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Britain claims $15 bn boost from Olympics

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(Globalpost/GlobalPost)

The British government claimed on Friday that last year's Olympic Games in London gave the economy a massive boost, even while acknowledging that some of the investment might have happened anyway.

An official report said the Games had brought £9.9 billion (11.5 billion euros, $15 billion) to the British economy, more than the £8.92 billion cost of staging the event.

But analysts questioned some of the projects included in the study, including a £1 billion planned shopping centre in Croydon, south London -- miles from the Olympic site.

Business Secretary Vince Cable said the report was compiled by asking the companies making investments whether they would have spent their money without the Games.

"The answer we've had with a lot of the high-profile investment -- like the Malaysians in Battersea Power Station -- is that a lot of the key negotiations and support came out of the events that we organised around the Olympics," he told BBC radio.

"Would this have happened anyway? Some of these activities clearly would, but the Olympics were a key catalyst in making those investment decisions real."

Cable said he had personally been sceptical about the Games before Britain won the bid, warning that it would be "a big cost and there would be no benefit".

But he said ministers had put in "an enormous amount of effort" to attract investment around the Olympics.

The Olympics and Paralympics last summer were viewed as a huge success in Britain, passing off without any major problems, netting the hosts 29 gold medals and even coming in slightly under budget.

But the government has always stressed the importance of the economic and sporting legacy, and the report claims progress on at least the first of these is going well.

The £9.9 billion boost to the economy comes from businesses securing new contracts, additional sales and new foreign investment in the last year, the government said.

As well as the shopping centre, this includes the £1.2 billion regeneration of London's Royal Albert Docks by a Chinese developer, and the redevelopment of the landmark Battersea Power Station on the River Thames by a Malaysian consortium.

-- 'Tenuous claims' --

Samuel Tombs, economist at Capital Economics, said the report "seems to make some tenuous claims".

"It's hard to believe that the Games were the decisive factor in many of the business deals discussed in the report," he told AFP, adding that the money spent on the event would have been better invested elsewhere.

Mayor of London Boris Johnson insisted, however: "London is succeeding where virtually no other host city has, on track to secure a solid gold payback on the taxpayers' outlay."

The government says that 58 percent of the investment from the Games had gone into areas of Britain outside London, although some business leaders questioned this.

"Out in the regions, we found that the effect of the Olympics and Paralympics and the contracts we were expecting really didn't materialise as much as I suspect many people were hoping for," said Mike Cherry, national policy chairman for the Federation of Small Businesses.

Howard Archer, chief European and UK economist at IHS Global Insight consultancy, said it was always hard to put a figure on economic benefits from an event like the Olympics.

"There is always the possibility that some of the investment/business deals that were brokered would eventually have been won anyway even if the Olympics did significantly help matters," he told AFP.

"However, I think the fact that the Olympics were so well staged and were such a success did reflect very well on the UK and boosted our reputation for efficiency and as a country for doing business."

The question of whether the Games have inspired Britons to take up sport is less clear.

A recent survey by Sport England, cited in Friday's report, found an extra 1.4 million are playing sport at least once a week than before Britain won its bid in 2005.

But it also found that 52.3 percent of British adults still play no sport at all.

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http://www.globalpost.com/dispatch/news/afp/130719/britain-claims-15-bn-boost-olympics