Playing the long game

Atkins | 15 Sep 2010 | Comments

The success of the London 2012 Olympic and Paralympic Games will be about more than ticket sales, visitor numbers and medal counts. These may be world-renowned sporting events, but organisers will also want to see a long-term return on what will have been a billion-pound investment.

“London 2012 is all about legacy. Its greatest legacy will be in the continued regeneration of East London,” says Keith Clarke, Atkins chief executive. “It will be a blossoming, diverse, inclusive new business opportunity for London. The timescale for those new businesses is uncertain – for example, it’s difficult to predict the rate of growth – but the infrastructure is in place and the context set. New and extended transport links will have been tried and tested during the Games, as will any upgrades to local utilities, and the terrain will have been given a much-needed facelift. In terms of removing barriers, you couldn’t really have a better chance.”

Such a verdict may seem optimistic, of course. In many ways, the scenes of jubilation as London dramatically pipped Paris to the post of Olympic glory back in July 2005 seem to belong to a different age. We now live in a world of banking crises, a global recession and a burgeoning debt burden, and a new era of austerity that has been making headlines on a daily basis for the latter half of the decade.

Yet that optimism persists – and in some ways, this is essential. The total budget for London 2012 of some £9.3bn has not been ring-fenced from the new coalition Government’s cost-cutting plans. The initial £6.2bn in public spending savings announced in the weeks following the election included cuts of around £27m from the sporting spectacle itself.

And with people up and down the country bracing themselves for a general tightening of the belt, Olympic authorities are demonstrating both an efficient investment and ensuring return on investment. It’s not just about making Britain proud when London 2012 finally arrives. The event needs to provide a tangible and sustainable lasting legacy for the London of tomorrow – its businesses, environment, biodiversity and local communities.

Promises, promises

Two years after winning the bid, in July 2005, the then Labour Government acknowledged and articulated this aim. It made five legacy promises for the cultural spend. In addition to the aspirational transformation of the country into a world-leading sporting nation, using the project to inspire a generation of young people and boosting the UK’s desirability as a business destination, it specifically pledged to transform London’s East End, the site for the new Olympic Park.

It would also make that Park a model of sustainable living, embracing renewable sources of energy and advanced construction practices that could showcase the long term potential of an increasingly low carbon way of life.

These were ambitious plans and it was essential to monitor delivery as the first signs of the new structures – the Handball Arena and Aquatics Centre – began to materialise. In May 2009, therefore, just after the halfway point between London winning the Games and the eventual arrival of the Olympic torch, the UK Government established the Olympic Park Legacy Company (OPLC) to ensure its regeneration promises were properly honoured. It is the first time a host country has had a legacy company in place before the start of the Games.

A few months later, the Mayor of London Boris Johnson added to the momentum. He unveiled his ambition to bridge the socio-economic divide between the five host boroughs – Greenwich, Hackney, Newham, Tower Hamlets and Waltham Forest – and the rest of London by 2030.

John Armitt, for one, is confident the country will be pleased with the long term legacy of the Games. The chairman of the Olympic Delivery Authority (ODA) points out that businesses around the country have already benefited from the award of over 1,300 direct ODA contracts as well as thousands of subcontracts through the supply chain, adding that these companies will now be able to take their skills and experiences gained and export them internationally, including for the 2016 Games in Brazil and 2014 Russian Winter Olympics (where some contracts have already been won).

He also estimates that around 75p of every one pound spent in development is on infrastructure that will be around for the long-term in one guise or another.

“There will be continued infrastructure and regeneration of the area for some years to come. We’re building 2,800 apartments for the Games and there are another 6,000 planned to be built afterwards, as well as the inevitable commercial buildings that will go up on site close by,” he explains.

“In addition to the Games themselves, we also have the Cultural Olympiad, which will encourage cultural activities in London and across the country to use the Olympics cache and put something on.”

He does acknowledge the scale of the challenge, however: “There is pressure on everyone to ensure we make the very best of this one-off opportunity and make sure those benefits are long term,” he says.

Building a legacy

The apartments Armitt spotlights are part of the Olympic Village, where the first residential block was completed in October 2009. The majority of the rest are due to be finished in 2010, alongside all the necessary utilities and supporting infrastructure such as tunnels and bridges.

After the Games, however, those apartments for around 17,000 athletes will become essential new housing for East London, including 1,380 “affordable homes” according to the Department for Culture Media and Sport’s annual report in February 2010. One of the OPLC’s stated six goals is to ensure that this housing “offers an incomparable lifestyle by blending the best of London’s housing traditions with unique access to nature and sporting facilities”.

Moreover, the construction activity has also already provided a welcome boost to employment in the area; an essential factor for the economic growth needed for true sustainable regeneration. Over 9,000 people were employed on the Olympic Park and Olympic Village sites at the close of 2009, with 21 per cent of the workforce resident in one of the host boroughs that are intended to benefit the most. Over 10 per cent of the workforce in the Olympic Park had previously been unemployed, against a target of seven per cent.

“It’s important to remember that there is a brilliant service sector opportunity here,” says Heather Hancock, 2012 lead partner at Deloitte, the business advisory firm and the official professional services provider for the Games and supporting the OPLC.

“From the architects and the development managers delivering facilities to the businesses supporting transport systems and the whole creative sector, the excellence of the UK’s services and advisory sector is also being showcased.

“Given the economic situation, we see the Games really powering up business and wider society, giving the country a positive focus to rally around that will also enhance confidence and commitment,” she adds.

Indeed, Deloitte published a report in February 2010, coinciding with the Vancouver 2010 Winter Games, detailing how such major sporting events can serve as a catalyst for improving national competitiveness. Among those positives, it identifies the breaking down of barriers between the private and public sectors and within government, and establishing new models of industry best practice, such as in environmental sustainability and community involvement.

In Canada, for example, organisers asked visitors to the Games to buy carbon offsets to make up the estimated 268,000-ton total carbon footprint that includes travel emissions. The UK is also looking to offset. In November last year, Her Majesty the Queen planted the first of 4,000 trees to appear in the Olympic Park before the Games.

Safe and sound

Another area the report singles out is the investment in security arrangements that such an ambitious project inevitably spurs. Few could forget that just a day after learning of its Olympic bid win in 2005 London was subjected to a devastating terrorist attack on its Underground network.

“A critical role for the Government is keeping people safe,” says Deloitte global public sector industry leader Greg Pellegrino. “With time, money and effort, overall security can have a positive and lasting impact on the athletes, spectators, international organisations, and the host itself long after the event finishes.”

The UK Government has now endorsed an overall “Safety and Security National Concept of Operations”, which is a detailed account of how security will be managed before and during the Games. The new coalition may be committed to scrapping ID cards, but the brainpower behind staging the Olympics is sure to be useful in London’s future security strategies.

Then there is the public transport network itself, expected to swell to approximately 800,000 people on the busiest day of the event. Some 25,000 of them can be transported to and from Stratford International Station every hour on the new Javelin train, which is already running, while extra capacity on the London Underground and Docklands Light Railway (DLR) will ease congestion across the capital for the long term.

Similarly, the work that has gone into building a resilient communications architecture could provide a readymade infrastructure for businesses coming into the area after the Games. Duncan Ingram, who looks after BT’s London 2012 activity, cites the technology employed in the new media centre as an example.

“We’re very keen to work with the legacy bodies to look for other opportunities for the technology we have put in, and interact with the organisations who are part of that in the early stages. We want to make sure that the technology we’re putting in has an ongoing use beyond 2012, providing an economic benefit and positive legacy. After the Games, we want this to become an important part of the BT story.”

Ingram highlights the fact that the boroughs around the Olympic Park will have “superfast broadband by 2012” – giving further support to an enduring economic legacy.

But Clarke believes another long-term legacy benefit from 2012 will go beyond the physical infrastructure: the greater collaboration between contractors, consultants and the authorities, based on trust that has been built up over the last four years.

“The networks, relationships and the informal and formal collaborations that have been established during the Games can only be of huge value in the long run,” he says. “There’s definitely more collaboration and I think there is a recognition that people are looking to work in a different way.

“And whether you’re from a utility or an equipment supplier, a services provider or a construction contractor, this ability to collaborate on some of the most complicated, time-critical infrastructure programmes almost anywhere in the world is hugely exportable. We are attracting people with our can-do attitude and exporting that mentality to the broader world – and that’s very important.”

All those involved in London 2012 will have other lessons to note from a uniquely ambitious endeavour.

Correctly calibrated, these lessons could lead to even more UK assets in future – and hopefully underpin a strong and diverse economic recovery.

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