Tuesday, July 13, 2010

Olympics 2012 - wouldn't broadband investment provide a longer legacy?


Culture Secretary Jeremy Hunt's most recent blog post raises some interesting question marks over the government's priorities  in advance of the much-anticipated industry event being held by Broadband Delivery UK later this week.

The post reports on a meeting between Jeremy Hunt and film-makers Danny Boyle and Stephen Daldry, who are responsible for the ceremonies that will accompany the 2012 Olympics, the opening ceremony in particular:
"They are still in the very early stages, but I was encouraged by what I heard: Danny talked about a ceremony which was both spectacular and "with a heart." Both were acutely aware of the challenge of presenting Britain's remarkable history, its vibrant cultural present and its future in a way that manages to make us proud without being in any way jingoistic. In other words tapping into that sense of understated British pride which we all intuitively understand but find it hard to put our fingers on. Seb Coe and Paul Deighton, Chairman and Chief Executive of the London Organising Committee, were also there. They are right to have chosen film makers for this epic challenge - it will need someone with an eye for what will look good on TV screens across the world. Stephen and Danny are the best we have and so if anyone can pull this off they can."
Something created by film-makers that looks "good on TV screens across the world" is unlikely to be a low-budget affair. I would imagine that the cost of the opening ceremony alone will be significant. The costs of staging the games have been widely reported; this from a House of Commons Committee of Public Accounts report on the budget for the games, published in March 2008:
"After London was awarded the Games, the Department for Culture, Media and Sport and the Olympic Delivery Authority reviewed the cost estimates and in March 2007 announced a budget of £9.325 billion."
And from the official London 2012 site:
“The London 2012 project is delivered by two key organisations - one private, one public. The London Organising Committee of the Olympic Games and Paralympic Games (LOCOG) is the private sector company responsible for staging and hosting the 2012 Games. It has a £2bn budget, with almost all of it to be raised from the private sector...The Olympic Delivery Authority (ODA) is the public sector body responsible for the delivery of the new venues and infrastructure required for the London 2012 Games. The ODA budget is drawn entirely from the public sector. The ODA is funded by the Department for Culture, Media and Sport, the Greater London Authority, the London Development Agency and the Olympic Lottery Distributor...£2.2bn of National Lottery funds are helping to create the facilities to host the Games, providing a long lasting legacy for the people of east London and the wider UK.”
Recent coverage has focused on the amount that the Olympics budget will be reduced as part of the current programme of cuts; this from the BBC on 24 May 2010:
"The government has announced that £27m is to be cut from the 2012 London Olympic budget. The decision is part of the £6.2bn of savings in public spending announced by the Conservative-Liberal Democrat coalition on Monday."
Which, as a proportion of overall expenditure, amounts to a cut of just under 0.3% if my maths is right. What's interesting about all of this is that the overall budget of £9.325 billion is significantly more than the Broadband Stakeholder Group's September 2008 lower estimate of the costs of deploying next generation access:
"...national deployment of fibre to the cabinet (the cheapest technology option) would cost £5.1bn – this is three or four times more than the telecoms sector spent deploying today’s broadband services. Taking fibre to every UK home (using point to point fibre – the most expensive technology option) would cost as much as £28.8 bn."
I wonder what the legacy of the Olympics will be, in comparison with the impact we know rolling out next generation access would have on the economy and society as a whole? Returning, to Jeremy Hunt's blog, my guess is that the cost of the opening ceremony alone will eclipse whatever funds he announces in support of NGA on Thursday. 

There are a couple of postscripts to this, as it's only fair to acknowledge that the bid for the Olympics was made in much more affluent times. And I'm sure the successful bid was followed by a range of contractual commitments which would be difficult to change. But shouldn't the sea-change in financial circumstances since nevertheless necessitate a re-think and re-prioritisation? Broadband investment is a much higher priority in every other country's recovery plan it seems. It's also interesting that "£2.2bn of National Lottery funds are helping to create the facilities to host the Games". This for an infrastructure project intended to provide "a long lasting legacy for the people of east London and the wider UK".

I would argue that the legacy of broadband investment would be more powerful still, so why aren't National Lottery funds being considered as part of the potential funding mix for NGA and universal broadband service? If the Olympics is an infrastructure project, then as sure as eggs is eggs broadband development is too. I know there are barriers to use of lottery funds in such a way, but surely this is something that should be considered - if it can be done to support the Olympics...?

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