With the PM set to make a speech suggesting the Olympics will give the economy a £13 billion boost, a think tank claims the Government is overselling the economic impact of London 2012.
In a speech on Thursday Prime Minister David Cameron will argue that the Olympic Games will give the UK economy a £13 billion boost.
Mr Cameron will say that he wants "to make sure we turn these Games into gold, to secure an economic boost for Britain that more than pays for the cost of putting them on."
Lloyds TSB - a major sponsor for the games – have also published a report claiming that the UK economy will benefit from a £16.5 billion Olympic effect, comprising of benefits to the construction industry and tourism.
Theos (a religion and society think tank) have published a report questioning the economic impacts of major sporting events and arguing that sport should be valued for sports sake.
Give us our Ball Back: Reclaiming Sport for the Common Good, a report published last week, argues that most if not all mega sporting events have a negligible or even a negative impact on the host nation’s economy, after taking public investment into account.
It found that predictions of economic boosts on the back of sport mega events nearly always over estimate the impact.
Research on the impact of previous games bears this out. For example, in 1993 KPMG predicted the 2000 Sydney Games ‘would add $7.3 billion to the Australian economy’. However, a detailed analysis by Melbourne's Monash University has found that the Olympics "in purely measureable economic variables ... had a negative effect on New South Wales and Australia as a whole", including a net consumption loss of $2.1 billion.
Similarly, ministers in the South African government predicted that the Fifa World Cup in 2010 would have significant and far reaching economic impacts. After the event, a South African government official admitted that there were no real ‘material monetary benefits’.
While it is clear that there has been major public investment in preparing and hosting London 2012, along with limited private sector funding, and predictions for an economic boost must be treated with real caution.
There is no doubt that the Olympics have major economic implications in the UK, with contracts going to companies all over the country. However, the Olympics are a largely exchequer and lottery funded stimulus package. In a national poll accompanying the release of the report, 64% of respondents felt that too much public money had been spent on the Olympics. The figure in London, where residents have contributed more through council tax, is 70%.
“We need to take these Olympic effect claims with a large pinch of salt”, said Paul Bickley, co-author of Give us our Ball Back.
“Economic impact is hard to measure, and is usually overestimated. There were great reasons to bring the Games to London, but the best were to do with the value of sport itself.”
Notes
1. Give us our Ball Back: Reclaiming Sport for the Common Good was written by Paul Bickley of Theos and Sam Tomlin of Sports Think Tank. The executive summary and full report can be read here.
2. Polling methodology: ComRes interviewed 2,045 GB adults online from 20th to 21st June 2012. Data were weighted to be demographically representative of all GB adults. ComRes is a member of the British Polling Council and abides by its rules. Full data tables are available here.
3. All media enquiries can be directed to the Theos press office:
Theos
77 Great Peter Street, London SW1P 2EZ
E. press@theosthinktank.co.uk
T. 0207 828 7777
M. 07789943527 (out of hours)
