International sporting events should use local contractors more, report says

‘Mega’ sporting events deliver better benefits for residents when local companies are contracted, research has found.

Mega-events are categorised as those which have been developed primarily to enhance the ‘awareness, appeal and profitability’ of a destination including motor sports such as Formula 1 and athletics events like the Commonwealth Games, which Birmingham will be holding in 2022.

Birmingham City University examined the impact these ‘mega-events’ have on their local economies and residents and found that the events brought with them economic, social and cultural benefits as well as employment opportunities, long term infrastructure and enhanced international profile.

But they said when organisers use local contractors during the event planning and construction it could help drive down the prices of larger corporations and provide much-needed investment directly into the local and regional economies.

Speaking about the impact local contractors could have on boosting the economic outputs of mega-events, lead researcher David Chamberlain said: ‘Diversifying the workforce by including local contractors could represent a viable risk mitigation strategy and be beneficial to the local economy and stimulating further growth locally and city-wide.

‘Encouraging global workforces to compete with local contractors, costs should be driven down to the benefit of the stakeholders without sacrificing the quality of the workforce used.’

Earlier this year, NewStart reported on 2022 Games, which has faced criticism from residents over costs.

Birmingham City Council investment to the Games will be significant, with the authority contributing 25% of the £750m total cost, with the government paying the rest.

However, auditors Grant Thornton issued the council with an unprecedented third Section 24 notice of the Local Audit and Accountability Act in March, which laid out the authorities precarious financial position.

To pay for the Games, the council have a £40m funding gap from their revenue account, and of their capital contribution of £145.1m, £19.7m is being diverted from other projects in the city.

Unpopular measures such as a hotel tax, airport levy, parking levy and new business rates have all been mooted as money generators to try and plug the gap for the council.