50,000 jobs? Treat our projections 'with caution’ - LDA
During his recent foray into East London with the cabinet Gordon Brown once again played up the job benefits of the Olympics saying "Thanks to the Olympics, thousands of jobs are being created and protected in some of the industries worst hit by the recession - and in some of Britain's most deprived areas." Back in January he claimed the 2012 Olympics would create 50,000 new jobs, a considerable advance on the Compulsory Purchase Inquiry in 2006 when the LDA was saying there would be 6,000 net new jobs arising from the Olympics. With a budget of £9.34billion and rising, along with more spending to come after the Games, there should indeed be some new jobs, but specifically how many, in what employment sectors and how many would have been created if the Olympics hadn’t happened? I decided to ask some Freedom of Information questions to see if the LDA could be more specific.
Olympic agencies now claim there will be up to 10,000 long term jobs on the Olympic Park following on from the Games, 4,000 up on the original 6,000 mooted in 2006. I asked the LDA to specify in which sectors they expected these jobs to be created. In its first, very limited, response (see attached FoI response 367) the LDA listed a number of possible sectors. In a more detailed reply (FoI 384) it stated ‘it is not possible to specify the precise number of jobs that would be created for each of these areas’ and the LDA is not ‘at this stage able to ascertain how many jobs created for the Olympics will carry on after the Games are over.’
So the LDA is unwilling to chance its arm at actually pinpointing where the new jobs will be created. I would have thought it should be possible to work out, for example, how many staff will be needed to administer and maintain the surviving sports facilities and the park. As the LDA is so cagey plainly its guesstimate of 10,000 jobs has to be treated with considerable caution.
But then the LDA undermines its own 10,000 guesstimate. In its FoI response 367, the LDA said ‘this figure of 10,000 new jobs represents twice the level of employment in the area prior to the preparation of the 2012 Games.’ So the claim of 10,000 ‘new’ jobs actually represents a net gain of only 5,000 jobs as, of course, 5,000 jobs were lost when the businesses were relocated. Moreover, in its response 384 the LDA is more specific and refers to the potential to create 9,400 jobs in the Olympic Park which means a reduction in the net gain to 4,400 jobs. The LDA has already acknowledged that 4,964 jobs were lost to the area in the relocation of businesses. So rather than 10,000 new jobs the LDA is now down to 4,400 and has lost around 1,600 of the original 2006 figure of 6,000 ‘new’ jobs on the Olympic Park.
Regarding the projection of 50,000 (or 45,000/44,400) permanent new jobs, a total which includes the 10,000 (or 5,000/4,400) new jobs projected for the Olympic Park, the LDA states in response 353 that it is ‘important to note that the figure is an estimate based on potential land use, and that the development of this land will take place over a 20-30 year period and over several economic cycles.’ So this projection for job creation covers a period up to 2032 or 2042 and ‘several’ economic cycles. It is difficult to see how it can be claimed that jobs created over such a long period of time can really be claimed as a by-product of the Olympics.
The LDA goes on to provide a health warning for its own figures saying ‘predicting precise employment impacts over an extended time period, particularly given the current economic conditions, is difficult. The projections should therefore be treated with caution...’ The LDA also considers it necessary to repeat the warning elsewhere ‘Predicting precise employment impacts and outcomes over an extended period, particularly given the current economic climate, is problematic. As such, the figures should be treated as guidance only.’ Well that’s fair enough. But then why should we pay any attention to these totals in the first place?
In fact new jobs are being created and job creation programmes are being initiated in the Lower Lea Valley regardless of the Olympics, except they don’t have a £9.34 billion plus price tag. One figure the LDA came up with in its response 362 was that its projects had secured ‘6720.5 jobs creation outputs’ in the four Olympic Boroughs since 2003. This is not the total claimed for job creation in these Boroughs. 6,700 jobs created in 6 years would equal around 33,500 jobs over a 30 year period in the wider area of the four Boroughs. A quick tour around the Olympic Park will indeed reveal a number of large new plants which have opened up recently including Mercedes Benz, Kesslers, Guardian print works and FedEx amongst others.
Another set of figures features in a 2005 study for the LDA by Hunt, Dobson, Stringer (page 65, LLV Socio-Economic Strategy) completed before the 2012 bid was successful. This report considered 43-48,000 jobs could be created in the Lower Lea Valley area, including Stratford City, and this could increase to over 61,000 when the Royal Docks area was taken into account. No reference is made to Olympic Legacy facilities when calculating these figures. As has been pointed out several times on this site’s pages Stratford did already have a very substantial redevelopment programme which, it was claimed, would produce 35,000 new jobs, far more than originally claimed for the Olympics.
In reality the creation of jobs in the Lower Lea Valley, supposedly as part of the Olympic Legacy, over ‘a 20-30 years period’ and ‘several economic cycles’ will require further investment over and above the Olympic budget. As can be seen from these pre-existing projections and other job creation programmes none of this requires the Olympics for it to occur. Indeed taking existing economic circumstances into account it is impossible to know whether any of these projections will be realised, as the LDA itself warns.
Before reaching for the holy grail of regeneration it has to be asked how these job projections are created. As the LDA states, these figures are simply ‘an estimate based on potential land use’. In other words, jobs can exist because there is adequate floor space or available land. It is claimed the regeneration of the Lower Lea Valley will reduce levels of unemployment and deprivation among the existing population. However, the redevelopment programme is relentlessly anti-industrial. In light of this Gordon Brown’s assertion that because of the Olympics ‘thousands of jobs are being created and protected in some of the industries worst hit by the recession’ is simply bizarre. The relocation of businesses for the Olympics meant local people lost jobs, mainly in industry, which fitted the skills of local people. The new jobs are likely to be in sectors which do not match their skills. Moreover, as has been the experience of other Olympic cities, rents are likely to rise so that many local people will also find it harder to live in the area where these ‘new’ jobs will be located.
Comparisons can be made with the development of the London Docklands. Far from meeting the needs of existing residents the Olympic programme may actually make things worse for local people. The LDA and others have made much of the deprivation indices for the area claiming that the Olympics will bring a great change. Indeed, this may be the case as new people move into the area to take up whatever jobs are created. However, statistics and other lies can hide a host of inequalities. It is likely those local people still in the area will not feature in these improvements, which was indeed the experience of those living in Docklands where unemployment among local people actually rose as the area was handed over to new commercial interests. In reality most of the jobs ‘created’ in the Docklands had simply been relocated from other parts of London.
Local people and companies are already being excluded from the present construction bonanza. In an article by Kaye Wiggins in the Third Sector magazine, 7 July 2009, social enterprises in the East End complained the ODA only recognises large organisations. Christina Costi, managing director of E-employ, a social enterprise in Bow which trains construction workers and matches them with jobs is reported as saying "It's easier for the ODA to work with a few big agencies than to invest in smaller community enterprises." Caroline Walker, manager of Growing Concern, an east London-based social enterprise which provides grounds maintenance and soft landscaping services said "We have low overheads so we would be able to carry out the work cheaply, and we reinvest our profits in running classes training local people, so we provide a community benefit, but from the ODA's perspective, we're unknown and unreliable. For them, we're just not big enough to get involved." An ODA spokeswoman, in typical doublespeak, stated that the organisation actively encouraged social enterprises to apply for tenders, but that it had strict targets to meet and could not work with groups that were unable to meet the criteria specified in its contracts.
When considering the reliability of the Olympic claims it is instructive to read the confident assertions about the continued growth in jobs in the 2004 London Plan. The authors declared on page 27 ‘Deeply rooted changes in international and UK economies and society have led to the persistence of strong structural trends over a period of three decades; the central forecast for the purposes of this plan is the continuation of these trends.’ This assertion is followed by graphs predicting uninterrupted growth in employment in London, particularly in finance and business services, despite the fact that overall employment was actually below the level thirty years earlier! Of course, the ‘deeply rooted changes’ have not continued, as the report had confidently forecast, nor have the ‘strong structural trends’ persisted.
The success of job creation schemes has to be set against the cost of the schemes and whether these jobs could have been created more cheaply by other means. The Olympics, at £9.34billion and rising, is an extremely expensive way to create jobs. The net number of new jobs claimed for the Olympic Park is not 10,000 but closer to 4,400. That figure of 4,400 is, anyway, a guess. The surviving sports facilities will, like the Dome or facilities in other Olympic Parks, require further subsidies making those jobs even more expensive to create and sustain. The claim of 50,000 jobs, which in turn will require further investment and management, matches similar totals already in existence for job creation in the Lower Lea Valley regardless of the Olympics and without its costs.
Whether these jobs will actually materialise is entirely uncertain as the claims are speculative and it is impossible to know what will happen over a 20-30 year period, as the LDA itself admits and as Lord Coe stated in his evidence to the CPO Inquiry when he said it was impossible to predict what the economic situation would be in 2012. More than a generation will pass, whereby those born in 2012 could be thirty years old before this part of the Legacy is supposedly realised. Perhaps we can get an idea of what such a claim means if we had been told that new jobs created in the White City/Shepherds Bush area in 1978 were a consequence of the 1948 Games.
Submitted by Julian Cheyne on Thu, 10/09/2009 - 18:41.