White Elephant: How Manchester Avoided A London Mistake

SADIQ Khan, the Mayor of London, has a lot on his plate in running Europe's largest capital. Many of the issues in administering London he might have expected but some he was probably hoping to avoid. 

The rental agreement with (Manchester City) brings in millions of pounds a year which are reinvested in sports facilities and community amenities in east Manchester and elsewhere in the city

The rising costs to the city of the former 2012 Olympic Stadium, now West Ham United's London Stadium, are becoming a serious concern. Khan has ordered an independent inquiry and you can see why.

The stadium was built for the London Olympics at a cost of £486m. Recently the costs of conversion to a football stadium rose by £51m to £323m. This means the overall cost will top more than £800m.

Perhaps the biggest puzzle lies over a £300,000 projected cost to replace the seating in the now 60,000 capacity stadium. £300k? Pah. The total price has come in at £8m. Some seats.  

West Ham have contributed but not nearly as much as you'd think. Remember this is a Premier League football club in the heady days following the £5.14bn TV 'domestic rights' deal announced in 2015. This sum will be shared amongst the clubs but there may be £3bn more brought in from securing other deals across the world. West Ham's £2.5m yearly rent plus a £15m conversion cost contribution (less than 2% of the final stadium bill) is therefore miniscule. The bloated remainder will be funded by the taxpayer, including large sums from strapped East London councils.

Khan has called the situation, a 'total and utter mess'. Meanwhile John O’Connell, chief executive of the TaxPayers’ Alliance, has been quoted in The Guardian saying: “For too long the details of this shabby deal (over the West Ham move) were kept in secret and lacked proper scrutiny. But instead of focusing our anger on West Ham for taking advantage of this ludicrously generous taxpayer funded subsidy, we should instead be demanding explanations from those that signed off on this agreement and asking how they ever thought that this offered value to those of us footing the bill.”

Further practical issues have risen which challenge the notion of good value. While retaining the athletics track will prove useful for occasional athletics meets it fails in terms of football stadium design, pushing the crowd away from the action and killing atmosphere. Nor has technological and design failings which led to a stand-off between the police and the club over security at matches helped. After trouble between West Ham and Chelsea fans in late October the club is now under investigation by the Football Association. 

The problem stems from a lack of preparedness for life after the Olympics, with at one point in the planning stage, the former Mayor, Boris Johnson, declaring 'there was no legacy plan'. Delays and a legal wrangle between Tottenham Hotspur and West Ham between who should take over the stadium meant it took four years after the Games for a paying (no matter how modest an amount) tenant to move in.

The London Stadium

Manchester Confidential is very aware how different things were in Manchester in preparations for the Commonwealth Games of 2002. A determination to avoid another major games 'white elephant' was clear very early on. Indeed the agreement with Manchester City to take over the City of Manchester stadium was signed in 1997, fully five years before the Games. This meant conversion began immediately after August 2002 so the stadium could be football ready, without the running track, for the 2003/4 season creating a 48,000 capacity football stadium from a 38,000 capacity athletics stadium. After recent expansion the current capacity is just over 55,000.

Sir Richard Leese, Leader of Manchester City Council, told Confidential: "In our planning for the 2002 Commonwealth Games, we determined that it was essential the stadium did not become a white elephant or an ongoing burden to the taxpayer. Above all, it needed to have a legacy as a catalyst for the regeneration of the area. This meant it needed a permanent tenant. Manchester City FC, whose Maine Road home had become outdated and were looking for a new home for the modern era, proved the ideal fit.

"The original budget for the Games covered funding to both build the stadium as a multi-sports venue and convert it into a football stadium afterwards, with a contribution from the club to support their specific fit-out requirements. A single contractor covered both phases of work. 

"The stadium remains in the ownership of the Council, with City paying rent under a 250-year lease - generating a long-term, ongoing income for the Council. No stadium management or match day costs are borne by the taxpayer. Indeed, the rental agreement with the club brings in millions of pounds a year which are reinvested in sports facilities and community amenities in east Manchester and elsewhere in the city. The stadium has provided a platform which has attracted further investment in the club and the regeneration of the wider area, not least by the club's owners." 

The difference in how much the two stadiums cost is astonishing. Ok, we're talking ten years between 2002 and the Olympics of 2012 and longer between the stadium conversions but Manchester's £154m still seems a snip compared to £800m. At the same time it seems odd that West Ham's contribution to their new stadium's conversion of £15m in 2016 is £5m less than City's contribution in 2002 of £20m.

The legacy of the Commonwealth Games is largely uncontroversial and aside from the Stadium delivered a 'gold medal factory' at the nearby Velodrome. Meanwhile the partnership with Etihad has led to hundreds of millions of pounds of investment in the Etihad Campus, the English Institute of Sport plus investment in housing and infrastructure in the area.

It hasn't been all plain sailing but this is a definite Manchester success story. It might have been a bigger one too. When the original Wembley Stadium was deemed obsolete, the Football Association announced a competition in 1995 between cities to host a new national football stadium. Manchester, Birmingham and London were in the mix and Manchester won.

But that wasn't to be allowed. The Football Association, despite an independent panel choosing Manchester as the best location, engineered a situation that meant the national football stadium remained at Wembley. Another word for 'engineered' in this context is cheating. As an aside, the Wembley costs spiralled out of control and topped out at over £750m. So Manchester got its stadium for £154m while one converted Olympics stadium and one national football stadium in the capital will have cost around £1.6bn.  

The comparison between Manchester in 2002 and the present row in London over the prolonged and expensive conversion of the London Stadium is revealing. It shows there can be a right way and a wrong way to go about delivering publicly funded large-scale sporting events and their legacy. To do it right you need a clear plan before, during and after the show leaves town. 

The organisers and leaders of London's Olympic bid should have been humble enough to learn from Manchester. That would have saved Sadiq Khan a headache but more importantly saved the taxpayer a fortune in hard-earned cash.