The Olympics – The Legacy Lies Begin (as usual with David Cameron)

It would be churlish of me not to admit that the Olympics brought joy to many. The faces of the athletes and the volunteers smiling and cheering and of many in the crowd were uplifting. For all my cynicism about money and drug cheats (the latter already vindicated in the ladies shot-put), a cynicism which is undimmed, I admit the Olympics made many folks happy, at least temporarily. However, we now come to the financial impact. It is clear now that for London as for every other Olympic City this was a financial disaster. £9-15 billion pissed away and the real economy tanks for the duration. Not good. We now, as taxpayers, pick up the tab.

To soften that blow you are already – as predicted here – seeing our political elite (led by David Cameron) blathering on about legacy benefits ( which are of course all impossible to measure) as if to pretend that the overall financial impact was not as bad as nasty mean spirited people like me suggest. Over the coming weeks and months I expect to be writing regularly as one “legacy benefit” after another is wheeled out and then is easily shown to be illusory. But we have two early runners and riders in the “bogus legacy benefits stakes.”

The first is the idea promoted by Dave Cameron and Seb Coe that the Olympics will encourage kids to take up sport, be fitter, etc, etc. Well er… that is not really true is it? There is no hard evidence from any previous Olympics that the host nation sees an increase in sports participation after the games. For a full analysis click HERE.

I suspect that had the £15 billion be spent on saving schools from having to sell off playing fields that might have had more of an impact. It is also worth noting the disproportionate number of winning British athletes from public schools. The left will say that is a matter of better facilities (well don’t blow £15 billion on the Olympics then!). I suspect that it is because at public schools the “All must have prizes” mentality is not, as it is in the State sector, endemic. In sport some win some lose. Get over it.

With no evidence at all for this legacy benefit being anything other than wishful thinking it will take a few years for this to be shown to be true. But do not hold your breath for a great British Sporting renaissance.

Legacy two is the idea that the Olympic Media centre at Stratford will become a great hi-tech hub creating “4,000 jobs in East London.” Hmmm, we shall see. The centre certainly has great facilities, broadband to die for etc. But exactly where will those companies attracted by low rents to use the centre come from?

I am not sure that the low rents and maybe a few grants will persuade folks to travel from outside the UK to relocate in the hell-hole that is Stratford. I do expect firms from other parts of London to go there to save cash. What is Stratford’s gain will thus be a loss for “silicon roundabout” (aka Old Street) and elsewhere. And there will be some start-ups that are only viable because they will pay sub market rents/get grants that will go there. When the subsidies are turned off they will go bust.

Governments always think that they can pick winners. In Britain we had the car of the future (DeLorean), in the US Obama pissed away hundreds of millions of dollars on his pals at Solyndra because solar energy was the next big thing. Sure. Invariably governments get it wrong and I am not sure that subsidising a stack of folk to offer twitter consultancy and optimisation services is the way forward.

Given that the net real long term jobs created will thus be way less than 4,000 (I exclude those that are jobs merely relocating to Stratford and those that are non jobs in that without subsidy they would not exist) I suspect that this “legacy” will show itself as one of the most expensive job creation schemes yet devised. Time will tell.

Now back to you Mr Cameron, what is the next legacy you wish to wheel out to justify the true economic cost of the Olympics?