olympic flag. The political situation in Cyprus is still very sensitive but it can’t be right to deny our sportsmen and women the opportunity to strive for sporting excellence and under an inclusive banner – surely this goes against the grain of what the Olympics are supposed to stand for?

    The injustice seems to appear even more acute when one considers that Turkish Cypriots voted to reunify the island under a successfully negotiated Kofi Annan plan in 2004 (which both Cypriot leaders helped to draw up – but the Greek Cypriot government changed their mind when they knew their Turkish Cypriot counterparts were going to vote for it! Greek Cyprus was subsequently granted EU accession and Turkish Cypriots stayed in the political wilderness, despite international promises to lift the embargoes on the Turkish Cypriots).

    I went to North Cyprus and saw our Taekwondo team train earlier in the year and we definitely have medal potential. Alas, the opportunity will not present itself in London 2012 and this both saddens me and also makes me very angry. It would be wonderful if the BBC could help us to ensure that if we can’t get through for London 2012 maybe we can look forward to the participation of Turkish Cypriots in the 2016 Rio Olympics. Turkish Cypriots can dream.

    Fevzi Hussein
    Embargoed!

  • Comment number 28.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 29.

    The legacy for any Olympics is (are) not hard to define at all.

    The benefits are the easiest of all to define; for the public, there aren't any. The Olympics only benefit the following groups, (not necessarily in this order):
    1. Developers who, following a time honoured recipe, charge outrageous prices for substandard work and then, by delaying completion of the projects until close to the games are able to force the games organizers to ante up obscene additional amounts.
    2. The various National Olympic Organizations who skim off huge amounts of money from television and other media.
    3. Politicians who are front and centre in photo opportunities and of course recipients of the best seats at the best events.
    4. The athletes...enough said.

    Now for the downside:
    1. Costs. Is it any surprise to anyone that the costs of the London Olympics will be at least 4 times as much as the original estimate, which itself was a mouth watering 4 to 5 BILLION. Notwithstanding the fact that the Olympics are awarded to a city, does anyone doubt that the British public generally will end up paying for the inevitable games deficits.
    2. Facilities. The facilities built for the games will decline quickly into general disuse. No matter what the games proponents assert, one just has to look at the Olympic villages at other sites. Montreal, Barcelona, Beijing...the list goes on and on.
    3. Disruption to normal life. The chaos during construction of games facilities was bad enough. The chaos during the games themselves will be much worse although, thankfully, somewhat shorter. Civil rights will be unmercifully trampled on in the name of 'security'.

    Eventually the public must smarten up and just ignore the corrupt shell games that constitute the awarding of the games. The only reasonable answer is for the Olympic Games to be held in the same place every time. The logical place for the summer games is of course Greece and for the winter games a less obvious but equally smart venue, Switzerland.

  • Comment number 30.

    Why are we looking to make a profit off the Olympics? We should do our part and put on the best show we can. Everyone is wanting to tune in to a well run and polished event, they don't care if Britain is a good place for business.

  • Comment number 31.

    Im not worried about the overspend by the country im worried about the BBC and its Olympics or bust attitude that has been prevalent since the announcement that London would host 2012 , the sheer scale of BBC hype has been appaling and quality sports coverage over the long term has been compromised to fund a few weeks of running and jumping that no-one in my circle of friends has even mentioned in conversation lately .

  • Comment number 32.

    @ 19
    At 18:41 13th Jul 2012, Mancun Ian wrote:


    The cost of the Olympics?

    The main cost to me personally is that the Community Shield has been moved to Villa Park - and only 13,600 approx tickets assigned to each team. (32% each team, yet 36% to corporates and partners?)

    As a season ticket holder I am unlikely to be able to get a ticket!
    ----------------------------------------------------------------------------------------------

    I was at the Community Shield game at Wembley in 2011, and the seats allocated to the blue 'half' of Manchester in the upper tiers were empty.

    13,600 at Villa Park should be plenty for Citeh fans.

    Unless of course, Sheik Yamoneymaker brings his harem of wives along.

  • Comment number 33.

    There has been a great deal of research on the economic benefits of hosting major sports events. My overall conclusion from reading a great deal of this research is that while there is certainly a short term boost to the economy through hosting major sports events, in the long run, there is no evidence to suggest a positive economic legacy.

  • Comment number 34.

    HELP UK TO FIGHT AGAINST OTHER COUNTRYES
    http: //www .erepublik. com/en/referrer/ARGUS+MASTER
    JUST CONNECT THE EMPTY PLACES IN THE LINK

  • Comment number 35.

    "David Bond is the BBC's sports editor. He covers the biggest sporting events and stories in the world. With a huge book of contacts, he speaks to the most important movers and shakers in sport, and shares the results in his frequently updated blog."

    -------------------------------------------------------------------

    And yet "the biggest sporting stories in the world" this week apparently don't include John Terry being found not guilty because the judge reckoned he couldn't be sure that the words everyone admits he used were meant as an insult.

  • Comment number 36.

    So the first positive drugs case of the Olympics has been revealed and Debbie Dunn the American 400m runner has withdrawn from the Games. Sadly this has now become a prominent feature in the athletics world and already I am casting my eyes around and looking at certain athletes and wondering how they have managed to improve their performances by so much in such little time. The recent suspension of 3 prominent Russian female athletes hardly got a mention when in fact there should have been an almighty investigation into their respective times which suddenly increased dramatically. We have heard VERY little about the drug testing procedures for these Games and I think it might be worth an article as I would surely find it of interest. I have got my eye on 3-4 names, who it would not surprise me, do exceptionally well in London and spring a few surprises - but will they be clean?

  • Comment number 37.

    It's clear to me, here in Mexico, that the London Olympics are already giving a tremendous boost to the U.K.'s reputation as an economic powerhouse. Trying to crunch the numbers is a futile operation. Forget the negatives, think positive and enjoy the moment.

  • Comment number 38.

    @ 37: "the U.K.'s reputation as an economic powerhouse'? (Sigh) ... those were the days ... ending in 1914 unfortunately, though Maggie Thatcher kicked off a bit of a revival 30 years ago. I think that in terms of economics, the Olympics are a bit of a non-event other than as a short-term stimulus, which might more effectively be provided by, for example, infrastructure spending with longer-term benefits.

  • Comment number 39.

    anglomexican @37

    I agree with you.

    I have witnessed the effect a few times now and it's biggest benefits cannot be bought. I have been to a couple of Olympics, a fantastic experience and one not to be missed given the opportunity. In this case the Olympics will lift all sports in this country.

    I remember the World Cup of 66, football at the time was stagnating, crowds were falling but staging the World Cup regenerated it, of course it helps if their is home success but in the case of the Olympics we will see many successes. It also creates a feel good factor for the country as a whole and boy we certainly need that at this time in Britain.

    Sadly even though i applied for several events, i have no tickets but i will be going down to London for both marathons. Just to be a part of a once in a lifetime event.

  • Comment number 40.

    @16 Theophane


    can I ask

    was it you doing that walk for the charity ?

  • Comment number 41.

    sorry to be a killjoy the Olympics do not interest me in the slightest having said that I will be watching the Equestrian as i have a friend competing in it, not from these shores . and no Lottery Funding ! for her marvellous achievements thus far either.

  • Comment number 42.

    @40;

    You can ask of course HAHA CharadeYouAre, but i suppose some degree of anonymity is desirable on these blogs, so i'd rather leave it unsaid.

  • Comment number 43.

    If there are no enduring legacies at least there will always be personal anecdotes.

    Vancouver 2010
    Mine was dressed in shorts and a t-shirt mowing the lawn in a Vancouver suburb while one of the snow boarding events was being decided on Cypress Mountain the view of which I can see from my back yard.

    London 2012
    It seems probable that someone in East London will fondly remember filling sand bags in an effort to save their home from flooding and in sight of the Orbit and wish they were in Vancouver watching my lawn grow.

 

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