AN EVALUATION OF THE COMMONWEALTH GAMES 2014 LEGACY: PRE-GAMES REPORT

3. Flourishing

3.1 The Scottish Government Legacy Plan includes the 'flourishing' theme. This theme is about maximising the potential of the Games to contribute to the growth of the Scottish economy. The following three intermediate outcomes are sought under the flourishing theme:

• increase growth of Scottish businesses
• increase movement into employment, training and volunteering
• improve the perception of Scotland as a world class destination for business, events and tourism.

3.2 As discussed in Chapter 2, the key questions for evaluation under the flourishing theme are:

• What effect have the Games had on the economy, businesses, employment, training and volunteering?
• What effect have the Games had on international reputation?

The Evidence: What do we know?

3.3 The evidence presented in this section is published in the fully referenced evidence review that accompanies this report ^[15].

3.4 The review suggests that major events can leave economic legacies. In the main, the benefits tend to be short-term, and may be confined to particular sectors and groups. The available evidence for longer-term economic legacy is limited. However, it is important to note that this does not necessarily mean that these outcomes are unachievable.

3.5 There is evidence from previous major sporting events that short-term increases in economic growth, employment and tourism are probable. In particular, there is often a boost to employment in the run up to, and during, the hosting of major events. These effects are commonly experienced in the specific location of the event (usually a city), rather than in the national economy, but they can have a substantial effect on local employment levels.

3.6 The review suggests that there is a clear pattern in terms of which sectors of the economy see growth in activity and at what juncture. The most significant effects are commonly in the construction industry when accompanied by large event-related capital programmes, though studies find that while there is a strong boost associated with the construction of the venues in the run up to the event, this falls away in the year of the event.

3.7 The same studies find that the other sectors which are boosted are usually hospitality and tourism. There is good evidence for a short-term boost to tourism spending, and to tourism numbers over the wider period of the event. A fall in visitor numbers has, however, been observed during some events. This was the case in London 2012 where fewer tourists actually visited the city, but those who did visit spent a significantly higher amount than average^[16].

3.8 While there is little evidence of a long-term boost to tourism as a result of hosting major events, some cities and nations have experienced a boost to their reputation and profile. There is often an increase in the reputation of the host city as a result of a major sporting event. Nevertheless, the impact is not always positive. There is the potential for a negative impact on the image of a city or region if the event is not seen as a success, or if it highlights a perceived weakness.

3.9 Evidence from previous events suggests that employment opportunities may not be evenly distributed. However, there is some evidence that, if effectively targeted, employment opportunities can reach the long-term unemployed, including those in the host areas. For example, there was a short-term boost to employment in the host-boroughs of the London 2012 Olympics, and this has had an effect on those who had been out of work for a significant period of time.

3.10 There is some limited evidence to suggest that a certain type of city or region benefits most from hosting major sporting events. In particular, these are often post-industrial cities which have the basis for significant growth, but where the economy has struggled to recover from the loss of major industries. Examples of this include Manchester, Barcelona and Turin.

3.11 Evidence suggests positive effects from volunteering as a result of the Games are possible. People that volunteer in major events often report an intention to volunteer again and report learning new skills and gains in confidence.

3.12 There is, however, a small body of evidence which suggests that those who gain volunteering positions at major sporting events tend to be those who already have key skills and tend to be regular volunteers at other events. Some commentators note that if a legacy objective is to engage more disadvantaged groups, volunteering programmes should be designed with extra training, funding and associated qualifications. This happened in the case of the Manchester 2002 Commonwealth Games.

3.13 Finally, there is a paucity of evidence on whether a long-term economic legacy is plausible. What evidence there is tells us that a step change to economic participation, productivity or international reputation is required. The evidence suggests that the Games-related activities could help to increase participation, by helping local people to gain skills and experience, and increase international reputation. The Games could, in theory, help boost productivity over the long-term by increasing business capacity and networks, but there is very limited long term research to establish whether this has happened in practice. Finally, the evidence shows that some host cities experience a boost to international reputation.

Glasgow 2014 Legacy Investment and Programmes

3.14 A number of national legacy programmes are underway to help capitalise on the Games. These are set out in Figure 3.2, below. More detailed information on the programmes and their early monitoring data is available on the Assessing Legacy 2014 website^[17]. Some of these national programmes are also being externally evaluated, or self-evaluated by the lead organisations. Evaluation data will be available for some programmes in our first legacy report in autumn 2015.

Figure 3.1. Flourishing National Legacy Programmes

Programme	Who is delivering it?
Increase Growth of Scottish Businesses
Building business capacity and awareness	A wide range of organisations including Glasgow City Council, Scottish Enterprise, Glasgow 2014, Scottish Government
International business profile	A partnership of Scottish Enterprise, Visit Scotland, Scottish Development International, Scottish Government and Glasgow City Council
Increase Movement into Employment, Training and Volunteering
Glasgow 2014 Employment	A wide range of employers are involved, including Glasgow 2014, and the Department of Work and Pensions
Legacy 2014 Employer Recruitment Incentives	Skills Development Scotland
Legacy 2014 Scotland's Best	Skills Development Scotland in conjunction with learning providers
Legacy 2014 ScotGap	Skills Development Scotland and the Scottish Funding Council have funded the separate segments
Host Broadcaster Training Initiative	SVGTV/Creative Loop
BP Young Leaders	Inspiring Scotland with the Dame Kelly Holmes Trust
Volunteering 2014	A partnership of organisations including Glasgow 2014 and the SQA
Improve the Perception of Scotland as a World Class Destination for Business, Events and Tourism
Securing major events	Event Scotland
Scotland Welcomes the World	Visit Scotland
2014 Food & Drink	The 2014 Food and Drink Team in collaboration with partners

Increase the growth of Scottish businesses

3.15 The national legacy programmes designed to contribute to increased levels of growth of Scottish businesses include the Building Business Capacity & Awareness and International Business Profile programmes.

3.16 The Building Business Capacity & Awareness programme is working with Scotland's business community to raise awareness of - and capacity to compete for - contracts for 2014 and beyond. This programme includes a wide range of activities, including:

• The Glasgow Business Portal - the portal (managed by GCC) is used to advertise and procure the goods, works and services required to deliver the Games and other public sector contracts within Glasgow.
• Business Engagement 2014 - a series of events to highlight the procurement opportunities that major events in 2014 can bring.
• Supplier Development Programme (SDP) - aims to assist small to medium sized enterprises to improve their performance in winning contracts with public sector organisations by providing information, support and training events to help unravel the tendering process^[18].

3.17 The International Business Profile programme is a series of targeted activity, using the Games and other international events in Scotland, to showcase Scotland's goods and services, develop relations with international markets and improve Scotland's reputation as a great place to do business. Examples of specific activity include:

• Global Sports Programme
• Commonwealth Games Business Conference
• Scotland House
• Scotland's Key Sectors Conferences
• Queen's Baton Relay (QBR)

Increase Movement into Employment, Training and Volunteering

3.18 Glasgow 2014 itself is, and will be, a source of jobs, training and volunteering opportunities. By Games-time, Glasgow 2014 expects to have around 1,400 directly employed staff in positions ranging from planning and marketing the Games to very specific Games-time delivery roles.

3.19 The Department of Work and Pensions (DWP) is working to support businesses who win contracts to fill and match vacancies using their matching service, 'Universal Jobmatch'. Further, Glasgow 2014 estimates that Games-time service delivery contracts may generate demand for up to 30,000 contracted positions.

3.20 The Games have also opened up additional pathways to employment through three specific Games-related programmes. These are:

• Legacy 2014 ScotGap - providing work and training in security services to students
• Host Broadcaster Initiative - providing practical training in live broadcast, creative production and technology skills to over 200 students
• BP Young Leaders - an 18 month programme that focuses on disadvantaged young people and their communities

3.21 The Scottish Government Legacy 2014 Young Persons' Fund aims to support 2,500 young people towards employment, and create a 'skills legacy' from the Games. The fund supports two programmes - the Legacy 2014 Employer Recruitment Incentive (ERI) and the Legacy 2014 Scotland's Best. The ERI awards £1,500 payments to help employers with fewer than 150 employees to support a 16-19 year old onto a Modern Apprenticeship (MA) in particular sectors. Legacy 2014 Scotland's Best is an employability programme combining volunteering and training opportunities for up to 1,000 young people aged 16 to 24 across Scotland.

3.22 Glasgow City Council (GCC) and partners are leading on additional employability and training programmes^[19]. GCC will be reporting in detail on these separately. But worthy of particular note is the commitment to Community Benefit Clauses for Games-related public sector contracts. GCC introduced the specific community clauses^[20] into the tendering process for major Commonwealth Games-related projects to create employment and business opportunities for local people and companies. Furthermore, the Glasgow Guarantee has secured employment and training opportunities for young people and the long-term unemployed.

3.23 Glasgow 2014 is responsible for recruiting and training up to 15,000 Games-time Volunteers (to become clyde-siders) for the event itself. The Legacy 2014 Volunteer Support Programme is a £500,000 BIG Lottery Fund supported initiative to help people overcome practical and financial barriers to volunteering. The fund, managed by Volunteer Scotland, will support up to 500 successful volunteer applicants.

3.24 Volunteer Scotland have provided a service since 2011 which is aimed at connecting event organisers with those interested in volunteering at events of all sizes throughout Scotland. Partners are promoting this service to the events industry. There are approximately 2400 people currently registered.

3.25 Finally, and worthy of particular note, Glasgow Life is delivering one of Glasgow City Council's 80 legacy projects, the Glasgow Host City Volunteer Programme^[21]. It aims to maximise the potential impact of the Games on civic pride, volunteering legacy aspirations, and communities in the host city. Up to 1,500 people from communities in Glasgow underrepresented in the Glasgow 2014 volunteering programme will be supported to become Host City Volunteers. The programme also has a community engagement and active citizenship programme.

Improve the Perception of Scotland as a World Class Destination for Business, Events and Tourism

3.26 EventScotland and partners, including Glasgow's Strategic Major Events Forum members, are aiming to capitalise on the Games to secure major events in Scotland up to and beyond 2014 using the newly-constructed and refurbished Games venues and the 17 competition sports. To date, 37 national and international events have been secured, with an estimated economic impact of over £14 million.

3.27 Under the banner of 'Scotland Welcomes the World', VisitScotland have launched both domestic and international marketing campaigns, highlighting Scotland's tourism offering. Partners are also using the Queen's Baton Relay to hold media and trade events in key overseas and domestic markets in the lead up to the Games.

3.28 VisitScotland is also working with partners to deliver the 'Accessible Tourism' programme which aims to improve the level of service provided by the Scottish tourism industry. Furthermore, the Greener Glasgow Tourism Project is encouraging all accommodation contracted for the Games to be part of an environmental accreditation scheme.

3.29 The Scotland 2014 Food and Drink Team is working in collaboration with partners to capitalise on the Commonwealth Games and the wider 'Year of 2014' to showcase Scotland's produce to the world. The programme will undertake a wide range of activities with the overall aim of increasing the value of the Scottish Food and Drink sector to £16.5 billion by 2017.

What's the current position? Key data and trends since baseline

3.30 This section describes the evidence we have to date which can help assess the effect of the Games on the economy, businesses, employment, volunteering and international reputation. Clearly in many cases it is too early to make any assessment of the Games effect, however, we have some early information on the pre-Games position.

3.31 Broadly speaking, the picture described by the flourishing indicators (Annex 2) is unremarkable at this stage, with some measures of the economy at the national and Glasgow level showing signs of recovery following the significant global downturn in 2008.

3.32 As noted earlier, the evidence review shows that specific sectors of the economy are likely to be affected most by the hosting of the Commonwealth Games. A sector in which we might expect to see an effect of the Games, at this stage, is construction.

3.33 Notably, in the case of the Glasgow 2014 Commonwealth Games, 70% of the venues were already in place at the time of bidding, although some refurbishment was required. As we set out later, this bodes well for a sustainable infrastructure post-Games. However, this also means that the economic impact of construction may be less than for other major similar sporting events. Nevertheless, the wider regeneration effort in the East End of Glasgow has also supported GVA and jobs since 2008. Indeed, the regeneration effort will be a key contributor to both economic and social legacies from the Games. (See Chapter 4).

3.34 The early modelling work shows that the £500 million spending on construction and refurbishment of Games venues and the Athletes' Village over the six years leading to 2014 is estimated to support on average around 1,000 jobs and contribute £52 million to Scotland's GVA in each year. As the map below demonstrates, much of the construction and refurbishment of venues has taken place in the Glasgow area.

Figure 3.2 : Glasgow 2014 Commonwealth Games Venues

3.35 Furthermore, the £100 million spending in Glasgow and South Lanarkshire by Clyde Gateway URC to help create a regenerated, well-designed and sustainable community in the East End of Glasgow over the six year to the Games is estimated to support around 200 jobs, on average, and contribute £10 million to Scotland's GVA in each year.

3.36 There is also good evidence from previous major sporting events for a short-term boost to tourism numbers and spending. Based on this evidence and on ticket sales/allocations for the Glasgow 2014 Commonwealth Games we would expect to see an increase in visitors and visitor expenditure in 2014 - both domestic and international.

3.37 Overall, a minimum of 70% of the Glasgow 2014 Commonwealth Games tickets were publicly available, with a further 9% allocation to Commonwealth Games associations and the CGF, 8% for sponsors, 7% for broadcast partners and 1% for Games partners^[22]. After the application phase in November 2013, more than half of the public tickets (57%) were allocated to addresses in Scotland; a further 40% were allocated to addresses in England; and 3% to addresses in the rest of the UK and overseas.

3.38 It is estimated that for each £100 million of tourism spend in 2014, around 1,300 FTE jobs will be supported and will contribute £45 million to Scottish GVA, with 70% of supported jobs in the distribution and catering sectors. Spending by tourists in Scotland generates £10 billion of economic activity in the wider Scottish supply chain and contributes £5 billion to Scottish GDP. This represents just under 5% of total Scottish GDP.

3.39 The combined domestic and international overnight tourism visits and spend in Scotland has remained broadly stable since 2008, at roughly 15.0 million visits and £4.3 billion expenditure. Total overnight and day visitor expenditure in Scotland was around £9 billion in 2012. The Visitor Impact Study we have commissioned will provide data on visitor profiles and expenditure at Games-time.

3.40 The perception of Scotland and Glasgow as a place for tourism has remained relatively stable since 2008, according to the Nations Brand Index (NBI^SM). This is in line with the evidence review which suggests that any change in the perception of the host of major events is most likely after the event takes place. The NBI^SM also shows that Scotland's perceived strengths continuing to be in its natural beauty rather than in its cities. This suggests there may be an opportunity to improve the perception of the cities' domain during the Games.

3.41 Glasgow 2014 was incorporated in 2007 and is classified under the Standard Industrial Classification (SIC) within sports activity and recreation education. A direct result is that Glasgow 2014 will contribute to the performance of the sports activity and recreation education sector, especially in Glasgow, alongside other factors. This has yet to show in the indicators on GVA and employment, given that most Glasgow 2014 activity has taken place after 2011.

3.42 However, as mentioned above, we do know that Glasgow 2014, as an organisation, has been growing and is supporting jobs, training and volunteering up to 2014. By Games-time, Glasgow 2014 expects to have approximately 1,400 directly employed staff. Furthermore, Glasgow 2014 estimates that Games delivery contracts will potentially support up to 30,000 contracted positions. However, we will be providing estimates for the GVA and jobs supported by Glasgow 2014 separately when final outturn data is available after the Games using the Scottish Government Input-Output (IO) methodology framework.

3.43 The latest position in terms of Games-related contracts is that nearly three quarters of all agreed contracts have been awarded to Scottish companies (73%)^[23]. In value terms, this equates to £257 million, which is 82% of the total value of Tier 1 contacts procured. Businesses from across Scotland (representing 23 local authority areas) have won contracts and there are nearly £20 million worth of contracts still being tendered by Glasgow 2014^[24].

3.44 The evidence review suggests some potential for the development of the Creative Industries sector as a result of hosting major events. The impact of the 2008 downturn is also evident in this sector, although with a more robust recovery both in Glasgow, and across Scotland. This will remain an important indicator to track, particularly as Glasgow accounts for a significant proportion of Scottish GVA in the sector.

3.45 As aforementioned in paragraph 3.26, there may be particular scope for growing the events industry by using the Games infrastructure and developing skills base (paid and voluntary) to attract national and international sporting events. To date, 37 national and international events in Games venues have been secured, both before and after the Games, at an economic value of over £14 million.

3.46 There is evidence that, if effectively targeted, employment opportunities can reach the long-term unemployed, including those in the host areas. Such short-term employment may reduce the distance from permanent labour market opportunities. Overall, national legacy programmes have the potential to deliver over 5,000 employment and training opportunities across Scotland. Additional opportunities are already being delivered through the Glasgow Guarantee, one of Glasgow's 80 legacy projects.

3.47 In terms of the 'host' area, there is data from GoWell East baseline survey that explores the early effects of the Games on employment and training. It found that 7% or respondents aged 16-64 years old had undertaken paid employment related to the construction or operation of the new Games facilities or related improvement projects in the area in the period 2011-12. Further just over 15% of working age adults identified their recent or current training, apprenticeship or work experience to be associated with a Games or regeneration project in the area over the same period.

3.48 The evidence suggests some positive effects from volunteering as a result of the Games are plausible, although those who gain volunteering positions at major sporting events tend to be those who already have key skills and tend to be regular volunteers at other events. Engaging more disadvantaged groups requires volunteering programmes to include extra training, funding and associated qualifications.

3.49 Interest in the volunteer opportunities for the Glasgow 2014 Commonwealth Games is high. There were up to 50,000 applications to the Glasgow 2014 Volunteer programme and 15,000 clyde-siders have been recruited. There have now been over 1,000 applications from these volunteers for the Volunteer Support Programme. Data from all Glasgow 2014 volunteer applicants who have given their permission will be transferred to the aforementioned Volunteer Scotland database.

3.50 Data from a baseline survey of Glasgow 2014 volunteer applicants suggests that most applicants had recent experience of volunteering in a formal capacity (83%) in the past 12 months^[25]. Furthermore, over a third (35%) had volunteered in a sporting capacity over the past 12 months. The main motivations for applying were: to participate in the excitement of the Glasgow 2014 Commonwealth Games (89%), to use my skills (61%), and to make a positive difference to the community (52%). This chimes with previous research on volunteer profiles at major sporting events.

3.51 As aforementioned in paragraph 3.25, Glasgow City Council and Glasgow Life are also leading the Glasgow Host City Volunteer Programme. Up to 1,500 people from communities in Glasgow underrepresented in the Glasgow 2014 volunteering programme will be supported to volunteer during the Games. An evaluation is underway and will report in 2015.

3.52 GoWell East respondents were asked if they intended to get involved in volunteering at Glasgow 2014 Commonwealth Games. Almost a quarter (24%) said they wanted to volunteer during the Games. We will be able to establish at Sweep 2 whether these respondents actually volunteered as a clyde-sider or at any other Games-related volunteering programme.

Prospective Assessment and Summary

3.53 Overall, both the evidence on previous major sporting events, and the preparation to date, suggests that the Glasgow 2014 Commonwealth Games should make a short-term contribution to the Scottish economy.

3.54 There is evidence that, if effectively targeted, employment opportunities can reach the long-term unemployed, including those in the host areas. Games partners have been working to leverage legacy from infrastructure investments and contracting in terms of employment, training and volunteering.

3.55 There is a lack of evidence on the plausibility of achieving long-term economic legacy from major sporting events. Longer-term legacy appears to be dependent on a step change in participation, productivity or international reputation. This evaluation will add to that evidence base.

3.56 A prospective assessment for the Glasgow 2014 Commonwealth Games is presented in the final chapter.