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London scales back Olympic plans on credit crunch
(Agencies)
Updated: 2008-10-15 11:21 ECONOMIC DOWNTURN The economic downturn could allow the government to play "hard-ball" with the IOC over the scale of the Games and the contractors over price, Higson said. Steel and commodity prices are falling and labour costs may no longer be at such a high premium, he added. The professor pointed out that the Olympics provides an opportunity to energise the labour market. "We do not know what the real impact of the credit crunch will be with the economy, though past experience shows it will be severe, but you could argue it is the classic prescription for Keynesian economics -- large public work projects at a time of unemployment." The Greater London Authority has escaped the banking crisis in Iceland, unlike dozens of other British local councils. But the Metropolitan Police Authority said it has 30 million pounds of deposits in a collapsed bank, though a spokesman for the Metropolitan Police said security at the Games would not be affected. The operational cost of the Games is to be met by a private sector budget of two billion pounds, 650 million of which is to come from London's domestic sponsors. The London Organising Committee of the Olympic Games (LOCOG) said companies had not been put off by the credit crisis, with more than 400 million pounds having been raised so far. "Since Beijing there has been a large amount of interest," a spokeswoman said. "Companies have seen what a positive impact the Games can have on a country." One of its Tier 1 sponsors is Lloyds TSB which on Monday said it would take billions of pounds of taxpayers' money in a government financial bailout. It said the current financial environment "reinforces our commitment" to the Games. |
