Olympic balance sheet

The Olympics of course are more than just about sport. They're about money too. Big money.

As London tries hard to secure the Games for 2012, we wondered just how much local communities really benefit from such a huge effort and investment which is often sold partly as an attempt to regenerate run down areas.

We asked Robert Nisbet to travel to the site of the 1996 games Atlanta, Georgia and to Athens - and figure out the social balance sheet.

ROBERT NISBET:
It's the pinnacle of sporting achievement, a carefully choreographed competition; with the host city it's a feat of logistics. Seven years of organisation for a fortnight on the world's stage. But the organisers of these Athens Games see them as a golden opportunity to reinvent the city, a bold bid to sweep congestion and dirt from the streets, to leave a lasting legacy for its residents. Long after the Olympic flags are rolled up, these trams will keep on rolling. The organisers of the Olympics and the Greek government point to them as a lasting legacy of the Games. They also suggest there are other venues in the city which will have a life after the closing ceremony. The Olympic village will become social housing. The football team, Olympiakos, will move into this renovated stadium. A number of functional urban land marks, including this footbridge, have been constructed. And the underground Metro has been extended, enough to make this commuter jealous.

KEN LIVINGSTONE:
Oh, it's brilliant.

ROBERT NISBET:
Could such a transformation happen in one of the most deprived areas of his city, here in east London?

FATHER MICHAEL COPPS:
(St Francis Church, Stratford)
The concerns are the same as everyone. They want good housing. They want an opportunity for their children to have a good education.

ROBERT NISBET:
Father Michael Cops is a Catholic priest in Stratford. It's in Newham, one of the poorest boroughs in Britain. 20% of those unemployed have never been in work. This is close to where the 500-acre Olympic Park would be built. Father Michael is concerned that people who live here won't share in the Olympic gold.

FATHER MICHAEL COPPS:
It's just like a circus. It comes, it's good at the time, but so what? There'll be another thing, the World Cup or something that distracts people's attention.

ROBERT NISBET:
There is a precedent for such pessimism; Father Michael consults a Baptist preacher in Atlanta. Pastor WL Cortrell has led the congregation in worship at the Beulah Baptist Church for 48 years. The church lies at the heart of Vine City, it's a deprived community, and one in five people here live in extreme poverty. It has a concrete reminder of the 1996 Games on its door step, the Georgia Dome, now home to the Atlanta Falcons football team. Organisers of the Games in their bid document vowed to enhance the immediate area surrounding the Olympic Park.

PASTOR WL CORTRELL:
Those promises were not kept, those promises were forgotten. The Olympics Committee did a good job in supporting those folk who sponsored the Games, but the poor people, the oppressed, those hurting, those who are left outside were still left. They built fences to shut us out so that we could not participate in the financial blessings that were coming to the community. Because of that, our community is still bedraggled and in bad shape.

ESTATE AGENT:
It's a penthouse, two storeys. It's approximately 6,000 square feet and currently on the market for $2 million.

NISBET:
This apartment is in a block overlooking Atlanta's Olympic Park. The centenary Games were criticised for lacking a social housing dimension, low cost high profit gains which did little to benefit poorer residents. How can bidding cities ensure legacy doesn't add up to profit for sponsors and developers?

Back in London, that's the focus of a study by the left of centre think-tank, the Institute of Public Policy Research, which has asked Father Michael to feed in his concerns. It's concluded that the Games can help increase participation in sport and deliver successful regeneration, but the investment needs to be focused. Barcelona in 1992 invested $9 billion in Olympic and infrastructural projects like housing, and transport. The city's wealth increased by 2.9% and over 20,000 jobs were created. At the next Games in 1996 Atlanta spent a tenth of that sum and was left with little job growth and little economic benefit - just a 0.07% increase in wealth. The IPPR applied the average economic gain from the previous four Olympics to London's bid and on that basis predict an increase in GDP of 1.8%. That's $4-$5 billion.

That sounds a lot, but London's annual GDP is almost £160 billion or $290 billion. The IPPR suggests that the key for London to maximise its social investment is to lock in regeneration spending early in the planning stages of the bid.

ANTHONY VIGOR:
(Institute for Public Policy Research)
The city the size of London with the size of its GDP will not receive a massive boost through hosting the Games. So the challenge has to be how do you lever the investment and focus that will be required to deliver the significant new infrastructure to actually deliver local and London-wide and even UK-wide benefits?

NISBET:
Father Michael knows where he'd like some of that investment to go, to ensure the area's young people, like these training in Waltham Forest, can have more opportunities when they leave school. He wants a so-called living wage of £6.70, effectively raising the minimum wage within the Olympic zone by £2 an hour. He's part of the campaign group London Citizens, which is also calling for local workers to be used on construction projects and affordable housing in perpetuity.

FATHER MICHAEL COPPS:
What we want in this charter is to say that this area is going to be regenerated. And that means that it's not shifting out of one population and letting in a new population, but that the actual area, with the specifics of this area are regenerated.

LONDON CITIZENS CAMPAIGN VIDEO:
30 years ago they promised our parents that Canary Wharf would bring jobs, security and new riches to the local community. What do we get? Some jobs for young people to sit in front of computer screens and very expensive houses.

NISBET:
London Citizens have made a video detailing their demands and they're threatening direct action if their charter is ignored.

FATHER MICHAEL COPPS:
We could say to the IOC when they visit London that we have tried to influence the bid for the Olympics. We've tried to put in our ideas and we've not been listened to. I don't think the IOC would be very happy if they heard that local people, who are trying to help get the Games, were not being listened to.

NISBET:
The Government in London 2012 say there isn't space for London's Citizens' Charter to be included in the bid when it's submitted to the IOC in November. But they have promised to consult the group and issue a letter of intent, outlining how far they're prepared to go in meeting their demands.

TESSA JOWELL MP:
(Secretary of State for Culture, Media & Sport)
When the closing ceremony is ended, it's important that people in Hackney, Tower Hamlets, Waltham Forest, Newham feel the Games have done something for us, for our community and they feel the sense of transformation too.

NISBET:
It's a difficult balance for London's bid team to address community concerns without making promises it can't keep. Winning the Games is the team's objective, improving the social infrastructure the hope of east Londoners. Whether the two can be synchronised will determine what kind of legacy can be left.

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This transcript was produced from the teletext subtitles that are generated live for Newsnight. It has been checked against the programme as broadcast, however Newsnight can accept no responsibility for any factual inaccuracies. We will be happy to correct serious errors.