Counting the Cost

The cost of the London Olympics

When the last medal is handed out, will British taxpayers get the legacy they are paying for?

As the 2012 London Olympics begin, we are focusing on the world’s most-watched sporting festival on this special edition of Counting the Cost.

Putting on the Olympics is a costly undertaking.

Top estimates for the Athens 2004 Games were more than $10bn; Barcelona in 1994 was $11.8bn; and Sydney, seen as one of the most successful games, came in at a relatively cheap $3bn.

So what is the price tag for London’s Games?

Since the 2008 financial crisis the estimated cost of the games has risen. The latest government report has the games on target to cost $14.5bn of public sector money.

However, a recent parliamentary committee warned the full cost of the games could amount to $17bn and skeptics are saying it could be even more. So there is the cost but how will the Olympics affect the British economy?

A report by VISA predicts an increase in consumer spending of $1.2bn during the games and an $8bn stimulus to the British economy over three years.

David Cameron, the British prime minister, is more optimistic, saying that the London Games will generate over $20bn.

But when the games are over and the last medal is handed out, what kind of legacy will be left?

The idea of creating a legacy in London’s East End was central to London’s successful bid back in 2005.

In Victorian times, east London was a black hole of slums and disease. It got bombed heavily in World War II. Nowadays, it can still present a picture of gloom, the forgotten part of the British capital, so London’s bid for the Olympics offered hope that the games might finally turn the area around.

But there are grave concerns that the poor and those in most need around the site are in danger of being priced out of their own community. So will there be a legacy for all? And what are the challenges?

Joining us to discuss this is Daniel Moylan, the chairman of the London Legacy Development Corporation; and Pamela Gardner, the director of neighbourhoods and communities at East Thames, a housing provider and social regeneration charity.

A more immediate challenge than creating a legacy is providing security. And the scale of the security operation for London 2012 is quite staggering.

It will be the largest peacetime security operation in the UK since World War II – the security budget for the games has now increased to $860m and 18,200 members of the armed forces are being deployed to help with security.

Joining us is Dr. Pete Fussey, a senior lecturer in Criminology at the University of Essex whose work has focused on security and regeneration in relation to major events.

He says: “After the Montreal Olympics in 1976 …, the IOC said they want a spectacle of sport not a spectacle of security, but what we have here is an Olympic Games that you can see in the heart of an existing city, so whereas somewhere like Sydney, where all the security infrastructure and the games were outside the city, here it’s in the heart of the city, so I think it’s unavoidable to really see these kind of military aspects. They are much more visible than they were at previous Olympics and as a result they are much more controversial.” 

Counting the Cost is also looking at the Olympic trademark and the issues behind it.

Small British businesses are being prevented from benefiting from Olympic fever due to strict policing of the Olympic trademark by the the London Organising Committee of the Olympic and Paralympic Games (Locog).

The Federation of Small Businesses claim Locog has lost “all sense of reasonableness and proportion” and has gone too far in its enforcement. So is the Olympic branding clampdown going too far? And are Olympic organisers killing off the spirit of the Games?


Watch each week at the following times GMT: Friday: 2230; Saturday: 0930; Sunday: 0330; Monday: 1630. Click here for more Counting the Cost.

Follow Kamahl Santamaria @KamahlAJE and business editor Abid Ali @abidoliverali