BPCE warns of the consequences of additional costs due to inflation on sports spending by local authorities

It is a shock that risks leaving traces. Inflation, driven in particular by soaring energy prices, generates additional costs such that the sports policies of local authorities could suffer, warns the banking group BPCE in a study on the sports sector, published Thursday, January 26.

More than a risk “the degradation of public service in sport” already constitutes ” a reality “underline the economists of the mutual banking group, who highlight in particular the closures of swimming pools which several municipalities carried out in 2022.

“This degradation could worsen in a more silent way and settle, in the medium term”, they add, especially since, for local authorities, the new charges caused by inflation come on top of “more structural financial constraints (gradual loss of budgetary autonomy, unpopularity of local tax increases, rise in social and age-related spending)”.

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Supplement of 840 million euros for the energy bill

The additional cost caused by inflation on spending on community sport is far from trivial: BPCE experts estimate it at 1.5 billion euros in 2022, or around 12% of this sporting spending.

The energy bill alone represents an additional 840 million euros. Knowing that the evolution of construction costs also weighs on investments (+ 300 million euros), underlines the BPCE study, which also quantifies the impact of the increase in the index point in the civil service ( in July 2022 in response to inflation) on the payroll to + 130 million.

It is above all the municipalities and the intermunicipalities, owners of 77% of the sports infrastructures, which bear the full brunt of these additional costs: 1 billion euros for the former and 400 million for the latter in 2022, i.e. increases in expenditure of respectively 13% and 14%.

Renunciation of investments

For BPCE economists, the additional inflationary cost that local authorities must bear represents “risks for the public service of sport”. It could lead local elected officials to give up “in whole or in part to investment projects in sports equipment”, even though the need has never been greater to renovate an aging and energy-intensive park, or to create new equipment.

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The authors of the study also anticipate a drop in sports support expenditure by local authorities in response to this additional cost of inflation: “some may be forced to reduce their operating expenses”, whether it is access to equipment (closures), grants to associations, or the organization of sporting events.

And for local authorities that will maintain their investment spending despite everything, this will mean “probably an increase in indebtedness”, advances the BPCE study, while noting that this additional borrowing risks limiting future investments, “ especially in communities that are already heavily indebted”.

In the end, BPCE economists, while believing that sport “remains a top political priority for local elected officials”consider that the shock caused by inflation, by its magnitude, “should significantly and lastingly affect the quality of the offer dedicated to sport”. Not necessarily good news at a time when the public authorities, thanks to the Olympic and Paralympic Games, have decided to make the development of sports practice a national emergency.

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Philippe LeCoeur