Saturday, May 12, 2012

The Spiralling Cost of the Olympic Games

Point of order. If I go to the supermarket with a budget of fifty quid, but then proceed to spend three hundred, I am by any definition over-budget. This still applies if half way round I suddenly decide to increase my budget to four hundred pounds. To think otherwise would be to incur the wrath of my bank, my partner, and logic itself. To constantly revise the estimate each and every time you run out of money means you haven’t set a budget, you’ve picked a number at random. You could spend nine, ten, or eleven billion pounds, and it wouldn’t matter. Sebastian Coe may as well have said, “We originally set out with an Olympic budget of a fiver, but have managed to remain within our budget since we have spent less than £25 billion.”

So it is that we survey the costs of London 2012 with a heavy sigh. Although we haven’t had word of an increase in the Olympic budget for what seems like days now, the unveiling of Anish Kapoor’s Olympic Orbit tower/sculpture brought the whole sorry saga back to my attention. The 115m structure, which has set us back £22.7 million, looks like a crazy roller coaster where the sky’s the limit, reaching ever higher as it spirals out of control. Which, to my mind, makes it the single most expensive Olympics budget metaphor in history. In fairness to Kapoor, he has come out and said that the £15 entrance fee is a “hell of a lot of money”.

Too right it is. And yet it seems like a bargain when weighed against the costs for sport's quadrennial festival of commerce.  At last count the budget is running at £9.3 billion, although this figure rises to £11 billion when you include the £766 million it will cost to buy the Olympic Park land and an additional £826 million on what has mysteriously been dubbed “legacy costs”. Leaving aside the fact that the famed Olympic legacy seems to consist of little more than simply buying a legacy, let’s instead take issue with the figures.

Hugh Robertson, the minister for the Olympics and situating missiles in residential areas, is said to be “increasingly confident” that the games will come in under budget. All right so. But which budget? It’s certainly not the budget submitted when the country was bidding to host the games in 2005. Back then the figure was an estimated £2.4 billion. The Public Accounts Committee suggests that the discrepancy came about because “LOCOG’s initial estimates for the cost and scale of venue security were based on a “finger in the air estimate”! Ah, guesswork - the firm foundation on which every sound economic policy is built.

By 2009 the budget was up to £9 billion and rising. The cost of the opening and closing ceremonies doubled at the end of the last year. And just to rub it in, we’re being charged extortionate fees to attend any of the events that are being put on using public money. If you were lucky enough to get a ticket to an Olympic venue it will have set you back anywhere between £20 - £725. If you want to go to the Olympic concert, you’ll be splashing out £50+. Fifty quid to be reminded that Duran Duran were shite? I think not.

The most startling recent cost increases have revolved around security at the games. The budget has now more than doubled to £553 million. Once again the Public Affiars Committee have been scathing in their appraisal of the games organisers:
"LOCOG has had to renegotiate the contract for venue security it awarded to G4S in December 2012. However, there is no evidence that the Government has secured any price advantage, even though the value of the business it is putting to its contractor has increased from £86 million to £284 million."
Lest we forget, the G4 part of these security ‘experts’ were, in their previous incarnation, responsible for a catalogue of shambolic mishaps marked by such ineptitude as to make the Chuckle Brothers look professional. After a spate of prisoners escaping while being transferred between prisons, Group 4 managed to put an electronic tag on the prosthetic leg of a burglar. When the man simply changed his leg and went on nicking, the masterminds at G4 were baffled. We can sleep safe at night knowing that G4S will foil any terrorist plot. Probably by knocking out would-be bombers with a length of wood they're carrying on their shoulders. To me, to you.

The last time the games came to London they were held amid the rubble of a city still devastated by World War II. As we enter a double dip recession, politicians are increasingly fond of referencing those “Austerity Olympics”. They are put on display as a proud symbol of what a cash-strapped nation can achieve, a reminder that the collective high spirits of the nation are more important than money. They are the promise of a successful, prosperous London 2012. Blah. Blah. Blah. What the politicians fail to tell us when invoking the spirit of 1948 is that the government of the day refused to contribute any public money to the games. When there was no money in the coffers, Clem Atlee decided not to cough up.

A better comparison would be to examine the Olympiads of recent times where all bar one of the host cities (Los Angeles in 1984) exceeded their budget. Both the Beijing and Athens games saw their eventual costs double from the intial estimates. The hosts of the 1976 games, Montreal, were eventually saddled with debts of  $2 billion. Before the games got under way the mayor of the city, Jean Drapeau, claimed, “the Olympics could no more produce a deficit, than a man a baby”. Montreal finally finished paying off their debt in 2006, thirty years after they held the games.

With the costs of the games nationalised and the profits privatised, the people making money out of the games will be the IOC and their loyal band of corporate cohorts. No doubt the ConDem coalition will continue to throw money at a budget that, history suggests, has not yet finished increasing. Only people with more money than sense would spend time trying to book Keith Moon for the Olympic Ceremony. The trouble is that it’s our money they’re throwing around. Like a shop-a-holic on a spending binge, there’s no cost too small, no lavish step too far. It’s an addiction. A disease. Won’t somebody, please, cut up their credit cards?