WHEN London last hosted the Olympic games, it was 1948. The Allies had won the war, but Britain’s rewards were still to come: food was still rationed; the capital’s streets looked like rows of broken teeth (post-war construction was but a dream); and there was quite simply no cash at all to spend on stadiums or infrastructure. When the cycling competition at Herne Hill velodrome ran into the evening, locals had to park their cars outside and put their headlamps on full beam, as the organising committee had been unable to afford a set of floodlights.
As the capital gears up for the 2012 games, the chill winds of austerity are upon us yet again. The aftermath of the global financial crisis can’t be compared to that of World War Two, but you should try telling that to the terrified mandarins running around Whitehall; they have been asked to cut public spending by up to 40 per cent in real terms – the biggest fiscal squeeze in Britain’s peacetime history. Quite what these swingeing cuts mean for the £9.3bn Olympics budget will remain unclear until the Autumn, when the Treasury must unveil a comprehensive spending review that will spell out exactly which projects are to be axed. Still, the department of media culture and sport (DCMS), which is responsible for providing the £6bn or so of central government funding, hasn’t been offered any shelter from cuts.
Although the official line is “wait and see”, aides to culture secretary Jeremy Hunt think that it could be too late to start clawing money back from the Olympics budget. One DCMS official told City A.M. that a lot of the money has already been spent: “The contracts have been signed, the stadium is pretty much built – we’re very nearly there”. Instead, it looks like the name of the game could be ensuring the budget – which has soared from £2.35bn when London won the games – doesn’t swell any further. If specific projects over-shoot, as is the case for the aquatics centre, savings will have to be found elsewhere.
To its credit, the Olympic Development Agency, which is responsible for spending the lion’s share of the funding, has already said it will deliver £27m of in-year savings for 2010-11. However, critics argue that it is unfair to make the Olympics a sacred cow, especially if public services are slashed and burned. Similarly, DCMS will have to make even deeper cuts elsewhere if the Olympics do emerge from the comprehensive spending review: those with vested interests in the arts say that theatre, visual art and British film might never recover.
Advocates of another austerity Olympics should take heart from the fact that London’s
games are costing less than half of those in Beijing. However, that’s forgetting the fact that a billion quid buys you much more in China, with its low-wage workforce and lax planning laws. Still, even with the huge cost, China claims to have turned a profit of around $16m on its Olympics investment.
London Mayor Boris Johnson characteristically uses Latin to describe his approach to the games: “Citius, Altius, Fortius, sed non carius” (for the 99.9 per cent of us that don’t speak the ancient language, this means “Faster, Higher, Stronger, but not more expensive”). The “not more expensive” part is key: Boris doesn’t want the cost to increase, but he’ll fight tooth and nail to stop proper cuts. “The progress that is being made in the Olympic Park is extremely impressive, coming in on time and on budget,” he told us. “So much so that if we needed or wanted to we could even bring the Games forward a year and catch our competitors off guard.
“A great deal of hard work is being carried out to ensure savings have already been made and it would be a mistake to take too much money out of the Olympic budget now, only to be forced to put more back in closer to the Games. Equally I am completely committed to the regeneration legacy in East London and it would be a false economy to short-change the planned investment in this.”
One sticking point could be the £1bn contingency that the ODA has to play with. City Hall sources are worried that Hunt could cut the budget by this amount to satisfy the Treasury’s appetite for immediate savings, but Boris is adamant that the cushion is needed to absorb any unforeseen shocks. “Don’t touch the contingency,” an aide to the Mayor said. “We can’t say where we’re going to be at the end.” Of course, any savings the ODA does make will probably be returned to government coffers after 2012, although that could be too late for the coalition, which wants to make a significant amount of cuts now so it can reduce taxes in the run up to the 2015 election (that’s assuming the Con-Lib coalition lasts that long).
There is also concern over spending that exists outside the Olympics budget, which many
see as integral to its success. Upgrades to the Tube network need to go ahead and the
Crossrail project must be built, City Hall says, if the Games are to run smoothly. Meanwhile, funding to help British athletes, which is doled out by Sport England and UK Sport, is an ideal candidate for the chop when Treasury officials start swinging the axe.
It’s oh-so British to complain about the Olympics – the cost, the disruption – and things are unlikely to change when swarms of tourists descend on the capital. Still, it’s important to remember the circumstances under which we won the games: shortly after London’s bid emerged victorious, jihadist terrorists unleashed terror on the London Underground. In many ways, that makes the 2012 games a lasting testament of the capital’s ability to pick itself up and carry on regardless, to survive that assault on its way of life. It might have to be done with less cash but, as proved in 1948, it can be done.