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2012 Olympics 'won't benefit' East London's poorest residents

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2012 Olympics 'won't benefit' East London's poorest residents

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Published by Jon Land for 24dash.com in Housing and also in Communities, Local Government

London Olympics 'won't benefit' East London's poorest residents London Olympics 'won't benefit' East London's poorest residents

The 2012 London Olympics will fail to leave the promised positive local legacy for the poorest residents of East London unless cast-iron guarantees are built into plan, according to a new study.

The Games have been presented by the Government and the Olympic delivery bodies as a once-in-a-lifetime opportunity to help regenerate one of the UK’s most economically disadvantaged areas, London’s Lower Lea Valley.

But the Fool's Gold report by the New Economics Foundation (nef) claims that previous Olympics and other ‘flagship’ UK regeneration projects, whilst boosting international tourism, transport, leisure and telecommunications infrastructure, have failed to improve the lives of the poorest people in host cities.

As signs of a growing global economic storm gather, the report says it will be even more important to put in place mechanisms that will guarantee a positive legacy from the games for some of London’s most disadvantaged communities.

Fool’s Gold identifies the ‘trickle down’ economics that underly the approach to regeneration at the heart of the Olympic bid as the root cause of the problem.

This assumes that investment flowing into deprived areas will stay put. In practice, as nef research has shown, it leaks out to consultants, developers and large companies which are best able to exploit new commercial opportunities.

Small local enterprises are unable to compete and local people who don’t own their own homes are priced out of the housing market because gentrification inflates the cost of living well above their income levels.

Fool’s Gold identifies clear warning signs that London 2012 may be going in the same direction as previous Games in its failure to live up to regeneration promises:

The enormous debts built up by Olympic delivery will have to be repaid, and the easiest way to do this will be to sell off Olympic land to the highest bidder.

Serious doubt has already been cast on the projections used by the Government to calculate the £1.8 billion to be raised by land sales after the Games to repay public and National Lottery money used to buy land for the Olympic site.

A problem the current slowdown in the housing market will only accentuate, placing yet more pressure on the London Development Agency to maximise revenues.

Of around 500 contracts already awarded, worth £1 billion, only 11 per cent have gone to companies based within the five Olympic boroughs. Many procurement contracts for the Games are so large that they are impossible for local small and medium-sized enterprises (sMEs) or social enterprises to compete for against national or multinational firms.

Strict branding rules prevent local community organisations leveraging value from association with the Games. Major sponsorship contracts have already been secured by familiar multinational firms. These firms are under no obligation to subcontract with locally based businesses or to employ local people.

Josh Ryan-Collins, nef researcher and co-author of the report, said: “Urgent action must be taken to prevent the communities of East London being trampled in the Olympic gold rush.

"The regeneration legacy was not just an enlightened addition to the Games’s plan which would be good to achieve if possible. It was central to London’s original Olympics bid.

"Promises and undertakings were made in the bid on behalf of the city and the nation; these must be achieved if we are all to keep faith with the assurances made to the world on our behalf.”

But Fool’s Gold claims an alternative is still possible if action is taken now, an alternative which can avoid the mistakes of similar investment projects in the past.

As the report shows, there are many examples of how community benefits can be built into major procurement projects, and alternative models of community ownership which guarantee long-term community benefit.

Fool’s Gold sets out a ten-point rescue plan, which, if acted on now, could help to ensure that East London isn’t trampled in the Olympic gold rush:

  • Make community benefit a key criterion for all new contracts: Olympic bodies should incorporate community benefit and the regeneration objectives of the local authority as part of existing ‘Balanced Scorecard’ criteria in awarding all contracts.
  • Make contracts accessible to local SMEs and social enterprises: The Olympic Delivery Authority (ODA) and other Olympic authorities – as well as the main contractors – should break down the size of future contracts so that local SMEs and social enterprises have a realistic opportunity to compete.
  • Appoint a new Board position on the Olympic and Lower Lea Valley planning boards for the local voluntary and community sector. This would give a genuine voice in the Olympic Legacy Planning Master Framework to disadvantaged local residents.
  • Establish an asset-holding organisation for the Olympic legacy. This organisation should play a transitional ‘care-taking’ role to ensure ownership of assets devolves to the local community. Guided by a cohort of community-led organisations, this organisation could develop plans for long-term community ownership of the community facilities on the Olympic site through a community development trust.

“The Governments clear inability to manage the budget for the 2012 Olympics means that there must be safeguards in place to ensure that the family silver isn’t, quite literally, sold from under the feet of East Londoners once the games are over to pay back the huge debts accrued in Olympic delivery,” said Paul Sander-Jackson, head of Thriving Communities at nef and co-author of the report.

Less than one-third of the total regeneration package for the Lower Lea Valley – about £500 million – could endow 500 locally controlled community development trusts with £1 million each.

According to the Development Trusts Association, this would provide them with a long-term income of £60,000 per year to underpin their activities as community-anchor organisations investing in solutions which meet locally identified needs.

If the financial returns from the Olympics assets are used in this way, it could have an enormous impact, locking in the value of investment for local communities, ensuring that it was be safeguarded for the communities of East London for generations to come.

East London includes some of the most deprived areas of the country; it is also home to many enterprising small businesses, social enterprises and community anchor organisations, as well as vibrant communities who have come to the UK to make a better life for their families.

If the wealth creation the Games will deliver can harness and underpin this enterprise and energy, rather than displace it, then the regeneration aims that were so integral to the 2012 bid might still be achieved.

The Fool’s Gold report has been published by the New Economics Foundation and Community Links, funded by the East Foundation.

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