National Lottery funding

The 2004 Track Cycling World Cup event in Manchester.

Under the auspices of UK Sport's World Class Events Programme, the Sports Lottery Fund has been responsible for helping to attract eleven of the events analysed. UK Sport commissioned these evaluations in order to gauge people's perceptions to such investment and also to examine the monetary return (in additional expenditure terms).

The reporting of the findings from a number of the studies undertaken to date plus additional analyses examining the total number of commercial bed-nights generated by (part) Lottery funded events, could contribute to the case for continued support of major events.

Spectators at some events were asked if they were in favour of Lottery support for major events. The data from the 5 events in Graph 21 suggests that there is considerable support for the policy adopted under the WCEP with positive feedback from each event. The lowest approval ratings from the World Judo, reflect the relatively high percentage of visitors from the rest of the world (38%).

Although UK Sport's focus for supporting events is far broader than economic impact alone, a useful measure involves gauging the return on Lottery investment according to the absolute economic impact per £1 of Lottery support. A similar measure to this is adopted in Australia where there is evidence at state level that promoters of events using public funds do so on the understanding that there will be a quantified economic impact arising from the investment of such funds. The event promoters will not consider renewing the support for an event unless they achieve a return of AUS$7 for every AUS$1 invested in staging the event.

The return on Lottery investment is summarised in Graph 22 and this indicates that many of the eleven events referred to get close to or exceed the return ratio of 7:1, while other events such as the World Indoor Athletics do not. This highlights that there is more to staging events than monetary returns on investment; there are also issues such as international prestige, home advantage for our athletes and trying to encourage and enthuse our youngsters, to consider when staging such high profile events. The exceptional return at the World Cup Triathlon skews the results such that the average return per £1 of Lottery investment is perhaps overstated; mainly because the Lottery support is only 13% of the total event costs. Consequently, the median or mid point score is perhaps a more realistic estimate at £7.23 of the typical additional local expenditure for every £1 of Lottery money spent in support of an event.

Graph 21: Spectators' feelings on the use of Lottery funds to support major sports events

Graph 22: The additional expenditure return for every £1 of Lottery support

Despite the comments in the previous paragraph, it is perhaps worth making the point that it takes considerable investment by governing bodies and local authorities as well as Lottery support in order to host major events. Hence, the data reported in Graph 22 provides only part of the story as it does not assess the return on the overall public funding cost of hosting an event, which, although beyond the scope of this research, by way of an example was £5.59 for every £1 of the £298,000 it cost to stage the World Cup Triathlon.

Finally, as a gauge to the success of major events in generating economic activity in the host economy, Graph 23 details the overall number of commercial bed-nights generated by ten of the eleven events supported by the Lottery. The World Indoor Athletics (in Birmingham) generated the most commercial bed-nights (approaching 22,000) of all the Lottery supported events, with the majority attributable to athletes/international delegations and spectators. The World Judo (also in Birmingham) and World Amateur Boxing (in Belfast) generated almost 14,000 and 10,000 commercial bed-nights respectively and these were predominantly a result of competitors and to a lesser extent visiting spectators.

Graph 23: Commercial bed nights at (10 of 11) Lottery supported events

The figure for the World Cup Triathlon includes a relatively small number of non-commercial bed-nights. However, by removing the proportion of non-commercial stayers based on the percentage for this group at both the World Indoor Athletics and Spar Europa Cup (17%), this results in an estimate of 6,794 commercial bed-nights at the Triathlon.

The other events referred to in this report although not supported by the Lottery also generated numerous commercial bed-nights. In particular, the Flora London Marathon and 1st Ashes Test Match were responsible for 115,267 and 30,780 commercial bed-nights respectively in the London and Birmingham economies. Once again the figure for the FLM demonstrates the sheer scale of the event and the combined pull or attraction of London plus the ultimate physical challenge.

Using the estimated figure for commercial bed-nights at the Triathlon, the ten events detailed in Graph 23 have generated almost 82,000 commercial bed-nights between them from overall Lottery support of £2.36m. If one uses the average cost of a commercial bed-night across all Lottery supported events (£53.86); the overall additional expenditure attributable to accommodation in host economies amounts to £4.4m (34%) of the overall impact for all ten events of £13.1m.

In summary, relative to the use of public subsidies via the Lottery,

• Investment in events from the Lottery supported WCEP has received high approval ratings from spectators.
• A typical return on the investment of £1 from the Lottery (excluding the findings from the Triathlon) is £7.91.

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