London 2012: Olympics Will Deliver £16.5bn Boost To Economy, Claims Report

Olympics 'Will Deliver £16.5bn Boost To Economy'

The Olympics will deliver a £16.5 billion boost to the UK economy by 2017 and help create the equivalent of 62,200 jobs, a new report has claimed.

The estimated benefits are from 2005, when the Games were awarded, to the five years after the Games finish, and will come mainly as a result of building Olympic sites and the boost to tourism, according to the study by Lloyds Banking Group.

Lloyds, whose Lloyds TSB is a London 2012 sponsor, said nearly a third of the gains - worth £5 billion - will come over the five years following the event, when Olympic sites are converted to other uses and tourism continues to see a boost.

And there will also be a "happiness effect" as the Games boost the public mood and spark a rise in consumer spending.

This was equivalent to a gift of £165 per person in England during Euro 1996 and it is expected to be at least as big this time around.

Lloyds chief economist Patrick Foley said: "London 2012 is the most important sporting event the UK has ever staged.

"We've witnessed a construction project on an unprecedented scale, the economic ripples of which are being felt not only in the host City, but across the UK.

"As this study demonstrates, London 2012 will help support employment, tourism, consumer spending and living standards, not only this year, but for many years to come.

"And it could not have come at a better time, given the tough conditions in the UK economy."

The Games are expected to attract 10 million visitors, including 1.2 million from overseas, but the country's tourism will continue to gain a knock-on effect over the next five years.

Games-related tourism will generate £2 billion of GDP across England, Scotland and Wales.

But the lion's share of the GDP gains will come from construction, which will have contributed £13.5 billion to GDP by 2017.

Some 57% of the overall boost to GDP stems from construction projects ahead of the Games, including building the Olympic Park and other sites across the UK.

And 24% of the total boost to GDP will come from further construction activity.

Building the Olympic Park has contributed £2.3 billion to the economy and building the other main venues added £1.3 billion.

But converting the Athletes' Village into housing and building retail space in the Park following the Games will contribute a further £4 billion.

London will get £6 billion of the overall benefits but the rest of the UK will get £10.5 billion.

Of the 800 construction-related contracts awarded by the Olympic Delivery Authority to UK suppliers, a quarter went to firms in London with the remainder to firms outside the capital.

Small and medium-sized enterprises were set to account for more than half of the overall growth.

John Maltby, commercial group director at Lloyds, said: "The London 2012 economic engine is being fuelled by thousands of small and medium-sized businesses, many of whom are based outside London in towns and cities that might otherwise have assumed they had nothing to gain from the Games.

"We know that these businesses hold the key to growth, and even if it is still uncertain whether London 2012 can help to kick start a sustained economic recovery, the benefits to businesses are clear."

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