What are we getting out of the Olympic Games?

Culture Secretary doubts if 2012 can provide legacy of encouraging Britons to take up sport – and blames Labour.

Britain's much-trumpeted Olympic legacy following the 2012 Games could amount to little more than the regeneration of a small pocket of east London. With just two years to go before the £9bn Olympic Games become the focus of world attention, questions are being asked about whether they will be able to persuade a nation of couch potatoes to put down the remote and pull on their trainers or trunks.

Despite venue and stadium construction being on budget and ahead of schedule, officials have admitted that there is a "big gap" in plans to increase nationwide participation on the back of the event. Promises of an Olympic legacy were central to London's winning the bid in 2005. The Secretary of State for Culture, Media and Sport, Jeremy Hunt, said yesterday that there was no specific funding set aside for the Games to be used as a catalyst for a surge in sports participation.

Experts are warning that the London Olympics could repeat the failings of previous hosts who didn't manage to use the event to stimulate interest in sport, and were left with a collection of white-elephant venues. UK sports organisations say looming spending cuts mean that substantial new investment in facilities and coaches is doubtful.

"We have always had real concerns about the lack of a legacy for the whole country. There's no budget for it, so that has been one of the problems we've been keen to put right as soon as we possibly can," Mr Hunt said. He blamed Labour for failing to set aside Olympic legacy funding, while creating the current economic deficit, which means additional cash is now unavailable. The former Olympics minister, Tessa Jowell, yesterday dismissed the claim: "It is not a matter of opinion whether this legacy was funded or not. The figures clearly show that it was and that funding was set to continue," she said.

Labour planned to invest £780m in school sports from 2008-11, in an attempt to get all schoolchildren doing five hours of sport a week, and get two million more people physically active by 2012, she added. Funding for community sport had trebled since 1997, while elite sport was to receive £550m by 2012. She blamed the Government's "lack of ambition" for the threat hanging over the legacy. "By ending free swimming and dropping the bold target for two million more people to be physically active by 2012, they are placing the legacy in danger, in clear contradiction to everything the Olympics should mean for our country," she warned.

Now the Government says it intends to change the rules governing sports Lottery funding to permit up to £10m to be spent on an Olympics-style school sports competition – potentially involving 24,000 primary and secondary schools. The National Lottery is already providing £2.2bn of the £9.3bn total Olympic budget.

But Mr Hunt, who has drawn up plans for 40 per cent cuts at the Department for Culture, Media and Sport, refuses to rule out further raids on the Olympics budget when the results of the Comprehensive Spending Review are unveiled in October.

Last week, the Olympic Delivery Agency reported on progress on building work on venues, but there are mounting concerns that the huge financial outlay will fail to have a lasting impact outside London. Targets to increase numbers of people regularly playing sport are to be abandoned, swimming initiatives scrapped and new sports facilities shelved."The truth is we would like to do a lot more with sport than we are able to because of the severe restraint on resources," Mr Hunt said.

"If all we have is 16 days of fantastic TV entertainment for the Olympics and 12 days of fantastic entertainment of the Paralympics, it would be difficult to argue that it was money well spent. We have to make it do much more than that. It is London hosting the Games, but it is the whole country that's paying for them," he said.

Claims of belt-tightening were undermined last week after it was revealed that seven ODA directors were in line for bonuses of £48,000 on top of pay packets worth up to £372,000.

Charlie Tims, of the think-tank Demos, who has closely examined the London bid, was sceptical about the legacy plans. "Free access to swimming pools for under-16s and over-65s has been shelved. I suspect other things will be too. I don't really understand why they're doing some of these cultural things as I can't see how they're going to have a real impact. Inspiring people to be more active and expecting it to happen is unrealistic; it hasn't happened in other host countries," he said.

One Australian study found little change in participation in the wake of big sporting events, with many Olympic sports showing a decline. While all host cities, governments, and sporting governing bodies claim that increased grass-roots participation in sports is an anticipated legacy of the Olympic Games in order to "muster public support" and "justify the expenditure of public funds", such claims should be exposed to rigorous testing, the report's authors said.

Sport England remains optimistic that participation will increase. "No other host has achieved this and we know we're up for a challenge," a spokesman said. "We are investing money in sport, we are making sure people have a good experience, because that's the only way to make sure they keep coming back." But critics say Sport England's efforts will be undermined by the Education Secretary Michael Gove's decision to cut the Building Schools for the Future programme. Besides hitting 700 school projects, this will also affect dozens of swimming pools and sports halls.

Matthew Sinclair, of the TaxPayers' Alliance, said: "The question to ask is: what kind of legacy and at what cost exactly? There's scarcely enough money anyway, especially for a major investment such as this. It is an imposition on taxpayers. They have struggled with finding private-sector investment, and I think that's just one thing that shows this has no long-term value. Will we wake up with the hangover of a financial headache, as so many other places have? It's a strain on Lottery funding, it's a burden on the Greater London Authority and central government. Will these Games be remembered as leaving a legacy, or as a financial burden?"

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