Tuesday, 25 May 2010

Herald column 24 May 2010

I'm getting some complaints that the column isn't always online at the Herald site. Here's the raw copy:

If you wanted to make an investment of £100 million or so, would you hand it over to a bunch of people who want to build a 2,500-seat velodrome in the East End of Glasgow, where it will provide a lasting legacy for the many thousands of budding Chris Hoys for which that part of the world is renowned? Or might you wonder whether your cash would be safer in a chain of kebab shops, off-licences and tattoo parlours?
To put your mind at rest, the outfit handling this investment guarantees “100% dedication. 100% satisfaction.” The very first line of its mission statement promises: “to organise and deliver the Glasgow 2014 Commonwealth Games in a way that fully realises the aspirations of the Glasgow Bid and the contractual obligations of the Host City Contract – on time and on budget.”
Which sounds lovely. There’s a snag, though. With four years still to go, Glasgow 2014 Ltd is already £70 million over budget. I wouldn’t describe my satisfaction at that as “100%” – au contraire, in fact, as the man on the Channel ferry said when asked if he’d dined. The only thing it might be the correct percentage mark for is the level to which the organising committee for the 20th Commonwealth Games has met my expectation that it would demonstrate appalling fiscal incompetence.
Naturally, having shown early on the ability to throw money away that characterises grand projects of this sort, they’d now like some of the cash that they think they would have had if it weren’t being spent on the Olympics in London, so that they can throw that down the stank as well.
Possibly, like me, you don’t have £100 million to invest just at the moment. But then nor does the Westminster government. What it currently has to invest is minus £1.8 trillion, or 126% of GDP, or £76,000 per household. That’s if you don’t count the banks bailout, of course, which would make it minus £2.3 trillion, or 161% of GDP, or £96,000 per household.
In the face of these frankly terrifying figures, it seems fairly pointless to argue about whether the government should not spend this money that it doesn’t have in the East End of Glasgow, or not spend it in the East End of London. One simply concludes that they should not spend it.
But huge projects such as the Olympics or the Commonwealth Games are the most obvious example of taxpayers’ money being squandered on exercises in vanity masquerading as “investment” or “regeneration”. Private building contractors do not feel that throwing a gigantic beanfeast and shoving a couple of thousand testosterone-laden lunks into their newly built block of flats is a necessary preliminary to flogging them off. If the Government wants more social housing, or a swimming pool, or a gymnasium, why not just build the thing without the additional expense?
Because the truth is that for all the talk of how much such projects do to revitalise run-down sections of cities, there is precious little evidence that they do. The vast majority of these schemes do not deliver any appreciable benefit. The “multiplier” argument that the wider economy benefits is pretty bogus when it comes to sports facilities, which don’t produce much in the way of a financial boost for the areas in which they are constructed. Dressage arenas, volleyball courts and archery ranges have a fairly limited usefulness beyond their immediate function. And, of course, every pound spent in constructing a velodrome is a pound not being spent on, say, an accident and emergency unit.
Nor is there even necessarily a short-term financial boost from the event itself. Tour operators in South Africa report that holiday bookings have actually fallen in the run-up to the World Cup, as, understandably enough, more visitors are put off by the presence of football fans than there are football fans.
Two of the Olympics often held up as great successes – Atlanta and Sydney – suggest that the colossal expenditure required to stage them did not deliver much in the way of benefit. True, Atlanta (which was an exercise in naked corporatism which relied on huge levels of private sponsorship) did in fact turn a profit, just, but it brought in $10 million for an outlay of $1.8 billion. Sydney cost the Australian taxpayer around AUS$2 billion. And for all the bruited claims that it would showcase the city’s charms to a wider international audience, subsequent foreign tourism to New South Wales actually fell behind tourism in the rest of Australia.
I admit that I don’t have much interest in sport. But I wouldn’t go as far as Noam Chomsky, who thinks that its whole purpose is to foment jingoism and distract the lumpenproletariat from things which really matter, like seeing through the gigantic capitalist conspiracy organised by the military-industrial complex, of which the snooker at the Sheffield Crucible and the darts at Frimley Green are merely components.
In fact, sport can clearly be extremely good at generating money, which may be why billionaires are so keen on owning football clubs. Manchester United’s magazine, for example, sells 30,000 copies -– in Thailand. You don't need to be Warren Buffett to see the opportunity for making a bob or two in a market like that.
Successful sports teams, as a result, manage to attract customers, sell television rights, market replica strips and even pay the ridiculous salaries of their players without reaching into my pocket to do it. If they pay a design company £95,000 for a G in a set of circles which looks remarkably like one they produced earlier for an arts group, it’s nobody’s business but theirs. If they put up a stadium, they pay for it by selling tickets.
Given the apparently insatiable public appetite for huge sporting events, the real puzzle is how you can contrive not to make a fortune out of them. But the answer to that is simple enough. You just get government involved in the process, and wave goodbye to the money. Your money.

No comments: