The Olympics and the concrete mixer theory of regeneration

Town & Country Planning, July/August 2008

"A second marriage is the triumph of hope over experience," said Samuel Johnson You might say the same thing about the regeneration potential of the Olympic Games.

All the Olympics of recent times have swallowed the myth of their own regeneration potential, along with unbelievable sums of money. But the research confirms that the main beneficiaries of the Athens and Barcelona Olympics were developers and migrant and transient workers, and that unemployment rates were pretty much back to what they had been before all the excitement a few months later.

What the Olympics does bring consistently is gentrification. The last four Games cities have seen house price rises well above the national average for five years before the actual jollities took place.

Yet here is the winning London bid for the 2012 Olympics putting regeneration at the very heart of what they were promising – or 'legacy' as people like Sebastian Coe put it.

That is fine and inspiring, and it is a promise to the world on our behalf that we all need to take seriously. The problem is that our Olympic plans so far seem to include very little that seems remotely likely to provide this legacy. The plans continue to assume, against all the evidence, that you can hand over wads of cash to multinationals and ask them to rebuild rundown neighbourhoods and – hey presto! – you have regeneration.

You might call this the concrete mixer approach to regeneration, and it is accepted without demur or apparent quibble by Whitehall.

Time after time, over the past generation, it becomes clear that this kind of centralised regeneration is well able to rebuild the fabric. We know they can churn out bright new shopping centres, exclusive marinas and luxury flats. But we also know that they fail the people who live there, and are very quickly driven out, and often corrode the economies of the very places they were trying to help.

Why can't government or industry learn this? Partly because one of the characteristics of centralised government is their inability to see what is actually happening on the ground very clearly. Partly because they are deeply nervous about what they have to do to succeed – hand over power and resources to the locals.

The real problem is that the concrete mixer theory, and our current plans for the Olympics, assume that investment flowing into deprived areas will stay put. In practice, it actually leaks out to all those consultants, developers and large companies which are best able to exploit new commercial opportunities.

When my own think-tank, the New Economics Foundation published research on the situation, they could find Only 11 per cent of contracts so far which had gone to companies based within the five Olympic boroughs.

Nor can local organisations in the Lea Valley capitalise on their closeness. Because the major sponsors are protected by strict branding rules which prevent local companies or charities from drawing attention to their links with the Games. Just living next door isn't enough.

Real regeneration is about building up local businesses, revitalising local enterprise, making the best use of assets and giving local people a real stake in them. It is about using those vast sums that flow briefly through the local economy and finding ways they can stay circulating.

But the Olympic authorities don't get this. We have the Athlete's Village, which was the subject of a Section 106 agreement even before London won the Games, and which will – quite rightly – be handed over to a community development trust after the Games, together with an endowment of £1 million.

The developer Lendlease will be bound by this and there is already a site proposed for the new community facility, the health centre and the educational campus. That is a legacy of a kind.

But the actual ownership of the facility will stay with the developer under the terms of the agreement, so there are already restrictions on what the new development trust can do without owning the freehold.

It means that the new development trust will have to be supplicants to the owners right from the start. They will not be able to use the buildings as collateral for any kind of expansion. Because they will actually own none of the new assets handed over under the legacy, they will have no future revenue streams apart from interest on the endowment.

It isn't too late. The new London mayor has been worrying way at the problem, but you do wonder why the great centralised regeneration myth – that regeneration has to be done too people rather than with them – still holds such sway.

In an age of so-called evidence-based policy, where is the evidence?