I wrote last week how Hull City Council spends millions of pounds more than the East Riding on employer pension contributions. This has happened because of mismanagement in Hull over many years. At a time when the council is reining in spending, this is money that could have been spent on essential services, and proves once again why it is essential to reform public sector pensions.
In Sheffield, the council has a different problem, but one that still costs taxpayers there £30 million a year.
In 1991, the World Student Games were held in the city. In order to host such a major event, a massive building programme got under way, building venues such as the Sheffield Arena and the Don Valley Stadium. Twenty years on - and after refinancing - the initial cost of building works (£147 million) has risen to £650 million, with less than half (£296 million) having been paid off. The council currently spends £30 million a year to fulfill its financial obligations, and it is estimated this debt will not be paid off until 2024.
I visited the Don Valley Stadium last year. It is still used for athletics events, and is the home of the Sheffield Eagles rugby league team. The capacity of the stadium is 25,000. Sheffield Eagles' crowds are a fraction of this, and the crowds for athletics events are not much higher. This is what Mike Corden, chair of City of Sheffield Athletic Club, had to say.
“We have the best athletics facilities in the UK but, if you asked me as a taxpayer whether the amount spent was a good idea, the answer has to be no. The scale for Don Valley was beyond belief and the construction cost, around £30m, eye-watering.
At the time, Crystal Palace in London was the largest venue, holding 17,000 people but Don Valley was built to hold 25,000. You can’t get 5,000 or 6,000 people to an athletics event these days. It is reasonable to ask why such an amount of debt was taken on,”
Here we have another example of money spent on grandiose projects, which at the time leaders thought were a great idea. No doubt they thought it would put the city on the world map. Twenty years on, most people have forgotten about the World Student Games, and about the city of Sheffield, however the debts are still there.
We cannot turn back the clock, and this money will have to be repaid. It does though prove we should think long and hard before committing public money to projects without having a clear business plan. I shudder to think what the eventual bill will be for hosting the 2012 Olympic Games. The government says the facilities will last, and will be used by future generations. I hope so, but I'm not convinced.
One thing is for certain. People in Sheffield must be wondering if hosting a major sporting event was worthwhile. I think the majority will say it was not.