Select Committee on Culture, Media and Sport Minutes of Evidence

Examination of Witnesses (Questions 500 - 519)



Mr Fraser

  500. I shall just put one more point to you, and others can come in on this. If the £20 million from Wembley Stadium is dependent upon Wembley reaching its funding agreement in the way we have discussed, and the athletics stadium is short of its budget, can you tell us about the contingency plans that you have got for funding the athletics stadium at Picketts Lock so that it can actually reach its proper funding in time for the 2005 championships?  (Mr Smith) Of course, that question, Mr Fraser, is predicated on the assumption that Wembley does not reach its financial necessities. If that were to happen we would have a substantial number of problems on our plate, of which Picketts Lock might be one, but Wembley itself would be another. I am, as I indicated earlier on, absolutely confident that we will be able to ensure a good, world class athletics facility at Picketts Lock. That remains my belief.

  501. If I may, just on that point, go back to the problem we had with the Millennium Dome, we went through this time and time again with the Millennium Dome about the contingency plans. Each time we asked the question it came back "We are on schedule, everything is all right, contingency plans are not required", and look what happened. Okay, it did open on time but there were an awful lot of open-ended questions about sponsorship and other issues. I put it to you that your department fell short of its responsibility for ensuring that proper contingency plans were in place, and from what you are telling me this morning, in effect, there is no contingency plan now.  (Mr Smith) Firstly, I disagree with your analysis of the Dome. Indeed, that does not accord with the reports which were put together by this Committee. Secondly, in relation to Picketts Lock, we are working very closely with all the parties involved in Picketts Lock to ensure that the necessary funding is put in place. Obviously, for something that is going to be for a world championship in 2005, it would be strange if we were to assume that every single penny was already secured and in our pocket in order to deliver it. However, the commitments are there, there is a relatively small funding gap in prospect, there are quite a number of discussions under way to secure that funding gap and I have no reason to believe that this is not on track.

  502. How big is that funding gap?  (Mr Smith) As I indicated in earlier evidence, which you may not have been listening to, Mr Fraser—

  503. I was, I just want you to remind me.  (Mr Smith) The commitment in their budget from Sport England is £60 million, the high-class performance centre is £7 million and the Lee Valley Regional Authority is £5 million. The requirement for the stadium from the latest figures that we have from the quantity surveyors is between £83 and £87 million, so the gap is round about £15 million at worst.

  504. Comfortable.  (Mr Smith) That is, in my view, eminently meet-able.

Mr Faber

  505. In Mr Fearn's initial question I think it may have slipped your mind that one of his questions was what assurances you have given to Mr Moorcroft and UK Athletics in respect of the funding of Picketts Lock. He clearly feels he has been given cast-iron assurances. What actually have you assured him?  (Mr Smith) I have assured Dave Moorcroft, as indeed everyone involved in Picketts Lock, that Government will be doing everything it possibly and legitimately can to ensure that this is going to be a success.

  506. What is that?  (Mr Smith) That is the commitment of approach and intention that we have given, and we stand very strongly by that.

  507. What does that represent in a tangible way? What tangible support is there? It is all very well to give Mr Moorcroft nice words, but—  (Mr Smith) As I have already indicated, the vast majority of the necessary funding for the creation of an excellent stadium is already earmarked. The on-going revenue costs of the facility after the World Athletics Championships is also coming fully into place and we are working very closely with all the other relevant authorities to ensure that the Games can be a success. That is the commitment that we have given, and that is, I would suggest, the sort of commitment which any sensible government would, at this stage, be giving.

  508. Mr Moorcroft said to us "We are involved in discussions with the commercial sector, obviously through the Secretary of State, sums of other public funding." What does he mean by that?  (Mr Smith) That, of course, refers to both the commitment from the Lee Valley Authority and, also, the possibility of further regeneration potential through the LDA and the Greater London Authority. There are a lot of discussions of this kind going on at the moment and there are a lot of possible routes to make progress. It is our intention that we should make progress on all of them.

  509. Mr Fearn also asked him, as he asked you earlier, who will underwrite the Games and bear any financial losses, and in that he included building the stadium, to which Mr Moorcroft replied: "It is far more appropriate that either the Secretary of State or the Minister answers this question because the assurances we have are from them ...". Again, what actual assurances have you given him that you will underwrite any losses?  (Mr Smith) As I have indicated to the Committee already earlier this morning, and as I have indicated to Dave Moorcroft, we understand absolutely the difficulties that the Mayor of London has. It would be the normal expectation in most cases of this kind—as, indeed, in the Manchester Commonwealth Games and, indeed, the Birmingham 2003 Indoor Athletics Championships—that it is the city that undertakes that formal underwriting process.

  510. I am sorry, Secretary of State. Mr Moorcroft is saying that it is you that has given him the assurance, not the city. He is quite categoric about it.  (Mr Smith) I am sorry, Mr Faber. If you are not interested in an intelligent reply to your question then, I am sorry, but if I can continue. The normal circumstance in these cases is that the city authority would be expected to perform that formal underwriting process. Now, because of the particular nature of local government structures in London, that is difficult in the case of a championship in London. That is why we are now looking at what alternative arrangements can be put in place. This is not something that is an immediate issue. It has to be resolved within the next few months and work is under way to do so.

  511. Minister, there is one option for you to sign the contract.  (Kate Hoey) Ultimately, I think, if we are being honest, if we want this world championship to be successful and we want the whole thing to succeed—which I hope everyone, whatever their differences in the past about Wembley, will now want to make sure we deliver a really good World Athletics Championships—it will either be UK Sport or the Government, or UK Sport via the Government—

  512. UK Sport has told us quite categorically they did not—  (Kate Hoey) They would not do it without knowing that they were going to be able to rely on us as Government to—I hate to use the word "bail" them out because I do not think it would come to that, but they obviously could only do it if we agreed it.

  513. So you are saying that if UK Sport were required to underwrite and sign the agreement, that would be with an implicit—  (Kate Hoey) I am not saying that, David. I am saying that somebody is going to have to sign this agreement. We are caught in a situation at the moment where we need to sign it and we will make sure, in our discussions with the IAAF next week, that the detail of when that will happen and who will be worked out. I know it is an important issue and you all seem to think it is an important issue, but in the broad scale of things I have to say it is a technicality.

  514. Perhaps we can move on, Secretary of State, to the money which is in your opinion the agreed £60 million, and we all know how the £60 million from Sport England is made up. Why did you tell this Committee again and again on 6 February that Sport England had made an in principle allocation of this money when that is not the case?  (Mr Smith) Because, Mr Faber, that is what has happened. I would refer you to the Lottery Panel minutes of Sport England of 24 October and I would refer you to the council minutes of Sport England of 6 November.

  515. Miss Simmonds of Sport England, who sits on that council, told us quite categorically that no in principle allocation had been made.  (Mr Smith) The allocation has been made in their budget. That is very clear from the minutes, both of the Lottery Panel and of the council.

  516. Secretary of State, she explained to us in great detail the difference between an allocation in their budget and an in principle agreement to fund. She explained to us in considerable detail that an allocation to fund is the first step towards the funding of a Lottery project and an in principle agreement is a more formal type of agreement to fund the project prior to the money actually being handed over. She said that you might have a misunderstanding of the words "in principle", but that "in principle" does represent something, which is not what you are saying.  (Mr Smith) That is why, when I spoke with the Committee earlier, I spoke about an in principle allocation, which is indeed what Sport England have put in place, and not about an agreement to fund. An agreement to fund can only come once they are completely satisfied with the detail.

  517. Why would Sport England's Chairman, Chief Executive and Brigid Simmonds sit in front of us and tell us that is not the case?  (Mr Smith) With respect, I think what they have told you is exactly what I have told you.

  518. No it is not, it is completely different to what you have told us. Either you have misled this Committee in saying that an in principle agreement has been reached when it has not by Sport England, or you, as Secretary of State, are not aware of how one of your Lottery funding boards works. Tony Banks, when he sat before us a couple of weeks ago, understood perfectly; he said he had always in his time as a Minister understood the difference between an allocation to fund and an in principle agreement.  (Mr Smith) As I repeat, that is why when I have spoken with the Committee I have talked about an in principle allocation, because that is what Sport England have made, and the minutes of both the Lottery Panel and of the council meeting confirm that.

  519. So you are saying that when Mr Brooking, Mr Casey and Miss Simmonds appeared before us they misled or, even more seriously, lied to this Committee by telling us that—  (Mr Smith) I am not saying anything of the kind, Mr Faber. I do not think that your line of questioning is accurately reflecting either what they have said or what I have said, or the intention of both of us.

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2001
Prepared 3 April 2001