Saturday, November 10, 2007

Conflagration In Glasgow


So, many congratulations to Glasgow.

And many commiserations to Scottish taxpayers.

The official line is that it will cost taxpayers £288m, 80% coming via the Scottish Executive and 20% via Glasgow City Council. But of course, just as with the wretched 2012 Olympics, once you delve into the detailed figures you discover that's A Bit Of A Whopper.

The detailed numbers are included in the so-called Candidate City File (CCF- you can download it here, but be warned it's a big document). And just as with the Olympics, it comprises two components: the headline budget for the Games themselves, and the "hidden" budget for the associated infrastructure.

The headline budget projections are set out in the following table:

There are three points to highlight:
  • Total projected cost- £344m, all of which is underwritten by taxpayers

  • Baseline taxpayer contribution- £288.3m: under no circumstances will it be less than this

  • Sponsorship- £23.5m: assuming it all materialises, which has not been the case with the Olympics

The Big Numbers are in the hidden budget- the cost of associated infrastructure- which totals £2.5bn:

Now you may be asking why this huge outlay- virtually all of which will come from taxpayers- is not mentioned along with the much smaller £288m headline cost?

Doubtless the organisers will say it's because this spending would have taken place anyway, irrespective of winning the bid (just as they argue with the Olympics). But if that's the case, why include it in the bid submission?

The truthful answer of course, is that most of this spending would not be taking place without the Games (eg the £239m earmarked for additional sporting venues, or the £229m budgeted for the Commonwealth Village). And even that which would have happened anyway will now be accelerated to meet the Games deadline, with all the attendant risks to budgetary control.

So to summarise, the total projected cost of Glasgow's Commonwealth Games is £2,887.6m. The entire amount is underwritten by taxpayers, and the only external sources of funds so far identified amount to £55.8m, including all local sponsorship, all ticket sales, and a £12.1m contribution from the Commonwealth Games Federation.

Plus of course, all our experience tells us that £2.9bn budget is most unlikely to be robust. Just to take three of the factors that have ballooned the London 2012 costs: first, we have no idea what contingency reserve Glasgow has included- the bid document doesn't mention it; second, their figures make no allowance for inflation; and third, the £26m for security looks pretty light compared to the many hundreds of millions now factored in for 2012 (IIRC Glasgow Airport specialises in conflagrations of its own).

Oh, and one last thing. Earlier I said commiserations to Scottish taxpayers. That should of course have read English taxpayers, who as we know, are Scotland's funders of the last resort.

Well, and the first resort, come to that.

Sorry about that.

PS There is an anti-bid blog, which hopefully will now keep going as a cost watchdog. It's called Don't Back The Bid, and it's written by Burt Shane.

PPS Just so we know, this is what the Bid Document says about the principle security threat:
"The UK Government’s Joint Terrorism Analysis Centre (JTAC) presently assesses the threat from religious, political or ethnic groups within Scotland as low. No domestic extremist group currently has the capability or intention to carry out a terrorist attack in Scotland." (Vol 3, Theme 11) So who were those guys at the airport, again?

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