Economania

Seeking always to be topical, if nothing else, I thought that for this edition I would look at the Olympics. At time of writing the Olympic Flag has now been passed to Rio de Janeiro and the Olympic circus is leaving London town. I will confess at the outset to a complete indifference where sport is concerned: my only exposure to matters Olympic was by way of the general television news - which seemed to consist of little but the Olympics and in particular, Britain's medal haul. It would be churlish of me to dismiss the achievements of the British Olympic team: it takes years of unstinting dedication to achieve that level of performance and merely watching Sir Chris Hoy in training brings me out in a sweat.

Boris Johnson, mayor of London - if you hadn't noticed - quite rightly applauded the team that organised the 2012 London Olympics for an outstanding job and I'll confess to being pleasantly surprised at the way it all turned out. Johnson noted that the Olympics had been delivered on time and within budget. He was absolutely right on the former but the latter requires some qualification: the London Olympics did come in within the 9.3 billion final budget - but that was four times greater than the original figure of 2.4 billion! Even the Channel Tunnel only went about twice over its original budget.

In 1996, at the Atlanta Olympics, Britain won a mere 15 medals, of which only one was gold. Questions were asked in the House and in 1997, Lottery money was directed to the end of improving Britain's sporting achievement o on the international stage. By the time of the 2000 Sydney Olympics, Britain has spent 60 million on its team and the dividend came in the form of 28 medals, of which 11 were gold. For the Athens Olympics, a similar amount of 70 million had been spent, returning 30 medals. For the 2008 Beijing Olympics, 235 million was spent, 47 medals being the harvest. For these 2012 London Olympics, 264 million was spent on Team GB, securing 65 medals in total - 29 gold, 17 silver and 19 bronze: Britain's Olympians had come a long way since Atlanta.

While not wishing to detract from the magnitude of the achievement, it is sobering to realise that each British medal has cost over 4 million pounds. That is awfully expensive metal and given that an Olympic gold medal actually contains only 6 grammes of gold, worth about 450, it is not, in my view, a very good investment. Even when spread across the total number of British entrants (554) to the 2012 games, it is still a very expensive business. Where else in th in the British economy would we be prepared to spend over 475,000 per head over 4 years with no guarantee of a return?

Certain other facts come to light. The Telegraph, a newspaper not noted for leaning to the left, observes that of the British Olympic medallists, 37 percent were alumni of fee-paying schools. Quoting research by the Sutton Trust, the Telegraph further confirms that over a quarter of the gold medallists were from independent schools. The Telegraph further notes that:-

"Independent school pupils were particularly well represented in rowing, sailing and equestrianism."

Yes, well they would be, wouldn't they? I doubt very much that Gasworks Lane Secondary School can afford much in the way of stabling, boat-houses or lakes. By way of contrast, all of Team GB's boxing medallists are believed to have attended state schools, including gold medallists Anthony Joshua, Luke Campbell and Nicola Adams. Of the money from the Lottery Fund spent on British Olympic contenders, thee greater part was spent on the 'elite' sports - the largest amounts of UK Sport money were spent on rowing and cycling, 27 million and 26 million respectively. To emphasise the point, Professor Stefan Szymanski of the University of Michigan, said:-

"Lottery funding in the 90s has a lot to do with [Great Britain's recent success]..."

The performance of the Olympic team reveals some broader truths about Britain. As Richard Anderson of the BBC said:-

"Talent, punishing training regimes, pride in a home games and fervent support have of course played a key part in so many record-breaking performances. But, in the end, as cynical and unpalatable as it may sound, the main reason behind the team's overall success is cold, hard cash."

To put it bluntly, one can have all the talent in the world but without the financial resources to foster and develop that talent, it will amount to very little. The disproportionate representation of the privately educated in the Olymympic medal tables reflects their similarly disproportionate representation in other fields such as politics and the media. A recent BBC Radio 4 programme in the' Thinking Allowed' series reported the results of research presented at the British Sociological Association's 2012 conference by Professor Irena Grugulis, which demonstrated the extent to which the media are dominated by those from private schools and who are alumni of Oxford and Cambridge, universities which themselves draw their intake disproportionately from public schools. The research also highlights the degree of nepotism in the media and the extent to which one's 'social capital', that is, one's network of contacts, is the principal means of securing entry to the gilded world of the media.

Research by Dr. J Blanden and Professor S Machin, presented by the Sutton Trust (Low social mobility in the UK has not improved in 30 years, 31/12/07), confirms that:-

"Social mobility in the UK remains at the low level it was for those born in 1970, with recent generations of children's educational outcomes still overwhelmingly tied to their parents' income, according to the latest Sutton Trust research released today."

The main findings of the work by Dr Jo Blanden and Professor Stephen Machin show that:-

• Intergenerational income mobility for children born in the period 1970-2000 has stabilised, following the sharp decline that occurred for children born in 1970 compared with those born in 1958.
• However, the UK remains very low on the international rankings of social mobility when compared with other advanced nations.
• Parental background continues to exert a very powerful influence on the academic progress of children.

Sir Peter Lampl, Chairman of the Sutton Trust, commented:

"Shamefully, Britain remains stuck at the bottom of the international league tables when it comes to social mobility. It is appalling that young people's life chances are still so tied to the fortunes of their parents, and that this situation has not improved over the last three decades."

A little over three years later, Nasser Hanif of the BBC reported research conducted in 2005 by the London School of economics ("Why is Social Mobility Such a Problem?", BBC News, 22/1/11). This research demonstrated that social mobility had declined between 1958 and 1970. The researchers concluded that, "the people who moved forward during this period were from the middle classes ... If your parents were well educated and have a good income, it trickled down into the next generation."

It also suggested that children from poorer backgrounds did not benefit from any of the changes that were going on in society like the expansion of higher education in the 1980s.

More recent research reported by Simon Rogers in the Guardian (22/5/12) paints a similarly dismal picture. Seven years on from the LSE's report, figures from the OECD confirm that:-

• Britain has some of the lowest social mobility in the developed world - the OECD figures show our earnings in the UK are more likely to reflect our fathers' than any other country.
• Social mobility hasn't changed since the 1970s - and in some ways has got worse.
• 24% of vice-chancellors, 32% of MPs, 51% of top Medics, 54% of FTSE-100 chief execs, 54% of top journalists, 70% of High Court judges ...went to private school, though only 7% of the population do.

It would seem then that over fifty years after the Macmillan government, its Cabinet stuffed with the massed ranks of Old Etonians and landed gentry, Britain is still as class-bound as ever.

A press release from the Joseph Rowntree Foundation (26/5/12) quotes the current Minister of Education, Michael Gove:-

"More than almost any developed nation ours is a country in which your parentage dictates your progress. Those who are born poor are more likely to stay poor and those who inherit privilege are more likely to pass on privilege...For those of us who believe in social justice this stratification and segregation are morally indefensible."

Fine words, but will anything actually change?

Both David Cameron and Boris Johnson, bathing in the post-Olympic euphoria, were positively effusive about the importance of physical education in schools. Boris Johnson suggested that schools should provide 2 hours of physical education and competitive sport every day. This might well result in a very fit student cohort but I am at a loss to see how it might remedy Britain's relatively poor productivity and concomitantly mediocre economic performance. At best this is a disingenuous distraction from the serious business of restoring Britain's industrial fortunes.

Helen Barnard, poverty programme manager at the JRF, says: "With low skills and and low quality jobs, there is no progression, and with manufacturing gone, it is harder to progress from a low skill area."

If we were to take the clear evidence from Britain's recent Olympic performance, then the remedy is obvious - investment. If we can afford to spend 475,000 per head on Olympic athletes then should we not at least be prepared to invest a similar amount on ensuring that the British working population is trained to level which enables them to compete in the global economic stakes?

Figures taken from the BBC News website, (Education and Family, 12/1/11) reveal that secondary school expenditure tended to fall between 4,000 and 9,000, while primaries fall between 3,000 and 8,000 per capita per year. Data is not available for academies, which are outside local authority control. So it seems that we are prepared to spend around 120,000 per year to produce an Olympic competitor but well under 10,000 per year on someone who ultimately will be contributing, we hope, to the British economy.

In the aftermath of the riots last year, interviews were conducted with many of those who had rioted. What was clear was that there is ere is an inchoate anger among those who rioted, some of it directed against the police, not least one imagines since they are the most visible manifestation of the state, but also a general hopelessness and a feeling of being trapped in circumstances from which there is no realistic prospect of escape. It is all well and good Michael Gove's extolling the virtues of education to the young but if there is, at the end of it, no prospect of regular employment at levels of pay which make work viable, then it is all in vain. With the increasing use of 'zero-hours' contracts, I see no prospect whatsoever of improvement in the economic condition of those in Britain's most deprived areas.

The building of the Olympic Village has, no doubt, brought work to the East End of London, and it will provide some housing and other amenities, but for the great majority of those in such as Hackney and Tower Hamlets, the circus has left town, having had little beneficial impact on their lives, and the grey daily grind will resume.

Once again, the evidence is clear: if we are to achieve the levels of productivity and prosperity enjoyed by Germany then we must invest similarly. If we can invest over 100,000 per capita per year to gain what are, in the final analysis, just baubles, then why can we not invest similarly in productive capacity? It does seem that we have our priorities wrong.

Sources
BBC News website (bbc.co.uk), 7/8/12, Richard Anderson
Sutton Trust, 31/12/07, Dr. J Blanden and Prof. S. Machin
BBC News website (bbc.co.uk), 22/1/11, Nasser Hanif
Guardian, Datablog, 22/5/12, Simon Rogers
Joseph Rowntree Foundation, 28/5/12, Grahame Whitfield, "Are We Really Moving?"
Telegraph, 14/8/12, Graeme Paton
Guardian, Datablog, 13/8/12, Koos Couve
BBC, Radio 4, Thinking Allowed, "Jobs for the Boys", 4/6/12.

Chris Waller - Permission granted to freely distribute this a article for non-commercial purposes if attributed to Chris Waller, unedited and copied in full, including this notice.

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