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Was Boris right to pass on hosting the Grand Depart in London?

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It’s been interesting to watch the discussion around Boris’ decision not to host the Grand Depart.

Many factors will have played in to the decision but in the end, in the absence of central government support, the GLA clearly felt that there were better ways to spend a limited transport budget.

Some of those unhappy with the decision have trotted out the usual kind of numbers about the boost to the London economy that would be delivered by hosting this event. But as our report last year made clear, Boris is right to be wary about claims of large local economic benefits from hosting one-off sporting events. When we reviewed the available impact evaluations of similar events we concluded that effects on the wider economy – at least in terms of increased employment or income – tend not to be large and are more often zero.

Of course, these events draw huge number of spectators. So our conclusion on local economy impacts comes with two important caveats.

First, we need to do much more to understand the local benefits from increased visitor numbers. Unfortunately, we found no high quality evaluations on this. As we argued, far more should be done to assess the extent to which projects lead to net increases in visitor numbers for the area as a whole. Visitor numbers for the project alone and surveys of attendees, (asking them about spend, motivation for visit etc.) do not provide strong evidence on the overall impact of projects (since, as we saw with the 2012 Olympics, some people stay away during big events (£). For example, spectators would have been doing something else (e.g. visiting another attraction, shopping, working) then we need to net out those effects. The same goes for international visitors (who may change the timing of their visit, or may simply displace other foreign tourists uninterested in cycling who would have come if hotels hadn’t been full and prices higher). Finally, we need to think carefully how to go from any net additional spend in the area to increased local employment and incomes. Much of this additional revenue will leak out in the form of payments to non-local suppliers or even the taxman.

Second, we shouldn’t ignore the fact that sports events such as these have intrinsic – non-economic – value to people and places as well as hopefully promoting health and wellbeing. As the recent evaluation of the Tour De France stages held in Yorkshire made clear, these benefits may be big, and deemed by local leaders to fully justify the decision to subsidise an event. It’s also possible that in some places (like London) it’s felt that the overall costs outweigh these benefits while in others (like Yorkshire) the reverse is the case – especially, as is likely, where local costs differ and where local decision makers place different emphasis on different benefits. In London’s case, Boris had to trade off spending on the Tour versus spending on local cycling infrastructure (£). Other places won’t have the same decision to make. After all, that’s one of the advantages of local decision making on these kind of projects.

The crucial point is that we would like those local decision makers to be realistic about the tendency for promoters of investment in major sports events to exaggerate the economic benefits of such projects. Perhaps Yorkshire’s focus on the non-economic benefits and Boris’ change of heart suggest they’ve been listening.