Yorkshire companies fail to cash in on deals for Games

The Olympic Park, in Stratford, east London
The Olympic Park, in Stratford, east London
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HOPES of an Olympics inspired economic legacy for Yorkshire have been shattered after it emerged the region’s businesses secured little more than half a per cent of the £6.9bn on offer.

The Olympic Delivery Authority (ODA) has released final details of the companies that secured Tier One contracts – the deals that directly supply goods, work or services for the event.

It claims that Yorkshire firms secured 47 contracts – 2.9 per cent of the 1,604 on offer – worth £89m, around 1.3 per cent of the total fund.

However a Yorkshire Post investigation has revealed that many of the companies listed as being from the region are in fact national or global businesses that happen to have a regional office in Yorkshire, including BT, British Waterways, or global professional services firm Turner and Townsend.

The ODA admitted that its breakdown of where the money was spent was based solely on where the payee address was, not where the work was carried out.

A number of companies have confirmed that their contracts were in fact London based, with no more than £46m actually being invested in the Yorkshire economy – little more than half a per cent of the total fund.

Among the “Yorkshire” contracts was a £21m deal with Cofely East London Energy Ltd for the Olympic Park Energy Centre in Stratford and a £15.6m British Waterways contract for the white water centre at Stockton Tees.

A £6m contract was won by global professional services firm Turner and Townsend – work that was actually undertaken by their London office – as was the £1.6m contract for global law firm Eversheds.

Robert Oxley, Campaign Manager of the TaxPayers’ Alliance said: “The admission that these figures simply reflect the addresses to which the ODA is posting its cheques hugely undermines organisers’ claims of the Olympics benefiting places like Yorkshire.

“It appears that London 2012 bosses are more concerned with spinning the supposed economic boost of the Games rather than focusing on delivering value for taxpayers’ money from an event already way over budget.

“All taxpayers are forking out for the Olympics, yet the lasting benefits outside of London appear to be even smaller than people were led to believe. Games organisers should come clean about the real costs and benefits of the event rather than fighting a PR battle on misleading numbers.”

The ODA also estimates a further 50,000 supply chain opportunities have been generated, stating that around 230 Yorkshire firms have benefited although details have not been made available about the deals. The 230 contracts would represent fewer than one per cent of the total supply chain work available.

The ODA defended its actions, stating the focus was “boosting employment in every part of the United Kingdom”.

A spokeswoman said: “Our data reflects the addresses given by our Tier One contractors for payment purposes – although clearly in very many cases this will be the same as where contractors are based.

“In a globalised world, fewer and fewer companies operate in just one area.

“Companies based in Yorkshire have sub-contracted work to those in other parts of the UK, in exactly the same way that Yorkshire companies are benefiting from contracts won by those registered elsewhere.

“Our priority was to get the job done and bring as much employment and income to every part of the United Kingdom as we could.

“Millions of pounds worth of contracts, in Yorkshire and elsewhere, testify to that success.”

The revelations will be somewhat embarrassing for the Government and Olympics bosses, who have repeatedly spoken of a national rather than London legacy.

Charles Allen, head of the London 2012 Nations and Regions Group, said in 2009 during a visit to Dalby Forest that the Games was an “amazing opportunity for Yorkshire to take its lion’s share and thousands of new jobs will be created”.

And in a speech last week Prime Minister David Cameron praised firms in the East Midlands for winning contracts worth £360m – however, if the same formula was used for that regional breakdown as the Yorkshire figures it would raise questions about the accuracy of that total.

Yorkshire Gold, the organisation responsible for delivering an Olympic Games legacy in the region, insisted Yorkshire would enjoy considerable benefits from the games.

Spokeswoman Julie Gatenby said: “Yorkshire is hosting 35 international camps and is home to seven Team GB squads many of whom are choosing to stay in the region right up until the Games.

“The legacy – not only for the cities involved but for the region as a whole – is that we continue to grow our reputation as a first class destination to train elite athletes and bring on new talent.

“The camps have opened up new business links and tourism opportunities with new markets which in this economic climate is vital.”