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A Sporting Chance –
Ensuring London Firms Benefit
from the 2012 Olympic Games
Press & Public Affairs
London Chamber of Commerce and Industry
October 2005
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The London Chamber of Commerce provides business support services for more
than 10,000 firms across the capital, ranging in size from multi-national companies
such as BT and Thames Water to sole traders.
Without exception, our policies are always informed by the experiences of our
member companies. The objective is to ensure that the private sector in London,
which is the principal engine of the national economy, is able to operate on a level
playing field, free from unnecessary hindrance from bureaucrats and politicians alike.
It is only by putting London’s businesses first that the capital can maintain its
outstanding record for creating well-paid jobs, leading the world in service provision
and being Europe’s favourite location for foreign direct investment.
KPMG is the global network of professional services firms of KPMG International,
member firms provide audit, tax, and advisory services. KPMG LLP (UK) operates
from over 22 offices across the UK with nearly 9,000 partners and staff. KPMG
works with business around the UK ranging from the FTSE 100 to middle market
companies.
In the last year, KPMG LLP has won more than 28 awards which acknowledge our
pursuit of excellence across the firm. These include ‘Big Four Firm of the Year’ in the
Accountancy Age Awards, leading ‘Big Four’ accountancy firm in the FT’s 50 Best
Workplaces 2005 survey and ‘Auditor of the Year’ in the ‘Big Four’ category at the
Real Finance/CBI 2005 Awards. The firm was also ranked third in the ‘Ten Best Big
Companies To Work For’ category of the Sunday Times ‘Best Companies’ 2005
awards.
Alun Bowen, partner with KPMG’s middle market practice in London comments:
“Hosting the 2012 Olympics is a fantastic opportunity for London. Not only will the
Olympics be a great opportunity to increase the level of investment in London, and
enhance its reputation as a world city but it will also serve as a catalyst for the
regeneration of the Lower Lea Valley and leave a lasting legacy for the capital. In
addition, it appears that London 2012 has provided a focus for genuine team work
between the private and public sector working together to achieve the common goal
of getting things done over the next seven years.”
For further information or to discuss this report, please contact:
Dr Helen Hill, press & public affairs manager or James Ford, senior press & public
affairs executive
London Chamber of Commerce & Industry, 33 Queen Street, London EC4R 1AP
(T: 020 7203 1882 or 020 7203 1889 or E: jford@londonchamber.co.uk)
KPMG International’s Trademarks are the sole property of KPMG International and their use here
does not imply auditing by or endorsement of KPMG International or any of its member firms.
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Index
Executive Summary
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1.
Introduction - The Economic Benefits of the Olympic Games
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2.
Bidding for Olympic Contracts
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3.
Preparing for the Games
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4.
Paying for the Games
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5.
The Legacy of the Games
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6.
Olympics-related marketing
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7.
Conclusion
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Foresight Communications, Mark Adams OBE, managing director
“There is a danger that it will be extremely difficult for SMEs to be the prime
contractor on many contracts. More realistically, on many, they will be subcontractors. The Government should put pressure on bidders to adopt a partnering
strategy with their SME sub-contractors, rather than a more adversarial procurement
relationship.”
Cobra Beer Ltd, Karan Bilimoria CBE, founder and chief executive and London 2012
bid ambassador
“I am concerned that the contracts will go to the giant corporations and the SMEs
won’t get a chance. A result of this may be that the variety of offerings – especially
for consumer products – will be limited, thus restricting choice for participants, visitors
and consumers.”
Capital & Provident Management Ltd, Sunny Crouch, project director
“The jury is still out. The UK has no track record of making a success of these things.
The bureaucracy can’t move fast enough to keep up – as demonstrated by the fact
the ODA still isn’t operational. It won’t be a financial success as the evicted firms and
construction workers will hold the Government to ransom.”
HELM Asset Management, Raj Madhani, director
“The existing framework of taxation is, in my mind, sufficient. It is not just London
businesses who will benefit from the Games. Accordingly, I believe that Central
Government should take the lead in funding as the UK economy as a whole will
benefit.”
XL Marketing and Office Supplies Ltd, Lawrence Delanbanque, managing director
“We don’t want another Dome. Take the politics out.”
Invitation2Tender.com, Scott Keyser, founder and managing director
“This is a real opportunity for local businesses to contribute to the success of the
biggest sporting event for decades and to the regeneration of the East of London.”
Thames Water, Andrea Riding, relationship manager, London 2012
“A deprived area of London will be regenerated and a sense of community pride and
spirit will return.”
Royal Mail, Nicola Scrivings, area general manager for East and North London
“Royal Mail enthusiastically supports the London Olympics. It is also vital that we are
involved in the planning for the impact they will have in East London so that we can
ensure an excellent mail service for new and existing customers in the area.”
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Executive Summary
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The London Chamber of Commerce, in conjunction with the East London
Chamber of Commerce and the Docklands Business Club, conducted
detailed interviews with directors of 37 businesses to gauge their attitudes to
the London Olympics, their confidence that London businesses will benefit
and whether or not they planned to bid for Olympic contracts.
Although this report places the views expressed in the context of wide ranging
economic data on the economic benefits of other major sporting events, it
remains rooted in the concerns, aspirations and opinions of London
businesses.
Business support for the London Olympics was extensive throughout the
bidding process and our research shows that this remains the case, with
almost nine out of ten of all businesses interviewed expecting to benefit from
the Games either directly or indirectly. Many of those firms unsure of the
benefits for their business nonetheless anticipated a domino effect providing
indirect benefits, mostly from larger contractors seeking to source supplies
and suppliers.
Businesses consider there to be a serious lack of information currently
available about the procurement process for the Games and are confused
about who will – and who should – be managing this process.
Many firms – especially SMEs – face a crisis of confidence when bidding for
public contracts. Some lack experience of preparing bids whilst others are
deterred by the costs and complexity of bidding.
Nearly three quarters of those interviewed said they would find it extremely
valuable to meet equivalent companies who have already supplied an
Olympic contract.
Those interviewed expressed a clear preference that business participation
should be business led.
Successful models of engaging support local business participation exist with
the supply chain database work done by Manchester Inward Development
Agency ahead of the 2002 Commonwealth Games and the success of the
Canary Wharf Local Business Liaison Office since its establishment in 1997.
Experience has shown that projects to engage, educate and involve
businesses in major sporting events – such as an Olympic Business Club –
are more successful if they are started at an early stage and are driven and
managed by business.
Many firms said they expected to benefit from the Games indirectly as a result
of a wider Olympic ‘x-factor’ derived from increased interest in the capital as a
place to visit, trade and invest in. However excessive or draconian rules
governing Olympics-related marketing could drastically limit the ability of nonsponsor firms and SMEs to benefit from the buzz created by the Games and
may sour the London 2012 experience for many of those who enthusiastically
backed the London bid.
The interviews also uncovered a high level of business support for the
principle of business contributing towards the cost of staging the Games.
However, the vast majority of those who said business should pay qualified
their support suggesting that it should be conditional on limits being set and
benefits clearly demonstrated. Some businesses also expressed concern that
only London firms would be asked to pay when many non-London firms would
also profit from the Games.
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All respondents said they thought that a business contribution should be
capped so that they did not have to pay for budget overruns or construction
delays.
All of the businesses surveyed said they expected the Games to be a
success. However, despite their evident optimism about the Games
themselves, many interviewees were sceptical about the ability of public
sector management to deliver the Games efficiently and cost effectively due
to the well publicised failures of previous large-scale, Government-led
construction projects. Several respondents referred, unprompted, to the
Millennium Dome debacle.
While many firms said they expected to benefit from the investment in
London’s transport network and anticipated a significant increase in wider
public enthusiasm for sport they were less confident that the new Olympic
venues and stadia would be of viable, long term use.
The legacy of the London 2012 Olympics must be about more than just new
stadia and transport links. The Games could create partnerships, networks
and business support structures that could endure beyond 2012, creating new
jobs, helping local business grow and stimulating investment in skills and
training. But for that to happen work must begin today to drive business
participation and break down the barriers that could prevent London
businesses from fulfilling their potential.
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1. Introduction - The Economic Benefits of the Olympic
Games
London 2012
July 6th 2005 was an historic day for London with the announcement that the UK’s
capital city would play host to the Olympic and Paralympic Games in 2012. Whilst
the city’s euphoria was cruelly dented by the atrocities witnessed the following day,
London remained resilient, steadfastedly continuing to plan for its share of the world’s
biggest sporting event.
Support for the London 2012 bid has been extensive throughout the bidding process.
In a nationwide poll carried out in December 2002, 82% of London respondents said
they thought London should bid for the Games (ICM, December 2002), supported by
the London Chamber of Commerce and Industry’s (LCCI) own research the following
year which revealed that 81% of London businesses supported the bid.
The purpose of this report is to examine the needs and aspirations of the capital’s
business community, reflecting current thoughts and trends in order to support a
clear role for London businesses and to inform key stakeholders and decisionmakers as to the requirements of London’s commercial heartland.
The first major report examining business participation in London 2012, the research
is based on detailed telephone interviews with the directors of 37 companies based
in London and the South East. It has been conducted by the London Chamber of
Commerce, and sponsored by one of the UK’s leading professional services firms
KPMG. It directly reflects the opinions and aspirations of company directors in the
capital. The primary focus in this case is an SME one - since it is the smaller
organizations who will undoubtedly encounter greater potential barriers to
participation in particular in relation to the bidding and securing of Olympic contracts and encompasses a diverse range of business sectors from financiers and business
consultants to leisure providers and manufacturers.
Economic Benefits
The economic benefits resulting from previous economic Games are clear, in
particular in the case of the Sydney Olympic and Paralympic Games 2000 and
indeed, closer to home, the Manchester Commonwealth Games 2002.
The 2000 Olympic Games are estimated to have attracted 1.6 million visitors to
Sydney, generating as much as £2.5 billion for the Australian economy between
1997 and 2001. Australia witnessed an 11% increase in visitors in 2000 and a 15%
increase in visitors to the capital itself in September 2000 alone. Moreover the boost
to tourism continued into 2001, with an increase of 7.6% in the first quarter of 2001
compared to 2000. Retail sales in tourist locations increased by 40-80%, in particular
clothing and souvenirs, hospitality and service sector (take-away food) and
restaurants (Sydney 2000 Games & Paralympic Games, Pricewaterhouse Cooper, 2001).
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According to the report by the Australian arm of PricewaterhouseCoopers, possibly
the most enduring legacy of the Sydney games may be those pertaining to the
business community in terms of skills, contacts, international awareness, partnering
and investment. A year after the end of the Games, businesses in New South Wales
had won almost £0.9 billion in sports infrastructure and service contracts, leveraging
from experience gleaned during the Games. Some £275 million in new business
investment was secured whilst over 55,000 people received employment-related
training as a direct result of the Games. Additionally there was a marked and
substantial growth in business travel to Sydney. In 2000, Sydney hosted a record 49
international conferences, making it one of the world’s top five, and the only nonEuropean, convention destination.
It is these business community benefits and legacy which must be replicated here in
London. Indeed London’s benefits should be still greater given Australia’s
disadvantages in terms of time-zones, small population and travel costs (Olympic
economics: Sydney and the destination economy, Locum Destination Review, 3:2001) .
Although a much smaller event than the Olympics, the Manchester Commonwealth
Games 2002 was to generate 6,000 new jobs in Manchester. £600 million worth of
public and private investment was raised, in turn boosting the city and the region’s
profile (The Economic Impact of the Manchester Commonwealth Games, Cambridge
Policy Consultants, 2002). In total, 18 million people visited the North West in 2002,
injecting about £6 million into the region’s economy and it is estimated that, as a
result of the Games, an additional £22 million of expenditure will be generated whilst
an extra 30,000 visitors are set to descend on the region each year. Moreover, and
of even greater import to the London business community, the Manchester Games
were delivered through a working partnership between public sector agencies and
private business organizations, not least the Manchester Chamber of Commerce. In
regeneration terms, the success of the games was ‘closely intertwined’ with the
regeneration of the East Manchester area – a deprived, former industrial region of
the city unable to ‘retain businesses or residents’ (The Economic Impact of the Manchester
Commonwealth Games, Cambridge Policy Consultants, 2002).
London too will benefit immensely from infrastructure and transport improvements.
As part of an already-committed, long-term spending plan, approximately £20 billion
will be spent on London’s transportation system prior to 2012, to include extension of
the Docklands Light Railway (DLR) in East London; a 45% increase in capacity on
the Jubilee Line; a £1 billion rail extension of the East London line; and the
improvement and upgrading of Stratford station. Moreover the high-speed Channel
Tunnel rail link extension will cut journey times from Stratford to Central London to
just seven minutes (London 2012, Response to the questionnaire for cities applying to become
candidate cities to host the Games of the XXX Olympiad and the Paralympic Games in 2012).
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2. Bidding for Olympic Contracts
Business support - a public/private partnership
“Only after the funding catastrophe of the Montreal Games in 1976, leaving the city
with a legacy of deficit funding, and after the 1984 Los Angeles Games had shown a
new commercial funding pathway, did the matter of economic development impacts
and public-private partnership initiatives really gain attention.” (Olympic economics:
Sydney and the destination economy, Locum Destination Review, 3:2001)
Both the Manchester Commonwealth Games 2002 and the Sydney Olympics 2000
are regarded as having been a victory for public/private partnerships.
London can learn many lessons from Manchester and Sydney, where in the case of
the former, the local business community was a key partner, represented in part
through the Manchester (and Liverpool) Chamber of Commerce. Prior to the Games,
senior officers from Manchester City Council met with key partners from the Greater
Manchester business community to explore and develop legacy opportunities. A
Commonwealth Business Club was established prior to, and operated throughout,
the Games. It was presented as a forum for UK companies to make contact with
other major business interests both nationally and internationally capitalizing on
commercial opportunities associated with major events such as this. The Business
Club was enthusiastically received by the North West business community and
included a bespoke website and the organization of Games-related events. Supply
chain forums were set up to ensure businesses in the region were given every
opportunity to supply goods and services to the Games. Moreover a sectoral
approach was adopted covering the aerospace, automotive, creative industries,
Environlink, health, ICT and sports industries.
The London Olympics - benefits for business
Almost nine out of ten businesses interviewed believe that the London Olympics will
benefit their business, whether directly or through more indirect means. Only a
handful of businesses surveyed do not anticipate a tangible benefit whilst a similar
number are unsure.
Nonetheless on closer inspection those who profess to be unsure are hopeful of a
domino effect providing indirect benefits to their business, not least emanating from
the needs of the larger contractors to source additional supplies and suppliers. The
general feel good factor generated by Olympic-related activity is cited as a positive
advantage by those businesses anticipating a more indirect benefit, including one
entrepreneurial businessman who is hoping to pick up fallout from larger companies
preoccupied with delivering Olympic contracts. Improvements in transport and
infrastructure, the general economic wellbeing of the capital, regeneration and a rise
in employment are all cited as genuine reasons for businesses in London to be
excited at the prospects of 2012.
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Many of the respondents predict direct commercial benefits for their business across
a wide range of sectors. London’s business community includes a large contingent
of firms operating within the support sectors of marketing, advertising and PR,
management consultancy, legal and financial services and recruitment and HR and,
in the case of the latter, there will be an inevitable demand in services for recruiting
personnel in the years running up to 2012 together with an influx of temporary
positions to supply the Games themselves.
In marketing, advertising and PR terms, businesses across all sectors will seek to be
involved in the Olympic process which should provide a direct benefit to marketing
firms servicing this increase in promotional activity.
Companies operating within the leisure, tourism, travel and food and hospitality
industry expect to see a direct boost to business. It is anticipated that the Olympics
will boost tourism not just in 2012 but in the seven years leading up to the event,
given the belief emanating from our research that the award of the Games in itself
will serve to put London on the radar again as a key tourist destination, generating
renewed interest in the capital. This is tremendously important in light of the recent
decline in visitor numbers form North America.
Karan Bilimoria CBE, founder and chief executive of Cobra Beer Ltd and
ambassador for the bid, exemplifies this feeling: “Our beer sales and sales of
consumables generally will go up with the influx of visitors to London [and] the
economic boost that Olympic activity will provide will leave people with more
disposable income for eating out and drinking. The Olympics will benefit the
hospitability industry greatly, and we are confident we will profit as a result.”
Moreover, alongside all manner of technological equipment required to service the
Games, there will be a huge surge in demand for the services of the security
industry.
A piece of the action - bidding for contracts
Well over half of the businesses we interviewed are hoping to bid directly for Olympic
contracts whilst a small number would consider bidding if they knew how to do so.
It is interesting to note that of the businesses that do not plan to become directly
involved in securing Olympic contracts, many of them still anticipate indirect
involvement either through engaging with clients who may bid, supplying other
contractors or general consultancy activity.
Nonetheless three quarters of businesses interviewed do not consider themselves to
be well informed about the bidding process. The reasons for this seem to relate to a
shortage of information and uncertainty as to where to find it. One respondent, the
managing director of a communications firm, has ‘a good understanding of public
procurement issues generally’ but thinks the bidding process ‘does not appear to be
that well defined.’ Similar indictments of communications to date include ‘information
is badly missing, and if there is some available, not a great job has been done to
make businesses aware of it’; ‘I feel disadvantaged as an SME’ and; ‘how does one
access this information?’
Communication is crucial. Businesses must feel included in the 2012 process and, at
the very least, be kept abreast of developments. Even if there is little activity to
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report, businesses must be continually updated of the fact to prevent resentment and
feelings of being overlooked. This is particularly important for SMEs, whose initial
enthusiasm may soon wane.
Indeed information is key and is the requirement prioritized by most businesses as
the area of support they covet most. The quest for information encompasses a wide
range of issues including: what bids are available?; what criteria is required to bid?;
what is the decision-making process?; how can SMEs get involved at the subcontracting levels?; who is bidding for what?; what criteria is applied to SME supply
chains?; and information on compliance. Moreover direct support is sought in the
form of help with the bidding process including workshops; direct and two-way
communication between stakeholders and business as well as business-to-business;
a clear point of contact for business enquiries; introductions to stakeholders; and,
interestingly, with the construction of business consortia, partnerships and brokerage.
How can SMEs work together to meet the needs of 2012 contracts?
A test of confidence – do SMEs really stand a chance?
Well over half of businesses are not confident that SMEs will secure Olympic
contracts with less than a third showing confidence in the opportunities for London’s
smaller firms.
Of those who are confident, it is important to clarify that the vast majority of these
businesses are only fairly confident in a positive outcome for SMEs. Indeed only one
business has gone so far as to say it is very confident in success. As Steve Acklam,
chief executive of the School Governors’ One-Stop Shop explains: “I can see no
reason why they cannot benefit assuming they can add cost-effective value to the
progression process.”
Moreover there is a feeling that SMEs will be more likely to benefit at the subcontractual level. As Mark Adams, managing director of Foresight Communications
explains: “There is a danger that it will be extremely difficult for SMEs to be the
prime contractor on many contracts. More realistically, on many, they will be subcontractors. The Government should put pressure on bidders to adopt a partnering
strategy with their SME sub-contractors, rather than a more adversarial procurement
relationship.”
Similarly some of those businesses who are not confident in the direct participation of
SMEs also believe that the only real chance for SME participation is through the subcontracting route.
This opportunity was clearly addressed in the case of the Manchester
Commonwealth Games whose supply chain development programme included a
database of businesses enabling them to tender to supply main contractors such as
the construction companies building the stadium and related facilities and the
equipment and fitting contractors. Interestingly there was a significant local
dimension to the database, with 96% of registered businesses based in the North
West, half of which were in Greater Manchester itself (Business benefits associated with the
Commonwealth Games Legacy programme, Cambridge Policy Consultants, September 2002). It is
worth noting however that one of the business case studies from the Commonwealth
Games Legacy report is critical of the length of time taken to establish the supply
chain initiative and the fundamental importance of business acumen in managing
such a scheme:
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“According to Visionstyle, the organisers of the Supply Chain programme could have
improved the success of the initiative by being faster in the initial stages in setting up
contracts, and by having a more commercial experience when contacting retailers in
the UK and ‘selling’ the Games” (Business benefits associated with the Commonwealth Games
Legacy programme, Cambridge Policy Consultants, September 2002).
There is additionally a strong feeling emanating from our research that smaller
businesses need to be given the opportunity to work together. According to Jo
Sealy, owner of XL Hair Design & Academy, SMEs “will only secure contracts if they
are given the opportunity to do so – through engagement in the correct environments
to attract SMEs and by offering all options – such as creating consortia among SMEs
in order to bid.”
There is a worrying degree of cynicism among London companies, particularly in
relation to existing relationships and the power of big business. As one managing
director operating in the environmental sector despondently explains: ‘as usual the
big companies who can afford to pay sweeteners are more likely to secure contracts.’
Similarly the chief executive of a small City-based accountancy firm told us: ‘to be
cynical only those who have the right contacts will succeed.’ Moreover one
respondent referred to past allegations of Olympic organizers being open to bribery
as a barrier to entry for the small firm.
Also evident is a lack of confidence among SMEs in the ability of smaller
organizations to be able to play on a level playing field, assuming they can locate the
field at all. This is the result of a number of factors, not least the tight, and possibly
inflexible, contractual deadlines; the ‘associated complexities and value of the sums
involved’; the fact that, in short, larger companies are able to be more competitive in
terms of price; and the extensive support which smaller organizations will require to
be in with a fighting chance of competing. Put simply, ‘how can small businesses
get noticed?’
Karan Bilimoria of Cobra Beer examines the complexities facing the smaller and
medium-sized firm and the implications this brings:
“I am concerned that the contracts will go to the giant corporations and the SMEs
won’t get a chance. A result of this may be that the variety of offerings – especially
for consumer products – will be limited, thus restricting choice for participants, visitors
and consumers. Hopefully they will profit from increased business and the boost to
the local economy.”
Rita Beckwith, managing director of City Cruises plc, agrees. “Unless there is a well
prepared plan and a commitment to use SMEs, in addition to providing the help,
advice and support they need, it won’t happen. So whilst I haven’t yet seen the
evidence to fill me with confidence, I hope that this once-in-a-lifetime opportunity will
not be missed to benefit our local SMEs.”
It is important to point out however that the planning process for procuring contracts
has included an agreement with local boroughs to give preference to local
employees, including SMEs:
“A key assessment criterion in the selection of contractors should be their
commitment to working with the LDA/ODA and others to underpin delivery of a
programme of local community involvement and benefits including: employee
representation; Fair and ethical employment; London living wage; supplier diversity;
local and ethical sourcing; local labour; community benefit; training and supply chain
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initiatives.” ((Interim) Olympic Delivery Authority, Procurement Principles, September
2005)
Moreover a clear role for business support organizations has been identified in
relation to the bidding capabilities of SMEs. A spokesperson for a central London
based management company believes that a single point of contact and information
must be established for business, particularly given the fact that the Olympic
Development Authority (ODA) is not as yet ‘up and running… Maybe another
organization, like the LCCI should do it. A website with an email facility would be the
first step. You could build a database of interested companies/SMEs and use it to
build consortia of firms looking to bid. Many firms would probably pay to join such a
business club.’
London and UK business - a preferred option?
The majority of businesses (almost three quarters) believe that preference should be
given to London and UK businesses in awarding contracts, with many championing
local businesses above all others, not least since London as a city will be contributing
greatly to the cost of the Games and should receive certain advantages in return.
“Their commitment to create a legacy demands that London businesses, rooted in
the community, have the opportunity to contribute,” comments the managing director
of a central London-based employment consultant.
These pro-London sentiments are echoed by Scott Keyser, founder and managing
director of Inviation2Tender.com and an expert in proposals and competitive tender “This is a real opportunity for local businesses to contribute to the success of the
biggest sporting event for decades and to the regeneration of the East of London,”
and by Eugene Rembor, senior partner at City-based management consultants
Rembor & Partners Ltd, who said: “Of course. Why not? Is it unethical if a
government works in the best interest of its people and in the interest of the taxpayer?”
Nonetheless despite their enthusiasm, London businesses are realistic and
recognize the potential limitations to a London-biased position. As the managing
director of an East London manufacturer and wholesaler explains: “The costs
involved mean that London businesses should benefit. However, the Olympics
should not be about ‘cheap’ – that could undermine the whole thing. It should be
about quality and getting the best.”
Moreover the company directors interviewed recognize that, although in an ideal
world London businesses may be given an advantage, the reality is more complex,
particularly in relation to European competition law. One company director said “It will
not happen. They will have to advertise within Europe.” Another area of concern is
the ability of large corporate organizations to win contracts “given their relationships
with people in power.”
A little over a quarter of businesses do not however believe that London or UK
businesses should receive any preferential treatment. As one East London food
manufacturer explains:
“I believe that preference should be given to the best tenderer in terms of price and
value for money. That way all Londoners benefit and indeed everyone funding the
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Games benefits. If these happen to be London based companies, then that is a
bonus.”
In addition to price, the skills agenda features as a further reason why the tendering
process should be open: ‘London businesses should not be taken on if better skills
can come from elsewhere.’
Moreover it is important that businesses awarded contracts can deliver what they
promise: “The contracts should be awarded on the basis of experience, quality of
service and delivery within budget,” comments Raj Madhani, director of HELM Asset
Management.
In short, London businesses are proud of what they can offer and want to be
rewarded on merit rather than given preferential treatment. As Karan Bilimoria
explains:
“I firmly believe in the free market, and letting the best man win, but I am confident
that London/UK companies will have the home advantage in terms of supply,
customer relations, brand loyalty, local knowledge and low costs.”
What the capital’s businesses strive for is a level playing field, an equal chance to
compete with the larger and more experienced, in public contract terms,
organizations.
Public sector contracts – who bids?
Interestingly, the cross-section of London businesses interviewed during the research
of this report has revealed that a fair proportion already bid for public sector
contracts, although many of those are not regular bidders and again our research
demonstrates certain constraints on SMEs, not least in terms of magnitude of
contracts and length of time taken to prepare a bid.
As one North London manufacturer told us they will bid ‘if it is clear that we have a
chance of winning. These tend to be small, very specialised bids. We do not bid for
large contracts because we do not think that SMEs usually stand a chance.’
Similarly Barry Shambrook, managing director of Tuckers Consultancy Ltd bids
“sometimes when invited. Otherwise no because the overhead involved in preparing
compliance information (and each one asks slightly different questions) is too big an
overhead for us.”
These points were echoed by those businesses who do not currently bid for public
sector work. Responses to the question ‘do you bid for public sector contracts
regularly?’ include:
‘NO…too difficult for an SME…’
‘Have tried on many occasions but paperwork/red tape/time required and maze of
contacts needed make it very difficult and not cost effective.’
‘No. Tried for ESF funding for training, but it all felt too unwieldy and difficult.’
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‘No, I don’t. In the main my experience of them is that they are time-consuming and
laborious, and access to decision-makers – one of the cornerstones of proposals
best practice – is usually denied.’
‘No as previous attempts have never been positive.’
‘Too complicated – do not have the resources.’
Nonetheless some of those businesses who do not themselves bid are involved in
the process through their clients and the number of businesses answering ‘yes’ is
generally encouraging, boding well for local level involvement in the 2012 process.
Business participation – managing expectations
There appears to be confusion over who is managing the Olympic process for
business, including frustration that roles and responsibilities are not more clear.
General comments include: ‘It’s a good question – it isn’t really clear’; ‘No clear idea
– though lots of people seem to be competing for the role!’ and ‘I wish I’d know.’
Of those respondents who do profess to understand the process a number cite the
London Development Agency (LDA) as the controlling body at present, handing over
to the Olympic Development Authority (ODA) once established. Other responses
cover all the major stakeholders and include LOCOG, the UK Olympic Committee,
the British Olympic Association, the government, the DTI, the Mayor’s Office and the
GLA, the London Chamber of Commerce and local chambers of commerce.
In short the research demonstrates that the business community is unclear as to how
the process of business support is currently, and will in the future be, managed. The
lack of clarity is summed up well by Mark Adams of Foresight Communications:
“The position is obviously currently unclear. In principle, this should be the Olympic
Delivery Authority over time, but until it is established, there will be a confusing array
of bodies involved.”
Whose responsibility should this be?
When questioned as to under whose remit business responsibility should fall,
business opinion is mixed. Whilst some businesses consider this to be the
responsibility of the LDA, not least since the organization is already in existence, a
little over a quarter believe there should be a co-coordinated conglomeration of core
stakeholders and a further quarter believe business support should be independently
organized and managed with many such proponents advocating the London
Chamber of Commerce as an ideal conduit for managing this process.
Champions of a joint organization include a number of companies which would
advocate a joint working arrangement between the LDA and a well-respected
business organization.
“The LDA infrastructure is already in place and should be utilized for this purpose in
full. However, I believe that it is vital for Local Authorities and Business Forums such
as the LCCI to actively participate in the process.” (Raj Madhani, director of HELM
Asset Management)
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“LDA and/or an appropriate independent and/or local business organization to ensure
needs are addressed on the ground.” (Jo Sealy, owner of XL Hair Design &
Academy)
‘LDA/LCCI – best to keep government departments as far away from commercial
decisions as can be managed.’ (company chairman)
In the case of the Manchester Commonwealth Games key stakeholders worked in
conjunction with one another - the North West Development Agency (NDWA), the
inward investment agency (Trade Partners UK) and the local chambers of
commerce, particularly Manchester and Liverpool.
The Commonwealth Business Club and the supply chain and trade development
programmes were established under the umbrella of the Commonwealth Economic
Benefits Initiative, managed by the Manchester Investment Agency, MIDAS.
Sector based initiatives were additionally created together with individual projects
such as the Tradelink website and the North West Ethnic Minorities Group.
The Commonwealth Economic Benefits Programme (which received Single
Regeneration Budget funding) was responsible for extending the benefits of the
Games across the North West business community:
“Through trade development and supply chain initiatives approximately 250
companies have realised an additional increase of £27m in their turnover, as a result
of the Games.” (The Economic Impact of the Manchester 2002 Commonwealth
Games Executive Summary, Cambridge Policy Consultants, September 2002)
Other businesses support a truly co-coordinated response. As Miles Parker,
managing director of business consultants Linx Associates concludes: “All of them
have a role. The issue is, how to help them to align?”
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3. Preparing for the Games
Learning from experience
More than half of London businesses would be interested in visiting Sydney to learn
best practice from the 2000 Games suggesting a thirst for knowledge and a genuine
enthusiasm in participation.
Of those businesses who would not consider such a mission useful, cost is given as
a reason whilst a spokesperson form a communications businesses considers a factfinding visit to Athens to be more beneficial. Indeed this may well be preferable
particularly given the relative distance, cost and time required away from the office.
This perspective is echoed by the managing director of an East London
manufacturer:
‘I think it would be more useful to visit a host of other cities that got it wrong and find
out what the pitfalls are, so they can be avoided. London is very different to Sydney.’
It seems that learning from experience is considered an invaluable tool to business.
Nearly three quarters of those businesses interviewed during the research of this
report would find it extremely valuable to meet with equivalent companies who have
already supplied an Olympic contract. A number of respondents suggest that such
shared experience ought to be coordinated by a business organization, in the form of
a seminar or event.
Moreover of the minority who would not find this useful, it is because such an
exercise would not be applicable to their business needs as opposed to a negative
reaction per se.
Working in partnership
The majority of businesses would consider partnering with a foreign company if it
would improve their chances of winning a bid. In fact only one business interviewed
during the course of our research gave a categorically negative response. All other
participants do not consider the opportunity to be applicable to their business. One
respondent would, however, advise his clients to do so if it would bolster their chance
of securing a contract.
Positive responses included:
‘Definitely. Partnerships are a golden key to winning business and a traditional
practice all over the world,’ and
‘Yes. I have contacts from my time in Sydney and think that would be most useful.’
Similarly partnering with a larger company is an option that many businesses have
either considered or would consider in order to help them secure an Olympic
contract. The managing director of a management consultancy, for example,
believes that SMEs should be actively encouraged to adopt such a course of action.
A further managing director told us that working in conjunction with a larger
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organization is invaluable in situations where additional expertise or financial support
is required. Interestingly one North London based firm of architects is already set to
steal a march, currently in discussion with a larger group precisely to secure such an
outcome.
It seems however that many within the business community, and in particular SMEs,
may require some assistance in brokering such a process with a small number of
respondents reporting that they would be interested but do not know which
organizations would be appropriate. Again there could be a clear brokerage-type
role for business support organizations to provide information and partnering
opportunities for SMEs.
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4. Paying for the Games
A contribution from business?
Three quarters of those interviewed agree that London businesses should contribute
towards the cost of staging the Games. However, only one third of these (roughly a
quarter of everyone interviewed) accept unconditionally that business should
contribute, stating that that either a limit should be set or that there should be
guarantees that London businesses will benefit. One director agrees with the
principle, but ‘only if there is a clear delivery plan and Government backing that
ensures business benefits’ while Scott Keyser, founder of Invitation2Tender.com,
said: “Yes [businesses should contribute], as long as they are given a fair crack of
the whip to bid for and win contracts.”
Others believe that only those who win bids or contracts should contribute. According
to the managing director of a recruitment company and HR consultancy: ‘Those who
will be deriving direct benefit from the Games should invest in them. It is unfair to
impose a levy on all.’ Another managing director said: ‘Contribute, yes, but the
burden should not fall heavily on [businesses], unless there is a very clear and
substantial quid pro quo.’
Of those who disagree many felt that central government should take the lead: ‘The
existing framework of taxation is, in my mind, sufficient. It is not just London
businesses who will benefit from the Games. Accordingly, I believe that Central
Government should take the lead in funding as the UK economy as a whole will
benefit,’ according to Raj Madhani, a director with HELM Asset Management.
One respondent who disagrees in principle stated: ‘No, why should they? Are they
going to be treated preferentially in tendering? If so, this may harm all Londoners if
their tenders aren’t the best ones. The Olympics should be funded by sports lovers,
not business people. …There is no certainty that the Olympics will benefit Londoners.
It could turn out to be one of the biggest financial burdens upon Londoners if it is not
managed effectively. Perhaps those choosing to bid for the Games and those who
signed ‘back the bid’ petitions should pay. They wanted it. Perhaps the London
Olympics should be floated as a corporate entity and the public could purchase
shares in it – this way there would be a financial incentive to ensure it is properly
managed.’
Should London residents pay?
Interestingly, interviewees were more willing to accept that business should
contribute to the cost than they were to see London residents asked to foot the bill.
One third of respondents said that Londoners should not have to pay compared to
just a quarter who oppose a business contribution. Many respondents oppose a
Londoner contribution in principle. According to one managing director, ‘No – this
was not put through any democratic process to justify their contributing.’ Another
respondent felt that the Games should fund themselves through ticket sales and
marketing, so that only those who want to participate foot the bill.
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Of those who do support a contribution from London residents, about half stipulate
conditions on which this should be done. Many businesses are also concerned that
London is being asked to pay for an event that would benefit the whole country, not
just the capital. According to one company secretary: ‘Only if the benefits in total
accrue to London – but other cities such as Birmingham and Manchester will benefit
via tourism. So, No.’
Should this contribution be capped?
All respondents agree that business and taxpayers’ contributions should be capped
so that they did not end up paying for delayed construction or budget overruns. As
one company chairman said, ‘would you allow a big project like this to put its hand in
your pocket?’
While several interviewees believe that the government should be responsible for
meeting the costs of budget over runs or delays in construction, a number of
respondents specified that contractors themselves should be held accountable.
According to Daniel Leon, a director with Square Feet Architects: “Surely this should
be seen as a national enterprise and celebration. The contracts should be sorted to
ensure that the contractors bear the responsibility for overruns etc. If the delays are
due to the organizers changing their mind over something then it should be carried
by them.” This view was echoed by Julian Cuppage, managing partner law firm
Wedlake Bell, who said “budget overruns should be carried by the people
responsible for them,” and Mark Adams OBE, managing director of Foresight
Communications, who added that “the contracts should be designed to place
business risk around cost and time overrun in the hands of those companies
delivering the contracts.”
Sandi Goddard, managing director of marketing consultants Goddard Delaney, goes
further still, stipulating that “there should be no bonuses paid to any companies or
officials who do not deliver on time, within budget and to a high standard of
construction.” Another managing director goes so far as to suggest that the salaries
of the public servants managing the Olympics should be directly related to the
success of the Games.
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5. The Legacy of the Games
One of the major benefits that the government and London 2012 promoted when
bidding for the Olympics was the enduring legacy for London and the UK that would
continue long after the 2012 Games had finished. According to the London 2012 bid,
the four main ‘legacy benefits’ would be:




To leave behind world-class sports facilities which meet a clearly defined
sporting need and become the heart of existing communities;
To enhance the opportunities and support available to Britain's competitors
across the range of Olympic and Paralympic sports;
To drive the regeneration of the east of London, delivering a high-quality
environment for business and opportunities for local people;
And to create a major new urban park the biggest created in Europe in 150
years.
Will the games be a success?
All of the businesses surveyed said they expected the Games to be a success,
though about a quarter qualify their expectations. Karan Bilimoria of Cobra Beer said
“This is a fabulous opportunity to show the world what a tremendous, diverse and
forward-thinking nation Britain is, and that London is the best city in the world. It will
be an inspiration to future generations, especially the young, and will really be a
boost for sport in Britain.”
One company chairman said the games were ‘sure to be’ successful while Alison
Bradley, a solicitor with law firm Campbell Hooper, said she expects 2012 to be a
“huge success”. Scott Keyser of Invitation2Tender.com, was also confident “as long
as the majority of Londoners embrace [the Games] fully and help create the ‘feelgood-factor’ that business and young people thrive on.”
Although confidence and optimism is high amongst the business leaders surveyed,
this is coloured by an awareness of the very public – and very costly – mistakes in
the management of previous large public sector construction projects in the capital. A
number of respondents specifically referred, unprompted, to the troubled Millennium
Dome when discussing the Games’ legacy. Several referred to the under-utilization
of Olympic venues in Greece following the 2004 Games but no one referred to
Picketts Lock, the abortive plan to build a £100m stadium in Enfield for the 2005
World Athletics Championships, which became the first time in the modern sporting
era that a major economic power has failed to meet a promise to hold a major sports
event. (The 2005 Championships were subsequently held in Helsinki).
Daniel Leon, a director with Square Feet Architects, said he believes the Olympics
will be a success “as long as the do-gooders keep their noses out of it. English
mentality is to secretly wish to fail and then say ‘told you so’. Hopefully the success at
Wembley will overwrite the failure at the Dome.” Lawrence Delanbanque, managing
director of XL Marketing and Office Supplies Ltd, whose firm were the official
stationery suppliers to the Dome, said “We don’t want another Dome. Take the
politics out.”
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Sunny Crouch, a project director with developers Capital & Provident Management
Ltd, said “The jury is still out. The UK has no track record of making a success of
these things. The bureaucracy can’t move fast enough to keep up – as demonstrated
by the fact the ODA still isn’t operational. It won’t be a financial success as the
evicted firms and construction workers will hold the government to ransom.”
This kind of response was only to be expected. A YouGov poll for the Evening
Standard back in December 2002 showed that 69% of people supported a London
Olympic bid but when reminded of the Dome fiasco, support dropped to just 46%.
Many of the firms interviewed by the London Chamber of Commerce for this report
are based in Docklands and the East End, not far from the Millennium Dome site on
the Greenwich peninsula and some even have first hand experience of its troubled
construction.
Surprisingly, given the recent London bombings, only a small number of respondents
cite security concerns as a possible factor that could undermine the success of the
London Games in 2012. One managing director said: “Security is the biggest worry.
We need to make sure the Games are safe.” Another added that “another Munich
would be disastrous for London.”
Beyond 2012
Although most businesses that expect to gain from 2012 cite investment in transport
and infrastructure as the main long term benefits for their business, a number of
interviewees refer to the wider legacy of the Games and the benefits for London as a
whole. About a third specifically cite the regeneration of East London as the Games’
enduring legacy. Dai Prichard, chairman of OCS Security, said: “Other facilities will
be less useful to us, but no doubt of great value to the communities near them the
potential for regeneration is enormous and must be imaginatively grasped.” Andrea
Riding of Thames Water said the benefits would be similar to those that were seen in
Barcelona in 1992: “a deprived area of London will be regenerated and a sense of
community pride and spirit will return.”
About one fifth of those interviewed are positive about the sporting legacy of the
Games. Eugene Rembor of accountants Rembor Partners Ltd said: “The state of
sport facilities in this country is a crying shame already, so how could it NOT benefit
us?” Sandi Goddard, of marketing consultants Goddard Delaney, is even more
enthusiastic: “I think we should be left with excellent facilities for British sports, for
London and for local people…Britain will be able to enjoy the tangible and intangible
benefits of the ‘feel good factor’ for a couple of years – which might contribute to
greater economic and sporting success.”
However, a number of firms are more sceptical about the future value of the Olympic
venues to Londoners. Mike Leaney, managing director of ML Select Ltd, said:
“London residents will benefit from the new stadia, but only if the cost of using them
is set at a reasonable level.” The managing director of one East London business
went further, saying: ‘We will have numerous white elephants and a huge financial
burden for years to come. This could all change though, but there are no signs as
yet.’ Anthony Gould, managing partner of ASG/IMC, described the Olympic legacy
thus: ‘a lot of wasted buildings will be unused and need pulling down or converting.’
One property developer said the venues could be, ‘white elephants and lie fallow for
years.’
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Benefits of investment and regeneration
Although an improved transport network was not one of the four legacy benefits
identified in the original bid document, it is nonetheless the most easily identifiable
gain from hosting the Olympics and a major selling point for securing business
support for the Games. Almost two-thirds of those interviewed expect the investment
in transport and infrastructure to benefit their business. Dai Prichard, chairman of
OCS Security, said: “Improved transport will be of very lasting value to my business –
we are very dependant on good transport links for getting 1,000 of our staff to their
places of work in and around London.”
However, some businesses are eager to stress that the transport improvements that
will be made ahead of the Olympics are all schemes that would have been built
anyway. One director said: “None of the so-called transport improvements are for the
Olympics. They’d have all been built anyway and I resent the suggestion that the
Olympics are to thank. If anything we would have liked to see Crossrail built before
2012.”
Although many interviewees are enthusiastic about the Olympics and confident of the
enduring benefits for their business from hosting the Games in 2012, a number of
businesses located away from East London are unsure that improvements to the
transport system in the Lower Lea Valley will really benefit them. As Kim Church of
the Covent Garden Business Forum pointed out, Covent Garden would only benefit
from investment in transport “as long as Central London is part of the improvement
package”. When asked if he thought that improved transport links would be of
enduring benefit to his business, the managing partner of one consultancy
businesses replied ‘Doubt it, particularly as Crossrail, if it goes ahead, will not open
until 2013.’
About one fifth of those interviewed do not believe that the improvements to the
transport network or the regeneration of the Lower Lea Valley will be of direct benefit
to their business, although many do expect there to be indirect benefits, such as
boosted tourism, increased interest in the UK overseas, or a ‘feel-good-factor’. Rita
Beckwith, managing director of City Cruises Plc, explained the situation for her
business: “The facilities, regeneration, transport links etc will benefit London as a
whole and East London in particular and will be a lasting legacy, but it will not directly
benefit our business which depends on overseas and domestic tourists coming to
London. We are hoping that the Olympics will bring about a growth in visitor numbers
to London and via this gateway to the rest of the UK which will be an enduring legacy
for all London businesses in tourism, including our own.”
A genuine legacy?
It is apparent that there is no clear consensus amongst those surveyed regarding the
legacy of the London 2012 Olympic Games. Whilst everyone interviewed is optimistic
that the Games themselves will be a success, albeit some cautiously so, few provide
any real detail about how this could be quantified or defined. Given that the Games
are a long way off, preparations and plans for delivering the Games and their
supporting infrastructure remain in their early stages, the total cost can only be
estimated and any number of wider political or economic factors outside the scope of
the Olympics could come into play, this is perhaps to be expected. A number of firms
also refer to the possible positive business impact of an Olympic ‘feel good factor’
that could result from the successful staging of the Games. It is also possible to
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conclude that a disrupted, poorly managed or badly staged Games could have the
opposite effect on both business confidence and economic activity.
The majority of firms expect to benefit from the investment in London’s transport
network but, while the enduring impact upon wider enthusiasm for sport is identified,
confidence in the viable, long term utilization of the new Olympic venues is not as
strong. In no small part this is due to business perceptions of mismanagement of
previous landmark events, most notably the Millennium Dome project. However, with
many firms talking positively about the social and sporting benefits of the Olympics
but not anticipating to profit from them, it is clear that business support for the Games
extends beyond simply commercial gain.
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6. Olympics-related marketing
Businesses seeking to benefit financially from the Games by featuring the event in
their advertising or marketing face a legal minefield. The Olympics Bill, which will
create and empower bodies and organization to organise the 2012 Games, also
contains legislation to protect the rights of the IOC and their sponsors from
commercial exploitation by other advertisers. This includes provisions to control
advertising in and around Olympic sites, protecting Olympic words and symbols and
creating a London Olympics association right to protect sponsors from ambush
marketing, including powers to levy hefty fines.
Ambush marketing – when one brand pays to be an official sponsor of an event and
a rival brand attempts to associate itself with the event without being a sponsor - was
a major issue at previous Olympics. In 1984 Kodak sponsored TV broadcasts at the
Los Angeles Olympics to the irritation of official sponsors Fuji, who had their revenge
when positions were reversed at the Seoul Olympics in 1988. In 1992 in Barcelona
official sponsors Reebok were upstaged when rivals Nike sponsored the press
conference for the gold medal winning US basketball team and when Michael Jordon
accepted his medal he covered up the Reebok logo on his kit. Nike successfully
ambushed the 1996 Olympics in Atlanta too when they bought a vast number of
billboards around Olympic sites, much to the consternation of official sponsors
Addidas.
To protect official sponsors, the 2000 Sydney Olympics saw the first example of
legislation restricting the use of certain words in Olympics advertising. However,
despite the authorities’ best efforts, some brands were still able to ambush the 2000
Games. To the irritation of official sponsors Ansett Air, Qantas Airlines adopted the
slogan ‘Spirit of Australia’ – which bore an uncanny similarity to the official Games’
motto ‘Share the spirit’.
In the run-up to Athens 2004, where 11 firms had spent up to £40 million each to be
official sponsors, an estimated £500,000 was spent on clearing thousands of
billboards from buildings and rooftops around Athens - and reserving those near
stadiums for the main sponsors. In central Athens, many buildings were draped in
huge advertisements for the select brands, especially Adidas.
Although the Olympics are unique amongst international sporting events for not
allowing advertising in arenas or on athletes’ clothing, with a television audience of
four billion in 220 countries watching 3,800 hours of broadcast coverage, for many
marketing executives the Olympics are too good an opportunity to miss. However,
venues and spectators at the Athens Olympics were rigorously policed by security
staff to prevent ambush marketing. According to one BBC journalist: “A row of people
all wearing the same logo at an Olympic venue - hoping to get on television - might
be ambush marketing on a small scale. So hats, bags, umbrellas - and T-shirts - with
distinctive trademarks of sponsors' competitors are "restricted". So too is food especially if it is not an official Big Mac. In searing heat, spectators are also being
asked to leave "unlicensed" water bottles. Also out are flags from non-participating
countries, or buying a ticket with anything other than a Visa card.”
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Other items on the security staff’s banned list in Athens included banners larger than
1 metre square, electronic equipment of non-rights holding broadcasters, pirate
Athens 2004 products and unauthorized entry to venues by TV presenters.
However, critics of the proposed legislation claim that the 2012 Olympics Bill goes
even further and gives draconian powers to the Olympic authorities above and
beyond what is necessary. According to the Institute of Practitioners in Advertising
(IPA):
“As it stands at the moment the proposed Bill seeks to greatly extend UK law over
and above the protection provided for general copyright, passing off, trade marks and
the Olympic Symbols Protection Act. The IPA is firmly of the belief that official
sponsors do not require any additional protection and that IOC requirements are
more than adequately complied with within existing UK law.”
Business concern about this issue was picked up by the media, prompting the
Department for Culture, Media and Sport (DCMS) to publish a fact sheet exploding
the ‘myths’ that surround the issues. In late September 2005 the department also
announced that it will water down its proposed controls on advertising with an
amendment to the Olympics Bill during its committee stage in the Commons. It is
understood the bill will now include a new defence for unofficial Olympic advertisers
who fall foul of the regulations. They may be able to escape the £20,000 fine if they
can prove their use of the banned terms was in a "statement of fact". However, full
details of Government changes to the legislation are not yet known.
As well as maximizing the opportunities for London businesses to bid for Olympic
contracts, it is also vital that those organising and delivering the 2012 Games work to
ensure that other firms, such as hotels, tourist attractions, restaurants, are given a
fair chance to benefit from an event that their taxes will be paying for. For many, that
means being able to market their business in the context of the Games. Many of
those interviewed for this report clearly identified that the anticipated benefits of the
Games would include a ‘feel good factor’ that would not only enhance London’s
tourist industry but also stimulate wider commercial interest in the capital and its
businesses, services and products. While this London Olympic x-factor may be
harder to quantify or define than the value of a construction contract or better
transport links, the damaging impact of excessive advertising regulations or their
overzealous enforcement could have is irrefutable and could serve to sour the
Olympic experience for many firms. Further work by DCMS is clearly needed to
effectively communicate exactly what marketing and advertising restrictions are being
introduced and consult with businesses and their representatives to ensure that the
London Olympics Bill represents a fair deal for London firms.
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7. Conclusion
Business support for the London 2012 Olympics has been consistently strong. The
economic benefits of staging successful major sporting events are well known,
thanks to the successful examples of the Sydney Olympics and Manchester
Commonwealth Games.
The London Chamber of Commerce’s research clearly shows that there is a lack of
information currently available about the procurement process for the Games and
confusion about who will – and who should – manage this process. A number of
businesses, especially SMEs, face a crisis of confidence when bidding for public
contracts. Some lack experience of preparing bids while others are deterred by the
timescales, costs, complexity and bureaucracy of bidding.
Successful models of helping local businesses to bid for major contracts exist. The
Manchester Investment Agency work ahead of the Manchester Commonwealth
Games ensured that regional businesses were able to compete with supply major
contractors, with 96% of the registered businesses on the Games’ supply chain
database based in the North West. Closer to home, the Canary Wharf Local
Business Liaison Office has placed over £395 million of business supplying the
Canary Wharf Estates and surrounding areas with local firms since 1997.
These examples, and the testimony of company directors interviewed by the LCCI,
demonstrate a desire that business participation should be business led. An Olympic
Business Club needs to be established to unite firms with potential suppliers and
partners and provide a forum for communication and training about procurement,
delivery and best practice.
Experience demonstrates that initiatives such as a business club need to be started
early in order to manage expectations and keep businesses engaged and confident.
Moreover past experience and the feedback received during the research of this
report show that such support should be both driven and managed by business. In
order to understand business needs, commercial acumen is required. Support for
business may take many forms from specific sector and supply chain projects to
information-gathering and networking events together with committee forums or webbased support activities.
London Olympics are about more than just sport and the legacy of 2012 for London
businesses must be about more than just improved transport links. Successful
partnerships, networks and business support structures could endure beyond 2012,
helping local businesses to grow, creating new jobs and stimulating investment in
skills and training. But this will only be the case if London businesses are given a
sporting chance.
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