Debates over the costs and potential benefits of bringing the Olympics to the UK have been raging since the International Olympic Committee first made the decision back in 2008.
Image by "RambergMediaImages" via flickr
The eyes of the world will always be on any city chosen to host the Olympic Games - but both critics and supporters of the historic sporting event keep close watch on the budget too when the world’s biggest show heads to town.
And in today’s difficult financial climate, how do experts think that the decision to hold them in the UK is affecting the bank balances of residents and tourists, and the British economy?
The Olympics and your bank balance
One of the main issues raised by critics of the decision to hold the Games in the UK is that residents, particularly in and around London, would have to pay additional charges for council tax in order to help to fund the Games.
This has been a major concern for households already struggling to pay their bills at a time of high unemployment and rising costs.
And, due to increased demand during the event itself, tourists visiting the UK are likely to face increased charges for everything from plane and train tickets to hotel accommodation and meals - and this will also affect UK residents who either live in London or are travelling to the city for business meetings, to see friends or relatives or for other purposes at that time.
It’s worth remembering, however, that if you’ve been lucky enough to get tickets for any of the events, it’s likely to be a once in a lifetime experience. The Games haven’t been held in London since 1948, so it’s probably going to be many years until they’re here again.
Even if you haven’t got tickets, you can still soak up the atmosphere in the city, and you can watch non-ticketed events like the Olympic Marathon, the 50km and 20km Road Races and the Road Cycling - so, for once, it may be worth paying the extra anyway.
The Olympics and the UK economy
National newspapers have been full of stories about the cost of the Olympics since it was first announced that the event would be held in London in 2016. And, it’s certainly true that when the final calculations are made, the cost of hosting the Games is likely to be far higher than originally estimated.
A recent report by the Government’s Public Accounts Committee stated that:
“The Funding Package of £9.3 billion allocated to the Olympics does not cover the totality of the costs to the public purse of delivering the Games and their legacy, which are already heading for around £11 billion.”
And an investigation by Sky Sports, in January 2016, revealed that when additional counter-terrorism, security and intelligence costs, the costs involved with diverting so many police officers to the Games, the cost of upgrading public transport and other extra costs have been taken into account, the final bill for staging the Olympics could be as high as £24 billion.
However, when making an assessment about how much it’s costing the country to be the host nation for such a prestigious event, it’s also important to take into account the benefits that come with that additional spending.
Transport links to and from London have undergone far more rapid improvements than they would have done, had the UK not been chosen as the venue for the Olympics. It’s not just transportation that’s getting a boost.
Concerns about the difficulties of travelling to London to do business during the Olympics have prompted many companies to invest in a new business telephone system with video conferencing capabilities.
The logic behind this is to cut business travel costs by having more virtual meetings. This is likely to cut costs on a long term basis and help out the environment.
After the Games has taken place, the Olympic Park will be transformed into a residential area, providing London with up to 11,000 new homes, 35% of which are planned to fall under the category of affordable housing and 40% of which will be family homes.
And, the Olympic sports venues will be adapted so that they can be used by both local residents and elite athletes.
Not only will these developments benefit local residents, they are also giving the ailing UK construction industry a much-needed boost. The construction of the Olympic Park and venues have already provided additional jobs and the post-Games redevelopment of the site is set to provide even more work.
Although some sources, like credit rating agency Moody’s, have claimed the Olympics won’t have significant long-term benefits to the British economy, the situation is far from straightforward, so all we can do is wait and see what happens when the final costs and benefits have been assessed - and we might not see the true picture for many years.
What do you think the financial implications of the Olympics will be for the UK? Have you been affected by price increases when living in or visiting a city hosting the Games? Do you live in an area that’s been regenerated for the Olympics? Leave a comment below…
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June 22, 2023
business, news