Nice strategy, but where's the money?

01 August 2006
Nice strategy, but where's the money?

The Government's consultation on creating a tourism strategy to maximise the benefits of the 2012 Olympic Games will be undermined by its failure to put any new money behind the effort, argues Kurt Janson, policy director at the Tourism Alliance

The Department of Culture, Media and Sport (DCMS) has launched its consultation document on the development of a tourism strategy for the 2012 Olympic Games.

As it estimates that tourism will reap between 50-75% of the potential £1.4b-£2b benefit of the Games, it is important that a strong and focused tourism strategy is in place to maximise the gains.

And the consultation document gets off to the right start with sections on ensuring that the proper structures are in place, that the quality of tourism products and services is improved, that tourism staff have the training and skills required to provide the level of service required, and that overseas visitors are made to feel welcome when they arrive in the country.

This is all very sensible stuff and DCMS is keen to elicit innovative and creative proposals on how to achieve these aims, with the Secretary of State going as far as to say that "Everyone who responds can be confident that their comments will be considered seriously."

Indeed, the document provides a series of 21 questions that seek to focus respondents' thinking on to what needs to be done in the lead-up to, during, and after the Games to wring the maximum benefit out of London and the UK being the centre of world attention for two weeks.

However, there is one core issue that is not mentioned anywhere in the document - and this is funding.

There are any number of initiatives that can be undertaken to improve the performance of the tourism sector in the lead-up to the Olympic Games but there needs to be a commitment on behalf of Government to contribute the resources needed to make them a reality.

Yet DCMS claims that additional funding is not required. Its takes the view that the £300m the Government already spends on tourism is more than adequate. So rather than committing additional resources, DCMS believes that the goals of the strategy can be achieved simply by using existing resources more effectively and efficiently.

However, the major problem with this approach is that the £300m figure is only derived through sleight-of-hand. First, it includes £110m in funding from the Scottish Parliament, Welsh Assembly and Northern Ireland for the operation of their national tourist boards. This is funding that DCMS and Westminster have no control over.

Second, it also includes £40m that the Regional Development Agencies (RDAs) allocate from their budgets towards tourism. While a small amount of this comes from DCMS, the vast majority comes from the Department of Trade and Industry - meaning that DCMS has very little, if any, control over how the RDAs choose to spend their funds.

Lastly, £122m is money spent by local authorities. Most of this expenditure goes on things like Tourism Information Centres and the maintenance of tourism services and facilities. Again, DCMS has no control over this expenditure.

So, of the £300m, DCMS is only able to control about £54m. It is also worth noting that this level of funding has not increased for 10 years.

While this is still a substantial amount, it is worth putting it into context. Tourism Australia's Where the bloody hell are you?

So we face the situation that, while £2.4b of public and lottery money will be spent on holding the Olympic Games, DCMS is putting together a tourism strategy with which it hopes to gain up to £2b in additional revenue based on a level of funding that, by the time of the Games, will not have changed for 15 years.

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