Select Committee on Culture, Media and Sport Minutes of Evidence

Examination of Witnesses (Questions 140 - 159)

MONDAY 13 MAY 2002


140.  I am sure you have heard Mr, now Lord, Healey's dictum, "If you are in a hole, stop digging." There has been a great deal of digging and there is undoubtedly a hole. The question is, whether the Government goes on digging or not. It is very interesting that in the Tropus report on page 18, paragraph 7.1, second paragraph, they talk about £140 million for a Cardiff-type scheme. The fact is, we have a Cardiff-type scheme, have we not, and it is known as the Millennium Stadium, and the Cup Final has been played there for the past two years and it has become de facto though not de jure the national stadium, and no doubt next year, lacking any other venue, the FA will play the Cup Final there again, so why build another one? We have got one, it is used, people go to it.

  (Mr James) If you are asking me—

141.  It is not fair, I know.

  (Mr James) I did not come at it from that direction, I came at it from the point that the country had scope and need for some settled major national stadium. The Welsh would regard Cardiff perhaps as their national stadium, what about the English? Do we not get one too?

142.  We paid for it. Our Committee went there and we saw it being built.

  (Mr James) Without being nationalistic on this, can the English not have one?

Derek Wyatt

143.  I am interested in the implications of the athletics-enabled part of this stadium. Having been to World Championships and Olympics, you have to have a warm-up track, unlike Atlanta, which has to be close, within walking distance, because you warm up and you have to be then physically ready, it is no good getting in a coach and driving three miles and cooling down to warm up again. So for the stadium to be athletics-enabled would mean there would be a warm-up track in land you do not own. I am confused as to how it can be athletics-enabled and satisfy the actual gravity of a Sport England Lottery grant, I wonder if you could help me on that.

  (Mr James) I think I would have to defer that question to Mr Cunnah because my perception of this stadium was that it was intended to be primarily football with some ability to convert within certain parameters to athletics, but it was primarily football, and that made sense with the fact it was the Football Association with which we were dealing.

144.  But there are only two events it can be athletics-enabled for, one is the World Championships, and initially that was the problem, and the other is the Olympics. So if we are not going to bother with those, there is no point making it enabled but that makes the £120 million repayable. Perhaps you could explain how you are going to do the warm-up track.

  (Mr Cunnah) One of the reviews we have undertaken since 19 December is the appropriateness of the stadium for athletics. It was an independent review led by Sport England and it has concluded the new platform actually is now more appropriate than the previous one—cheaper and quicker—so a good option. Beyond the stadium, of course, the surrounding facilities become the responsibility of UK Athletics or British Olympic Association (BOA) or Sport England, not the Football Association, however, as part of the review they did look at things like where you would have a warm-up site, conscious of course, as you have pointed out, there are only two tournaments for which perhaps you would use the national stadium and therefore they could be a long time in the future. However, in co-operation with Brent, I understand there are up to four sites which have been identified, as and when the World Championships or the Olympics are gained, which could be used.

145.  We looked at all those before. Anyway, thanks for that answer. The introduction on page 3 of 37 says, "The report has been prepared at the request of Sir Rodney Walker", what led him to ask for the report, given he has about 72 hats to wear at any one committee meeting?

  (Mr Cunnah) I think Sir Rodney's reaction to being told of these allegations by Tropus was very simply, "You need to put those in writing so we can address them", and indeed that is what happened.

146.  Forgive me, but why black out paragraph 1.2 then? I could go on and ask you why you have blacked out this and blacked out that. What is the point of saying, "If it is jointly, it must be UK Sport and somebody else"?

  (Mr Cunnah) We did request—and we do thank you for it—a closed hearing because there are elements of confidentiality, we believe, in the replies which relate to these reports, both commercial confidentiality and in respect of individuals who are named in the report.

147.  Can I ask Mr James next. The thrust of your letter points to the preference of re-tendering the contract for building a stadium at Wembley, but in fact that is not what you recommended. The thrust of your letter seems to suggest something else. So is the reason you came to that conclusion, is the same point you have made before, the risk?

  (Mr James) There was an earlier draft of the report which would have occurred during early November possibly, at which point we were recommending proposing very strongly they had to go for a re-tender. That was the only way out of the dilemma. They subsequently persuaded me this was not practicable, and I was given a great deal of information to understand why the timetable had to be met, and that effectively I should recognise the recommendation was, abort completely, or alternatively go forward within these parameters, but you cannot go for a re-tendering, we would simply not meet the timetable and we would lose the value of the ability to retain the extra land, which we heard of earlier, which was regarded as essential to the whole enterprise.

148.  You are saying there was a first draft. I see we have a third draft.

  (Mr James) Yes.

149.  The first draft was August/September?

  (Mr James) I believe it was November. The first draft would have been late October, very early November, and the second draft was in November.

150.  I have misunderstood something. You also said earlier you did not tell the Secretary of State of something by—

  (Mr James) I am sorry. You are talking about our report, the BLP report? You are not talking about the Tropus report?

151.  I am talking about the Tropus report.

  (Mr James) I am sorry, I am at cross-purposes with you. The report which we published came in some several different drafts, and in the earlier draft I had proposed re-tendering. That was removed from the final draft.

152.  Yes, and the Secretary of State was presented with this when?

  (Mr James) The Tropus report?

153.  Yes. Or both actually.

  (Mr James) I answered the Chairman earlier on by saying this was presented to the Secretary of State on Sunday 16 December but I have been hit with a barrage of notes from my legal friend on my right, saying she does not believe that is right. So I am going to ask, if we may, to verify that and come back to you separately.[20],[21]

154.  Of course. What about the other report.

  (Mr James) Definitely the James/Berwin Leighton Paisner report was presented to the Permanent Secretary on the night of Friday 14 December 2001 and was definitely seen by the Secretary of State during Sunday 16th.

Mr Doran

155.  You said earlier to the Chairman when you had investigated the allegations of impropriety and perhaps dishonesty that everything was clear and clean about the project. You did give a caveat to that but I accept what you are saying, but that still leaves me a little troubled, particularly when we look at the issue of this public money which is involved. Certainly the Tropus report seems to be fairly clear, it is at least clearly implied, that the contractors managed to exploit the muddle, perhaps even incompetence, of poor management to get themselves into a fairly favourable position. Was there no thought in your mind that that should be perhaps reflected in further discussions with the contractors to see what could be renegotiated to try and get WNSL into a better position?

  (Mr James) The only contact we had with the contractor was on our insistence over the weekend of 16 and 17 December, when it was clear that the Department of Culture was looking for us to close the report as a pre-condition for the Secretary of State to be able to make an announcement, hence we curtailed the remainder of the process and signed off the report on the 17th to that purpose. The only thing we did was that, before we could meet that extremely tight timetable, we insisted upon getting a letter from the contractor to the effect that they would confirm they were abiding by certain principles themselves and they had acted unambiguously and without any inference or reference to any other contractual negotiations.

156.  At that time no contract had been signed, and there are clear allegations that there was an awful lot of exploitation of the situation in a variety of ways but you did not feel it appropriate to make any recommendation in that respect?

  (Mr James) No. I think I have read in the press since—and I should add my own involvement on this ended on 9 January, I have had no direct involvement since—that the contractor has been threatening quite vociferously that he will raise the price if the work does not commence by a certain date. So I think the pressure has been coming from the other direction. There certainly was not time to even contemplate a re-negotiation.

157.  That still is on WNSL's head. On the question of the expenditure prior to your involvement, which you have been able to review, it is mentioned in the Tropus Report for example that on the hotel project, which we discussed earlier, round about £20 million was spent. We have £120 million coming from Government, £106 of that is spent on buying the land and presumably there are various other costs in terms of consultants, et cetera, plus this £20 million and plus presumably staged payments to the various contractors, so that is quite a lot of money which is being spent and certainly more than £120 million, so WNSL has accumulated a significant number of debts already.

  (Mr James) You would have to ask Mr Cunnah for that, I am afraid.

158.  How are these being funded? Is the FA funding it or are there other bank loans we do not know about?

  (Mr Cunnah) There are three sources of funding for WNSL to date. The business was acquired in March 1999 using the Lottery funds. Lottery funds fully financed that acquisition and also some of the design costs which have been incurred to date. Also we operated the stadium for about 20 months and therefore there were profits which were generated during that time which became a source of funding for the project. In addition to that, yes, the FA has been providing financing.

159.  Did you say there had been a bank loan at some stage?

  (Mr Cunnah) No, I did not.

20   Note by Mr David James: The Secretary of State had not seen the Tropus report as of the date of the evidence given, 13 May 2002. Back

21   Note by WNSL: see memorandum submitted to the Committee by WNSL on 20 May 2002 for clarification over the distribution of reports. The Tropus report itself was provided to the Secretary of State, with the consent of Tropus, on 20 May 2002. Back

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