The government published the first interim evaluation report on the impact of the London 2012 Olympic Games today. The full report is 256 pages long and deals in detail with four main topics- sports participation, economic impact, community engagement and regenerating East London. The first thing to say is that the government is to be applauded for conducting this research programme and publishing its findings. This is far more detailed than anything published by previous host governments (three studies have already appeared, a final interim report is due next spring, and we are promised a long-term evaluation in 2020). The research is carried out by independent contractors and refereed by academic experts. I think this sets the bar for future government assessments of mega-sports events.
So what have we learnt so far?
1. Sports participation.
There is very little evidence that sports participation has increased despite extensive government funded campaigns based around the games. For example, the report cites an increase in active participation in sport (once in the last 4 weeks) from 53.7% to 55.2%. In fact since 2006 the percentage has been static in the 53-54% range level, and only jumped in the last year to 55.2%. Given that these surveys are based on people’s recall of what they have done, this could as easily be an effect due to “availability bias” – the tendency to think that something is more likely to have happened because the activity is widely referred (intense promotion of the Olympics), as it would be to actual participation.
2. The cost of gold medals.
Everyone knows that Team GB won a lot more gold medals in the last games due to the hosting effect (112 in 2008 and 2012 compared to 58 in 2000 and 2004), but the data shows these came at a much higher cost. In real terms the cost went up from £2.9 million per medal to £4.9 million. This is not surprising- the marginal cost of winning a medal for a given country must rise, as you exhaust first the top talent and then invest in less and less likely talent.
3. The economic impact.
I have written elsewhere that the size of the economic impact is about one tenth of one percent, and these figures seem to confirm that rule of thumb (of course, for a bigger economy the effect would smaller as a percentage). In term of employment, the report claims about extra 30,000 job per year is about 1/10th of 1% of total employment. The net addition to GVA is valued at £ 7.3 billion is also about 1/10th of 1% of UK GDP between 2007 and 2012. If spread evenly across the UK this is about £25 per household per year. Isn’t this worth having? There are two problems- the first is additionality. The report makes quite generous assumptions about the extent to which the people employed would not have had employment elsewhere in the absence of the Games. The second problem is that the Olympics has taken up a huge amount of government time and effort over the last 9 years. Could all that government time and effort have generated a higher return elsewhere?
4. The impact on the East End.
The Westfield shopping centre is probably the largest single legacy effect, and there has been some debate over whether this would have happened anyway. In particular the developers have consistently made this claim, presumably fearful that otherwise they might be hit by some kind of Olympics levy. The report discusses this and concedes that Westfield would have happened without the games, but claims it would have happened 5-7 years later. I have two issues with that. First, if that is right, and we all agree Westfield is a benefit, this suggests that comprehensive reform of the planning system is required to remove bottlenecks for non-Olympic projects. Second, the report barely mentions Crossrail, the East-West rail link which is commonly agreed to be an essential upgrade to London’s infrastructure. Crossrail is due to be completed in 2018, but earlier plans, which scheduled completion for late 2012, were shelved when the government decided in 2003 to back London’s Olympic bid. This six year delay entails a substantial cost given the extent of transport bottlenecks in London.
Pretty much everyone in the UK loved the Olympics, and if that is what the government means by Community Engagement, then the Games were a huge success. Whether or not you think it was worth it all depends on (a) whether there was an alternative public sector investment project available for something in the region of £15 billion and (b) whether you believe all those politicians, civil servants and other government employees could have been more usefully employed elsewhere.
Very nice article, just what I needed.