Just two short years ago, Londoners were dancing in the street. To everyone’s surprise, London had beaten Paris in the race to stage the 2012 Olympic games. Champagne bottles were uncorked, everyone hugged each other and the old enemy – the French – had been humiliated. It was a good day to be in London.
Today, it is the turn of the French to laugh at the losers on the other side of the English Channel. The UK government has just announced that the budget for the Olympics has almost quadrupled. When London made the bid to host the games, the government had anticipated a budget of around $5 billion. However, the UK government now recognises that the bill is likely to be closer to $18.5 billion.
The government didn’t want to admit that the cost of the games was going to explode. It had planned to use the tried and test public sector trick of announcing expenditure over-runs in a gradual way. However, the UK’s public auditor and watchdog over public expenditure was having none of that. Instead, he forced the government to tell the truth.
The recriminations and buck-passing have already begun. The government would like Londoners to pay for some of the additional cost. However, London’s mayor thinks that the government should shoulder the additional cost. In the meantime, the government is looking to raid various funds that are used to help finance the arts and charity. In a classic example of British understatement, the opposition Conservative party describe the budgetary mess as 'scandalous". A criminal waste of tax payers money would have been a more appropriate description of this mess.
Staging the games is all about vanity and attention. The long-term economic benefits are minimal. For two short weeks, hotels can charge high room rates, and taxi drivers will be a little busier. However, this temporary boost to tourism revenue will hardly amount to $18 billion. So five years from now, London will be encumbered with a series of expensive and unnecessary sporting white elephants. Paris, on the other hand, can sit back and enjoy the games knowing that it had a lucky break. It could have won the chance to put on the games, and wasted billions of dollars doing so. Happily for the French, the Brits had the chance to waste billions of dollars of taxpayers money instead.
Vive La France.