Steve Richards: We are going to waste huge amounts of money on the Olympics. I'm delighted...

Voters fume. Parts of the private sector rub their hands with glee. Politicians protest about rising costs
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The Independent Online

After the party we get the hangover. When London won the battle to stage the Olympics most of the country went wild with excitement. No politician dared to raise private doubts. No newspaper risked losing sales by questioning the euphoria. For once, the UK had won a global contest. As a bonus, it had beaten the French. That was enough. It was time to dance.

As we danced, everything was fleetingly different. In the current anti-politics climate, normally any event involving elected politicians is treated with extreme suspicion. Yet in the case of London's victory, we leaped to the other extreme. Fleetingly there was virtually no sceptical questioning. Earlier this week, the Secretary of State for Culture, Tessa Jowell, revealed the costs for staging the Olympics were revised within days of the triumphant announcement that London had won. No one noticed.

In the giddy excitement there was no mood either for reflections on Britain's poor record in relation to major infrastructure projects. Nor were many questions raised about the agile ability of the private sector to take the government for a ride when bidding to win contracts.

In this case, the ride will be spectacular. The staging of the Olympics is a deadline that cannot be moved. Unlike the interminably delayed and hugely expensive Wembley project, where cup finals can be staged elsewhere, or on the privately run parts of the London Underground, where travellers can turn up late for work physically wrecked by their tortuous journeys, this event must turn up on time. If deadlines are not met, the Government will have no choice but to step in and pay more. I have no doubt it - and we - will do so. Probably the costs of the entire project will be closer to £15bn.

Already there are signs that the costs are turning other parts of the UK against London. A BBC Radio 5 Live phone-in yesterday was inundated with callers from outside London protesting that a privileged capital will be getting more public money in the next few years. The view is nonsense. London generates wealth that the rest of the country benefits from and parts of the city have pockets of poverty that are as bad as anywhere else. The perception, though, is what matters, making the politics of the Olympics dangerously awkward. As a doublewhammy, some Londoners are getting restive too. They will be paying slightly more on their council tax and that is enough to get some of them going.

Voters fume. Parts of the private sector rub their hands with an unappealing glee. Politicians protest about escalating costs. Now it is difficult to find high-profile figures willing to speak in favour of what is going on. The dancing has stopped.

Yet these negatives point to an alternative narrative. It is because politicians are normally too scared to invest in big projects that the Olympics are necessary. Briefly a miracle occurred. In the summer of 2005, the country cheered at the prospect of a public enterprise that would cost a lot of money. Huge sums will be wasted in the staging of the Olympics, but there is no other means to get people to enthuse about public projects.

The current conundrum in relation to the Olympics is similar to the rows about the Private Finance Initiative, the expensive device used to raise cash without putting up taxes. The PFI will cost future generations a fortune, but we needed the new or newly renovated hospitals on which the PFIs were spent. In a culture where higher taxes or public spending increases are regarded as a waste or destabilising there was no obvious alternative to the PFI.

The same applies to the Olympics. No one standing for election would dare to argue for increases in tax in order to regenerate run-down parts of London. Given all the irrational suspicion about public investment, they need an alternative reason. The Olympics provides the cover for projects that will transform parts of the East End of the capital and boost other regions too.

Without the prospect of the Olympics taxpayers would explode with fury at the idea that their cash should be invested on regeneration for its own sake. They will, though, be willing to pay a little in order to stage a sporting event. Some pay thousands for a season ticket to see their football club. They will pay a few pounds extra for the Olympics.

Similarly under normal circumstances the Treasury would find reasons to be mean about some projects aimed at reviving the capital. Because of the Olympics it has no choice but to pay up, which is one of the reasons why occupants of that mighty department were quietly and discreetly miserable on the day London got the games. They knew that costs would soar and that they would have to meet them. In terms of the mood music I have some sympathy with them. When it was fashionable to celebrate London's victory senior Treasury figures had to keep their heads down. Now they are starting to pay for the costs everyone else is protesting.

Still the pain will be worth it. One of the under written stories is the renaissance of Britain's cities over the past 10 years. Nearly always the revival has needed some event to focus attention. The staging of the Commonwealth games was a pivotal spur in Manchester's development. Manchester was the venue of the Labour conference in September and became its biggest star. Journalists from London raved about the attractions of what has become a major European city.

In other cases, becoming a European cultural city or staging the Tall Ships Race have been the focus of revivals. Glasgow, London, Liverpool, Newcastle and Manchester are five of the cities that thrive, partly because they have staged events of one kind or another. London will have no choice but to rise to the challenge of staging the Olympics.

In the meantime, the costs of the Olympics will soar, executives will resign and politicians will be under pressure. Expect calls for ministerial resignations before very long. Consultants will make undeserved fortunes. Reporters from around the world will speculate with good cause whether London's fragile, badly managed public services can cope with such a big event.

In a saner world it would not be necessary to get a bunch of athletes over here to achieve improvements in infrastructure that will boost the economy as a whole and improve the quality of life for some. But the political culture is far from sane. We need a sporting event in order to invest, and without one there is less hope of cash being provided. Look at the delays in relation to various transport projects not directly connected with the Olympics. Listen to the cries for tax cuts when more investment in Britain's infrastructure should be the priority.

The Olympics will be a nightmare. We should cheer those involved all the way.

s.richards@independent.co.uk

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