Select Committee on Public Accounts Minutes of Evidence



Examination of Witnesses (180-199)

WEDNESDAY 14 FEBRUARY 2001

MS PAM ALEXANDER AND MR BRIAN GLICKSMAN

  180. Sorry?
  (Ms Alexander) We did not follow that approach. The note sets out one meeting at which it was suggested that all the costs should be covered by a donation from the former King of Greece. We concluded that that would put us at far too great a risk of having to carry the costs of the event ourselves and therefore the arrangement set out at that meeting was not followed—

  181. The original suggestion that the matter should be dealt with via a donation rather than a fixed, contracted fee (the profit element as well) was originally made by the Chairman to a friend of his and he ended up deciding the size of the donation and paying it. Is that acceptable?
  (Ms Alexander) It was made as a suggestion by the Chairman to the party organisers at the first meeting to discuss the basis. We concluded that that was not a suggestion that was acceptable and it was not accepted.

  182. But you did accept that the profit element should be by way of donation and that is what happened?
  (Ms Alexander) And I still think that is acceptable. We let our properties to a number of people on a cost-only basis. We let them to community groups, we let them to people whom we feel will bring us benefits in the local community and the wider community, and the basis on which we accepted this, and which I do consider acceptable, was that we would cover our costs and receive significant benefits, indirect and non-financial, and I do not think that that is out of line with what the vast majority of the venues which are hired for hospitality do. That is the nature of the business that we are in. I think a lot of museums, galleries and historic houses would have gone forward on exactly the same basis which was why we judged that was the basis we needed—

  Mr Rendel: I can only say that I am staggered you think that an accounting officer can behave properly in that way.

  Chairman: Mr Andrew Love?

Mr Love

  183. Can I just pursue clarification on this particular issue. This was an extremely unusual event, as I think has been admitted in the report. Would it have happened if it had not been for the personal intervention of the ex-Chairman of English Heritage? In your view would this have happened if it had not have been for his personal intervention?
  (Ms Alexander) I think it probably would because the reason the former King of Greece approached us is because he is a resident of Hampstead, has long had a connection with Kenwood, and I believe wanted to hold his daughter's wedding reception there.

  184. Can I then pursue the matter of terms. Would the terms that were agreed have been any different if it had not been for the personal involvement of the ex-Chairman?
  (Ms Alexander) That is very difficult to say. I think probably not because Lady Anson was very clear about the terms on which she wanted to negotiate. She did not wish for us to agree a contract that pushed the costs up as high as it did. We felt we had driven quite a hard bargain to get that contract.

  185. I wanted to draw out the distinction between the treatment of the terms of this particular contract that was entered into and what I would call Hollywood and the terms of the film Notting Hill. Can you tell me why there were two different contracts? You only got costs plus for this particular contract but in terms of Notting Hill you received 22,200 for an outlay that you considered to be around 4,000. Why such a big distinction?
  (Ms Alexander) Because it is a completely different market. The market for filming is wholly different, costs us very little to be in, and we are very pleased when anybody wishes to use any of our properties for filming.

  186. Let me draw out the argument the you were using earlier. Notting Hill has been seen by a significantly largely number of people than all the newspapers that have been quoted around in terms of the event and the press coverage that it has received. Indeed, I think it is the most successful British film of recent years, seen extensively in all of the countries that would wish to make use of the visitor attractions of Kenwood. Why was that not taken into account when deciding the cost that you would charge the Notting Hill producers?
  (Ms Alexander) We might well have done it for less, but that is what they offered us and we were delighted to accept it. We were very pleased with the publicity we got through Notting Hill and we were delighted they chose to film it there. That was what they offered us, and that was the market rate, I believe.

  187. Would you accept that the publicity received for Notting Hill was significantly in excess of the receipt for the other event and, therefore, is much more likely to be influential in any increase attendance there was at Kenwood.
  (Ms Alexander) The timing was different. I think you are right, there were very considerable benefits from Notting Hill, but, of course, for a very different audience. What we were looking at at the time the Greek wedding reception was put to us was the development of the new business, which I do not think will have been influenced at all by Notting Hill, it is a very different market.

  188. Can I ask you in terms of the publicity, we hear regularly of society events where various magazines, Hello, and others, pay very significant fees for access to such events. Are you aware of whether or not any contracts were entered into, in relation to this event, of that nature? Do you have any idea what the sums of money that might have been involved were and whether that in any way should have influenced you in the terms of the amount that you were charging the organisers of that event?
  (Ms Alexander) I think it is normal practice in the industry when venues are hired out that those owning the venues do not tend to get involved in the individual bride and groom's arrangements. We were not involved in the arrangements with Hello magazine. That is always, where we are involved, a matter for the people hiring the venue.

  189. Would you accept that it is likely that Hello would have paid a very substantial fee?
  (Ms Alexander) I do not know whether they paid a fee or not.

  190. Would you have thought it was sensible to assume that a very substantial fee was paid for this type of society event?
  (Ms Alexander) It may have been, I do not know.

  191. In those circumstances, if it is likely that a very substantial fee was paid, do you think it would have been somewhat difficult in refunding the costs to English Heritage, when it may well be that they made a profit on this event?
  (Ms Alexander) We have received our costs. I do not know that the two are related. I would have been very disappointed if we had not and we would have pursued the contract. The main purpose of having a contract with them was to make sure the costs which we agreed, which were gone through in great detail in terms of the attribution of individual staff to individual days, were paid. We took no involvement in any discussions with magazines such as Hello.

  192. The reason I ask that is that you mentioned there was a different attitude towards Notting Hill, presumably because that was considered to be a commercial venture compared to the event involving the ex-King and his family. If there was a significant fee received would that not have changed the attitude that you took towards that particular event?
  (Ms Alexander) The market that we were in was how much we were charging for our venue. There were other venues which could equally have been approached by the organiser, and probably were. We were operating on the basis of what charges we would be likely to be able to make which would ensure that the wedding reception came to Kenwood. We felt that we had driven as hard a bargain as we could in terms of what costs could be attributed to the wedding reception itself. The price we were charging was considerably higher than the organisers had thought when they started, that is clear from the paragraph of the first meeting you have seen. Originally 25,000 was put forward as the total cost of the event as a market price, which we thought would have been reasonable, that was before we realised that the set up and take down costs would be so long. As you know, the total costs were 29,000, with the additional donation bringing them up to 34,000 before VAT. That was considerably more than we understood the organisers wanted to pay in the first place and we felt we had driven a price which was correct by the market.

  Mr Love: Thank you.

Mr Davies

  193. Welcome. Can I assume from your answers so far that your approach to charging fees is a flexible, profit maximising approach, differing case by case, this is what you seem to be saying, as opposed to rules driven by business?
  (Ms Alexander) In the case of one-off events, which cannot be compared with anything in a normal framework, that has to be the case. We have always had a framework for hiring our properties to third parties. The creation of Heritage Hospitality in 1998 set charges for the houses as they were introduced. We now operate those charges. If an event is outside that framework then we have to look at it one way.

  194. From your responses, you were comfortable with this particular event we are focusing on, which is the Chairman basically letting his friend have an event for cost price, with a belated final payment on the basis that that in hindsight generated some useful advertising. On that basis, would you be happy to do that again, if the Chairman has a few other mates who might want a wedding, they might get good publicity and it would be all right to do that at cost price, with a belated final payment, etc?
  (Ms Alexander) I would have hoped it was clear from our memorandum that that was not the scenario at all. We took this to our Commission with a very clear recommendation, formally asking them whether we should go ahead with it, precisely to ensure that we were doing the right thing. By going ahead with the event, from which we felt the main benefits would be in terms of prestige and publicity, we would cover our costs. That was the basis on which we put it forward. If there was to be a substantial donation then that would be additional.

  195. Do you think you could have charged a higher price, irrespective of the advertising value?
  (Ms Alexander) If I thought we could have then we would have tried to.

  196. If a similar opportunity emerges, namely somebody comes along and says, "I will pay you cost for a wedding that may be interesting to the media", would you go ahead in the same way?
  (Ms Alexander) We would look at it very much in terms of all of the circumstances, what the benefits are that we thought we would get out of it and what the market would be likely to bear in terms of the price we could charge.

  197. The concern was raised by David Rendel and others, in hindsight would you have changed anything that you did with this particular event, or would you be happy to keep repeating this sort of scenario?
  (Ms Alexander) It is not the sort of scenario that is likely to happen very often because this really did get phenomenal media attention.

  198. How many important friends does the Chairman have that might want to get married—?
  (Ms Alexander) I do not think it was the fact that this was a friend of the Chairman, I think it was the fact that there were 150 members of royalty and other important guests who attracted substantial publicity, and it was the former King of Greece's wedding reception. That was what got the publicity. We knew that would be the case and that was the basis we felt it would be a prestigious occasion to host.

  199. Given the current value of 790,000 of media value, it seems to me if that is the case—maybe I am wrong - you seem to suggest the four per cent increase in turnover might have been slightly linked to this extra advertising. Given the success of this, apparently, is it not your view that you should push ahead and actively pursue more state weddings, whatever?
  (Ms Alexander) We pursue ways of attracting people to our properties and new business in a number of different ways. One of the decisions that we have taken is we would not want to have a large number of events like this at any of our houses because they would cause more disruption than we would feel would be appropriate in relation to our overall responsibilities. We do think that on occasion it is something that can be justified. The benefits came through in terms not only of increased visitors, and I hope a boost for our hospitality business, and I know increases in our income through concessions, but just in the overall profile that it gives to us as an organisation. We are facing cuts in our grant-in-aid, we are being encouraged all the time to generate income. It is important that we are seen as a commercial organisation in those terms, but that that is seen to be balanced with our conservation responsibility as well.

 


 
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