Birmingham has been selected to host the Commonwealth Games in 2022, the biggest sporting event to be awarded to an English city since the London Olympics in 2012. The West Midlands mayor, Andy Street, described the announcement as a “fantastic Christmas present” for the region but it will not come cheap with the projected overall cost of the Games running to £750m, with the government covering around £560m of that figure and the local council £190m.

Not everyone contributing is as delighted with the news. One leading economist suggested the cash-strapped Birmingham council would be better served spending its money on educational schemes and incremental improvements to the transport network while others bemoaned refuse collection services in the area after a three-month strike over the summer. “So Birmingham city council can’t even organise bins being emptied but they can organise a Commonwealth Games?” tweeted Leah Gwilt, a local woman.

Ian Ward, leader of the council and chairman of Birmingham 2022, said he could understand the scepticism in certain quarters but promised it would not impact day-to-day services for local people. “The overwhelming reaction across the community has been positive,” he said, “but of course there are a few who will wonder how we are going to pay for it and we’re exploring a number of different options.

“The Games will have huge economic benefits for the region. We expect it to create 22,000 more jobs over four years. It will also reset the profile and image of Birmingham. We are a modern, cosmopolitan city, the youngest in Europe and we’re very diverse and we want to show that off.”

In order to offset that cost Birmingham is expected to become the first city in the UK to introduce a hotel tax. It is understood that will entail visitors paying an additional £2 a night on their bills, a common practice in many European cities. “We are going to explore the idea of piloting a hotel-bed tax scheme,” said Ward. “In Italy this works very well and that money is ringfenced to protect their heritage assets and we would do the same thing for the Commonwealth Games.”

The benefits of hosting the Games from a publicity and tourism point of view are hard to argue with. It is the biggest multi-sport event in the world outside the Olympics, with more than 5,000 athletes from 70 nations competing in 18 different sports. A study by Price Waterhouse Cooper projected an increase of between 500,000 and one million visitors to Birmingham on each of the 11 days of the Games.

The prime minister, Theresa May, rushed to offer her congratulations to the bid team after the announcement was made at the Arena Academy school in the Perry Beeches area of the city on Thursday. Sir Lenny Henry, the chancellor of Birmingham City University, said he believed hosting the Games would “boost the profile of a city which should not just be recognised on a national scale, but deserves to be a name that resonates around the world.”

Birmingham began the bidding process in September 2016 with its sights set on hosting the 2026 edition but Durban, South Africa, which was originally chosen to host in 2022, was stripped of the event in March this year after failing to meet a series of financial deadlines. Birmingham and Liverpool swiftly declared interest in hosting and became engaged in a head-to-head battle with the government’s department of media, culture and sport select committee eventually throwing its money behind the Birmingham bid. But there was an unexpected bump in the road in September when the Commonwealth Games Federation (CWGF) deemed the bid “not fully compliant” and a deadline for other cities to apply was extended in an effort to attract a rival bidder.

No other city came forward and the CWGF president, Louise Martin, was effusive in her praise of the Birmingham bid on Thursday. “Once bitten, twice shy, as they say and I didn’t want to go through again what we had with Durban so we needed signatures on a number of things,” she said, “but Birmingham have worked very hard and absolutely earned the right to host these Games and I have no doubt it will be absolutely tremendous.”

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Martin said she had been impressed by the diversity of the city which has people originating from all 78 Commonwealth member federations. “I think the Commonwealth is becoming increasingly important with everything that’s going on politically at the moment,” she added.

The biggest of the proposed Commonwealth Games venues will be the existing Alexander Stadium in the Perry Bar area which will host the athletics and increase its capacity to 50,000 for the event. There will still be a flavour of London 2012 with the track cycling to be held at the Stratford velodrome, which was the home of the sport during the Olympics, to save on cost.

The legacies of the two most recent British cities to host the Commonwealth Games – Manchester in 2002 and Glasgow in 2014 – are mixed but in terms of infrastructure they are widely accepted to still have sporting benefits for the local community.

Some are unconvinced of the long term benefits of hosting such events. Richard Wellings, deputy research director at the Institute of Economic Affairs, said Birmingham bidding for the Games was a “hugely reckless decision” based on the legacy from other hosts. “Birmingham has debts larger than quite a few small African countries,” he added. “The other issue, of course, is that it’s very commonplace for the budget of these kind of events to massively overrun as we saw with London 2012, which was roughly three times the initial estimates.

“If you look at the economic history of these events in the vast majority of places they don’t produce substantial long-term economic benefits. With these big government projects there usually is a large vanity element. It boosts the status of local politicians when actually the better economic returns are from bog standard schemes like improving the road network and making incremental improvements like to the transport network and addressing education.”

Quick guide Birmingham 2022: the bid and venues Show Hide The bid Taglined “Heart of the UK, soul of the Commonwealth” – it was pushed as “a compelling and low‑risk” option, with 95% of the venues in place. Alexander Stadium will be upgraded to a 40,000‑seat venue, while the only new facility will be the Sandwell Aquatics Centre. There are plans, too, for a 1,000-home athletes’ village in Perry Barr north of the city, and an extensive cultural programme based around “Festival Squares” – Victoria Square, Centenary Square, Chamberlain Square and Brindleyplace

The venues Athletics: Alexander Stadium

Aquatics and diving: New Sandwell Aquatics Centre

Badminton: Genting Arena

Basketball: Victoria Square

Boxing: NEC Hall 1

Gymnastics: Barclaycard Arena

Hockey: University of Birmingham

Judo: NEC Hall 4

Lawn Bowls: Victoria Park, Royal Leamington Spa

Netball: Ericsson Indoor Arena, at the Ricoh Arena, Coventry

Rugby 7s: Villa Park

Squash: University of Birmingham

Table tennis: NEC Hall 5

Weightlifting and para powerlifting: Symphony Hall

Wrestling: NEC Hall 4 Photograph: Birmingham City Council/PA