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From The Socialist newspaper, 21 May 2008

London Olympics 2012: A great sporting occasion and a great profit-making opportunity

One hundred years ago, on 27 April 1908, The summer Olympics opened in London in White City. London also hosted the games in 1948, just after World War Two.

These are sometimes called the 'Austerity Games' because of shortages and rationing after the war. But the London Olympics in 2012 will be a different matter. Already costs are spiralling as big business cashes in, whilst Londoners contemplate how much they will end up paying.

Annoesjka Valent looks at the prospects for 2012.

We are now just four years away from London hosting one of the biggest sporting events in the world for the third time. More than a billion Chinese people are expected to watch the Beijing games later this year, not to mention half a million international visitors, and an estimated worldwide four billion TV viewers.

There was a lot of excitement and hope when it was announced that London would be the 2012 host but the day after we had the horrific London bombings. There might still be a lot of enthusiasm and support but with the estimated costs now already spiralling up to around £9.35 billion - four times the original budget - this has led to people questioning it more.

Last September a YouGov survey for the Taxpayers' Alliance found that almost two-thirds of those questioned were opposed to the expense of the 2012 London Olympics and would rather see the cash used elsewhere. 44% thought the stated £9.35 billion cost would be put to better use in schools and hospitals. Another 20% would like the money used to reduce tax, with only 28% backing the cash being spent on the games.

In a radio interview this April, the Olympic chief Roy McNulty admitted: "Homework" was not done "deeply enough at the beginning", leading to a cost revision from £2.3 billion to £9.35 billion.

He went on to say that it would have been unrealistic to work out all the details in advance. "It would have been a huge gamble" he said, "a lot more money on studying something that might not happen."

Time limit

And because we cannot have delays like those that dogged Wembley Stadium, as the special fixed deadline of the start of the games can't be moved, people fear the government will just have to continue throwing money at it in order for all the facilities to be finished on time.

Everyone should be given the fullest opportunity to develop themselves, whether it is academically, athletically or in any other way. And certainly the Olympics is an opportunity to see some of the finest athletes in the world showing what they are capable of.

But take the example of Montreal in 1976. Despite it being the Olympics that had some of the most memorable performances ever, it turned out to be one of the biggest financial disasters in the history of the Olympics.

There the costs rose 13-fold in the space of just six years, with the consequence that the debt for the stadium was only finally paid off in December 2006 - 30 years after the event!

Their Olympic stadium, originally dubbed "The big O" for its shape, is now known as "The big OWE". Montreal's key architect from the time is convinced London might be heading for a similar crisis and believes costs could end up being around £15 billion.

There was an official inquiry into the Montreal fiasco. The mayor of Montreal promised the games would be self-financing but the inquiry found the organisers guilty of: "Administrative irresponsibility, lack of project management and failure to establish an overall budget". Studies have estimated even the cost of demolishing the stadium would be over $500 million.

What the Olympics should not be about is the prestige or profits to be made out of it. The Beijing games will be used by the big companies to get into the Chinese market. It is estimated that $2 billion can be made from advertising to the China TV audience alone.

There have been many suspicions and scandals about the buying of votes in the venue selection process. In September, leader of the London bid, Lord Coe, was at the centre of a row amid claims that his private businesses have benefited from his role.

A Channel 4 Dispatches programme showed how Coe's status may have boosted his personal earnings on top of his official annual salary of £285,000. He received for example almost £200,000 for private speaking engagements, product endorsements and consultancy work over two months shortly after he secured the games for London in July 2005.

On top of that, the money that the sponsors will be making, shows clearly again how the Olympics today are really about profits. According to a recent survey, 68% of Chinese sports fans said they are more likely to buy the brands that sponsor the games. And during the Athens Olympics, spectators who were seen wearing clothing, or carrying bags, bearing obvious logos of sponsors' competitors, could be denied access or even removed from stadiums.

The government is making a big deal of the legacy the games will provide: regeneration of poorer areas, housing, jobs and increased participation in sports are continuously being stressed.

But many Londoners are sceptical about whether the legacy will end up being positive for them. And they're right to be, given the pro-big business nature of the government.

There is a lack of sports facilities around the Olympic park in east London. There are only 80 public swimming pools in London for a population of nearly 8 million.

In Camden currently none of the schools have proper playing fields. This government and the previous Tory governments have been falling over themselves to sell off land around schools. Recently there have been reports about some newly built academies, where pupils have no proper breaks or playing fields.

Lottery

The Lottery funding has been robbed of £675 million to fund the Olympics, especially from the sector that is about getting more people active in sports.

It seems perverse to take money away from community sports groups to fund the Olympics when the government claims the Olympics will provide a real legacy of increasing participation in sports.

£99 million has been taken away from Sports England. Sports England's target of getting two million more people active in sports before 2012 is now seen as unattainable. They say this 8% budget cut will likely result in 186,000 fewer people being given the chance to participate in sports.

Housing is another big issue in London. In the original bid, the government promised that between 30,000 and 40,000 new homes would be built in the wider area, with up to approximately 9,000 new homes in the Olympic park. But 50% will be owner-occupied, so most ordinary working class families in the three host boroughs will be priced out.

20% is part buy/part rent at commercial rates so again most of the capital's key workers such as nurses and teachers will not be able to afford this. For Hackney it would work out that only 17 socially affordable homes, of which seven will be family-sized units and ten one/two bedroom properties, will be built. This is while Hackney council has a waiting list of about 12,000-15,000 families.

A report published in May 2007 for the Greater London Authority warns that the event will struggle to bring a boom in jobs, sport and housing and that it could result in white elephant venues, job losses and a couch potato generation hooked on television sports coverage.

The report also claims it will be difficult to regenerate parts of East London, where the venues will be built. Researchers analysed the aftermath of the Olympics in Athens, Sydney, Atlanta and Barcelona. They found venues "struggled to make their mark" in improving employment and sports participation.

The authors of the report, based at the University of East London, said that Greece actually had lost 70,000 jobs just after the 2004 games. Improvement in sports participation was "mixed, at best" with Sydney experiencing small increases in seven Olympic sports but a decline in nine. The research suggests this could be due to the "couch potato syndrome" induced by the quantity of TV sports coverage.

It criticised the claim by Neale Coleman, a policy director for the then London mayor Ken Livingstone, that greater participation in sport would be a "given" if Britain won a high medal tally.

The report goes on to argue that plans for urban renewal must reflect the needs of residents and not replicate the significant bad feeling in Atlanta, where some neighbourhoods lost housing to the Olympics development.

Even in Barcelona, the most successful of the four cities, infrastructure improvements mainly benefited international residents and property investors.

There has been a massive increase in property prices in Beijing, average prices are reported to have increased by almost 10%. House prices in London and the South East have already risen well above the national average with prices two to three times what they were a decade ago.

In Hackney, the average price in 2006 was £265,049. In 2007 it was £319,279, a 20% increase.

There is also the issue of what pay and conditions construction workers will have and health and safety on-site. At the height of the construction works over 20,000 people will be working in a very tight area.

In Beijing, labourers (some in their teens) are working seven days a week for less than £20 to complete the facilities on-time. Seven workers were killed in March on the construction of the Olympics subway tunnel. Workers are housed in office buildings outside the site that have been transformed into dormitories, sleeping twelve in unheated rooms without running water.

Extremely worrying is a judgement made on 3 April by the European Court of Justice, that a Polish subcontractor operating in Germany can lawfully pay construction workers less than half the German construction industry's agreed wage.

This could mean that foreign companies employing people in the UK can ignore collective agreements and legally pay workers below agreed wage levels.

The Montreal story shows that the dream of inspiring a whole generation of kids to take up sport may not come true. What happened to their facilities is striking. Like in London, they were built in the poorer areas of the city but most have not been used since.

Run-down stadium

The Olympic stadium is completely run-down and only occasionally used for monster truck races. The cycle track has been turned into a nature exhibition - because only ten cyclists per day were using it.

The Olympic swimming pool stands without water and when Montreal recently staged the World swimming championships, the city built a new facility closer to town. Other facilities have just been pulled down.

Transport is also a big issue. We want to see improved transport facilities in London, but at the moment local residents and workers face a lot of disruption with the East London line being closed for about 30 months.

Residents in south London now have to use more costly routes - while London is already the most expensive city in the world for transport.

London's old sewers need upgrading to prevent the Olympics from literally becoming one big stink but this means a £37 a year increase in Thames Water bills, while the company increased its pre-tax profits by almost a third to £346 million!

London council tax payers will probably have to pay an extra 38p per week till 2018.

The Olympics should benefit ordinary working-class families and not add to their debts. The sponsors and big companies involved that will be making profits out of the Olympics should pay.

Former mayor Ken Livingstone agreed that site workers should be paid at least the London Living Wage which is above the national minimum wage. A fight may be needed to gain this commitment from the new mayor.

There should be a site-wide agreement, with all the trade unions involved, rather than unions being forced to negotiate for the different sites separately.

No worker should have to work longer than a 35-hour week. There should be strict adherence to health and safety measures, including proper, democratically controlled trade union safety reps.

In addition, in 2012, young people, pensioners and those on benefits, should get free or much cheaper entry to the events.

After the Olympics there should be much more genuinely affordable housing than is planned now. The facilities for use afterwards should be publicly controlled by the local authorities and genuinely affordable and schools should have free access to them.

Overall, there should be far greater government investment in recreational facilities at grassroots and community levels, including increased funding for educational sports facilities.

As socialists, we can be enthusiastic about seeing excellent athletes in action at the Olympics, however we need to hold the government to account and campaign for a true lasting legacy to be provided for working-class families.

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In The Socialist 21 May 2008:

Step Up Fight Against Low Pay!