Govt claims £9.9bn boost from Olympics

AFP/London

The government yesterday claimed that last year’s Olympic Games in London gave the economy a massive boost, even while acknowledging that some of the investment might have happened anyway.

An official report said the Games had brought £9.9bn to the economy, more than the £8.92bn cost of staging the event.

But analysts questioned some of the projects included in the study, including a £1bn planned shopping centre in Croydon, south London - miles from the Olympic site.

Business Secretary Vince Cable said the report was compiled by asking the companies making investments whether they would have spent their money without the Games.

“The answer we’ve had with a lot of the high-profile investment - like the Malaysians in Battersea Power Station - is that a lot of the key negotiations and support came out of the events that we organised around the Olympics,” he told BBC radio.

“Would this have happened anyway? Some of these activities clearly would, but the Olympics were a key catalyst in making those investment decisions real.”

Cable said he had personally been sceptical about the Games before Britain won the bid, warning that it would be “a big cost and there would be no benefit”.

But he said ministers had put in “an enormous amount of effort” to attract investment around the Olympics.

The Olympics and Paralympics last summer were viewed as a huge success in Britain, passing off without any major problems, netting the hosts 29 gold medals and even coming in slightly under budget.

But the government has always stressed the importance of the economic and sporting legacy, and the report claims progress on at least the first of these is going well.

The £9.9bn boost to the economy comes from businesses securing new contracts, additional sales and new foreign investment in the last year, the government said. As well as the shopping centre, this includes the £1.2bn regeneration of London’s Royal Albert Docks by a Chinese developer, and the redevelopment of the landmark Battersea Power Station on the River Thames by a Malaysian consortium.

Samuel Tombs, economist at Capital Economics, said the report “seems to make some tenuous claims”. “It’s hard to believe that the Games were the decisive factor in many of the business deals discussed in the report,” he said, adding that the money spent on the event would have been better invested elsewhere.

Mayor of London Boris Johnson insisted, however: “London is succeeding where virtually no other host city has, on track to secure a solid gold payback on the taxpayers’ outlay.”