Government influence over the staging of the 2012 Olympic Games

The hosting of major sporting events

When a major sporting event, being held every four years, such as the Olympic Games or the football World Cup is held in a specific country there are different bodies which are involved in the hosting of the tournament or event.  These can range from the world governing body of the sport involved and the organising committee of the country where the event is being held.

The hosting of the 2012 Olympic Games

With the 2012 Olympic Games being held in London the two main parties involved with the hosting of the event are as follows: 

• The International Olympic Committee (IOC)
• The London Organising Committee of the Olympic and Paralympic Games (LOCOG)

What functions does LOCOG undertake?

LOCOG is responsible for the staging of the Olympic Games when they are held in London in 2012 whereas the International Olympic Committee (IOC) is the body which overseas every single Olympic Games regardless of where they are being held.

LOCOG is charged with delivering the best possible Olympic and Paralmypic Games for everyone who is involved with the games ensuring that a legacy has been left by the games.

What is meant by the term legacy?

The term legacy deals with the infrastructure which has been left following the conclusion of the Olympic Games or major sporting tournament.

For example if new stadiums and new transport systems are created in London for the 2012 games these will be able to be used following the conclusion for the event. Legacy is therefore a concept which deals with the benefits that the host of the event will be able to continue to use after the event has finished.

In order to create these improvements to the infrastructure in London LOCOG will be required to obtain various contracts for services ensuring that the games are delivered correctly and that they run smoothly.

Procurement for these contracts was a process which began in 2009.

Does LOCOG have any other functions?

LOCOG will also have the following functions:

• Requirement to stage a series of test events held in the year prior to the 2012 Olympic Games
• Requirement to recruit and train volunteers
• Requirement to oversee the four year Cultural Olympiad leading up to the Games

Where does the money come from in order for LOCOG to fund much of the infrastructure and operational requirements needed for the Games?

Most of the funding for LOCOG comes from the private sector with a total of £2 billion to be raised through various sources including the following:

• Sponsorship
• Broadcasting rights
• The sales of merchandise

In order to ensure that the requisite funds can be raised the London 2012 brand needs to be protected in the best way possible to stop certain practices devaluing the event. Legislation such as the London Olympic Games and Paralympic Games Act 2006 is therefore imperative to stop certain ambush marketing practices.

Does the UK Government provide any of the funding for the Olympic Games?

Some of the funding for the 2012 Olympic Games will come through public sector money via the UK Government.

Which UK Government department will be involved in coordinating the public funding for the Olympic Games?

The UK Government department which will be involved with coordinating the public funding for the Olympic Games is the Department for Culture, Media and Sport.

Is the amount to be provided by the UK Government something which has been set in stone by legislation?

There is no legislative protection for the money to be provided as funding for the 2012 Olympic Games by the UK Government. In fact none of the Sport’s budgets for the Department for Culture Media and Sport are protected by any kind of legislative instrument.

This means that if the UK Government feels it necessary to reduce public spending in relation to the 2012 Olympic Games that it is perfectly within its powers to do so.

Is there a possibility that the budget for the 2012 Olympic Games will be reduced?

According to reports the Department for Culture Media and Sport is being tasked with reducing the public spending by large sums and during May 2010 did not rule out the possibility of cutting the budget for the 2012 Olympic Games.

How does the budget for the Olympic Games currently work?

The budget for the 2012 Olympic Games has a substantial contingency fund which is the reason why the project has been able to be delivered on time and within the current budget. If the budget is cut this may substantially affect the contingency fund.

Is this a desirable position?

Some have argued that cutting the public sector budget for the 2012 Olympic Games is an undesirable position as it may well reduce spending in the immediate future but that this may well cause increased costs in the future.

The reason for this is that if less than adequate income is spent on establishing certain elements of the event this may mean that the event will run smoothly but the lasting effects of the legacy may be greatly reduced which may well cost more in the long run to fix.