Examination of Witnesses (Questions 20-39)
LORD COE
AND MR
KEITH MILLS
18 OCTOBER 2005
Q20 Mr Evans: In the worst case scenario
you could make a loss. It could happen, could it not? You could
go into the red?
Lord Coe: I have to say that everything
we are doing at the moment tells me that that is unlikely.
Q21 Mr Evans: If it did happen, who
picks up the tab?
Lord Coe: First of all, I do make
this clear: I do not think that will happen. We have a number
of structures in place. We have structured this whole process
very carefully to avoid that. The issue is a very simple one:
the Government have signed the guarantees on this project. They
are effectively the lender, the guarantor, of last resort.
Q22 Mr Evans: So the Government will
pick up the tab and it will be spread to taxpayers?
Lord Coe: It is spread. There
are 400 guarantees throughout this whole process. The financial
guarantees are very strong and clear, but that is a broad guarantee,
and obviously there is government, local and regional as well.
Q23 Mr Evans: The best case scenario
is that you will make over £100 million. You have the 60:20:20
split. Did you or somebody else decide on that split?
Lord Coe: That would be done throughout
the stakeholders.
Mr Mills: The percentage is determined
by the IOC.
Lord Coe: I am sorry but I thought
the question was about how we distribute it.
Q24 Mr Evans: Who decided whether
it was 60:20:20?
Mr Mills: That is an IOC decision.
In fact, the formula is that 20% goes to the National Olympic
Committee, 20% goes back to the IOC, and the balance can be dealt
with as the organising committee and the stakeholders determine.
Lord Coe: That final distribution
clearly would be determined amongst our stakeholders and the agencies
delivering British sport.
Q25 Mr Evans: A number of sporting
bodies could be on the receiving end of many millions of pounds,
which we would hope—and I do not know if you have had assurances
from the Government—would be additional money and not be
taken out of any budget they currently give to sporting bodies.
Lord Coe: That would be additional,
but it is also for the distributing agencies to ensure. Whether
that is the split between grass roots and the elite is quite properly
the argument still to be had.
Q26 Paul Farrelly: Having set a positive
tone, I do not want to carry on with a negative tone. To be more
precise, when you say the Government is underwriting this and
will pick up the tab if there are any losses, is that central
government or is it the London council taxpayer as well?
Mr Mills: As Seb has mentioned,
there is a large number of guarantees based on individual obligations,
but over the entire project there is an overriding central government
guarantee given by the Chancellor and the Prime Minister that,
should there be shortfalls, the Government will be the lender
or the funder of last resort.
Q27 Paul Farrelly: Some miserable
friends of mine in Paris were very glad that London won the Olympics
because London would be picking it up on the council tax.
Mr Mills: They would say that,
would they not!
Q28 Paul Farrelly: If the council
taxpayer of London is making a contribution towards the Olympic
project, why, if you make a surplus, does not the London council
taxpayer see a big dividend and you would pay some of the surplus
back to them?
Mr Mills: On the basis that the
stakeholders can determine that, if that is what they so determine,
then that will be so. It is for the stakeholders to determine
how that surplus is distributed.
Lord Coe: The council tax commitment,
if in essence it is necessary, is £20 a year for 10 years,
capped at 10 years, and it is predicated on an average band D.
Q29 Mr Evans: They are going to pay
that anyway, are they?
Mr Mills: Yes.
Lord Coe: That is in the funding
formula.
Q30 Helen Southworth: You are responsible
for the cultural programme?
Lord Coe: Yes.
Q31 Helen Southworth: Are you excited
about this? What does it consist of?
Lord Coe: It is very important.
It is an increasingly important part of this whole process. It
has probably had more importance attached to it throughout this
bidding phase than before. Currently, we have a Chair of Culture
Education. The whole issue about celebration and the ability through
education and cultural programmes the length and breadth of this
country to develop an awareness and to bring communities together
off the back of an Olympic Games is very important. As for the
educational programme throughout this build-up we actually started
in a very structured way within the bid phase. We started with
a schools' assembly pack, which I think was downloaded by about
39% of secondary schools in the country. Before Singapore, we
developed a slightly more complex package, which became a resource
package that hacked into Key Stages I, II and III numeracy and
literacy, launched by the then Education Secretary at a north
London school six months ago. That has worked extremely well.
We intend certainly to develop that, both domestically and globally,
because part of the Singapore narrative was that this was not
simply about getting more young people into sport in the UK and
the clear benefits to the UK; we wanted to position London as
a city that was able to reach out and spread the Olympic movement
globally as well. That is an important concept. We have just advertised
for somebody who will deal specifically with the cultural programme
and all the things we are able to run off the back of this. That
will be central to what we are attempting to do.
Q32 Helen Southworth: You have already
touched on the role of volunteers. Can you give us a little bit
more information about that? You are looking for 70,000 and 60,000
have signed up already.
Lord Coe: The figure is roughly
70,000. The good story, even with the awfulness of the day afterwards,
is that within the first six or seven days 17,000 people had committed
to become volunteers. I think our last count was about 60,000.
We are very nearly there. That is not to say that everybody who
has applied will be suitable. It is not quite so simple. There
are training programmes and structures. If I put that into context,
Athens was still trying to re-energise a volunteer programme five
or six months before. I know that because I was recruited to go
over and see whether we could help in that way. We are pretty
much there on numbers. I want to make sure that there is a regional
split as well. It is very important that we recognise that if
this is a UK-wide project, our volunteers have to represent the
UK. It is very good that we have that many who have pledged names
and addresses already.
Q33 Helen Southworth: You have anticipated
my next question. I was going to ask how you are going to make
sure about that. We have a very strong culture of volunteering
and so in some ways it is not surprising that so many people have
participated already. How are you going to make sure that this
is open to people right the way across the country? Somebody who
is going to be 18 in 2012 is only going to be 11 now. How are
you going to make sure that young people are actually participating?
Lord Coe: We have done a number
of things already. For instance, in order to help our public awareness
campaign, we launched something called 2012 Day, which was on
20 December last year. Any child born on that day has been given
a guaranteed role in the opening and closing ceremonies—they
will be seven at that point—by using some of our structures
like Nations and Regions, some of the current structures we have
been using throughout the bid process, and stakeholders who have
a very good reach into all these communities. For instance, if
you look at Nations and Regions which we are effectively announcing
today, chaired by Charles Allen, that represents the nine regions—England,
Scotland, Wales and Northern Ireland. Obviously every region will
be asked to nominate a senior representative to serve on this
group. Each region has also offered an executive officer to help
with these programmes as well. We are well on the way to making
sure that that has a proper UK-wide representation.
Q34 Helen Southworth: I have been
very impressed by some of the work that has been done in higher
and further education establishments on events management and
making sure we develop skills to run these sorts of things so
that we make sure that when we have the Olympics, we win the bid
and do it successfully and also for all the other kinds of events.
What are you going to do about that?
Lord Coe: That is a very important
concept. One of the key issues of legacy for us is the use of
facilities and the promotion of self-sustaining communities after
this, particularly in East London. The Olympic Institute will
become a centre for all the sorts of things you have talked about,
not only medical and rehabilitation work with competitors but
allowing government bodies access to those types of facilities,
developing programmes on the Olympic ethos and event management.
We want all those skills effectively under one roof at the Olympic
Institute. For me, that is probably one of the most exciting aspects.
Q35 Helen Southworth: Are you going
to have apprenticeships?
Lord Coe: I am not sure at this
moment. It is a little early to give you tightly prescriptive
structures, but we do want transferable skills. The nature of
sustainability in these areas is a very important concept. An
Olympic Institute in East London is an important part of the regeneration
of that area, but one that has access to people from throughout
the UK.
Q36 Alan Keen: Mischievously I was
thinking that if all my constituents could choose who they shout
for, and they are British in the main but they may have been born
somewhere else, will they be allowed to shout for whichever nation
they want? Where does ticketing fit into the organisation that
you have already established?
Lord Coe: If I may say so, our
ability to make these Games as accessible as possible and as price-sensitive
as possible is very much part of your colleague's previous question.
I can write to the committee about how we intend to break it down
into percentages of the numbers of tickets at various price points.
That is very important. I hand over to the ticket expert himself
as this is one of the areas in which Keith has been involved for
much of his life. Our ability to be able to use state-of-the-art,
such as it is, ticketing and targeting ability throughout the
Games will be absolutely essential in making sure that people
have access at sensible prices to the Games.
Mr Mills: The skill in getting
our ticketing strategy right is to get that fine balance between
raising the revenue that is necessary to fund the Games on the
one hand and ensuring that we have full stadiums across the country
on the other. I think we have put together a plan that achieves
those objectives. It is a delicate balance. There are some very
interesting technologies emerging that can achieve that for us.
For instance—and this happened in Athens—where events
are effectively covered by one ticket, a whole bunch of spectators
turn up for the first hockey match to support their team, buy
the tickets, and, as soon as their team has competed, they leave
and the stadium empties; you have a half-empty stadium for the
second game. The new ticketing technologies may well enable us
to deal with those sorts of issues and make sure that for every
competition there is a full stadium. There are some interesting
technological solutions coming through. I think the balance between
maximising the revenue, which we have an obligation to do to fund
the Games, and ensuring that every stadium is full, is the objective.
We have some pretty robust strategies in place to deliver that.
Q37 Alan Keen: Obviously the policy
you are explaining is right at the top of the organisation.
Mr Mills: It is a function of
LOCOG. This is within the organising committee
Q38 Alan Keen: There are going to
be many people watching around the world. We do not want them
watching anything where the stadium is not completely full, if
possible. Will that flexibility be taken right through to when
the Games are taking place, that those likely spaces can be filled
quickly by volunteers or free tickets to schools and that sort
of thing? Presumably that has been taken into account?
Mr Mills: That is where you do
need technology. What you have to stop is the abuse of ticketing.
For those of you who have tried to buy a theatre ticket in London
or a ticket to a soccer match, you will know that there is a very
active and thriving black market for tickets in every country
in the world. Within the constraints of ensuring that there is
fair play, with the use of technology (and techniques such as
they use at Wimbledon incidentally where somebody leaving Wimbledon
deposits their ticket on the way out for somebody to use on the
way in) those sorts of things are difficult to do with the current
physical ticketing systems they have used in past Games, but there
are some interesting electronic solutions coming through at which
we will be looking.
Lord Coe: This is the ability
to allow people to see ticket availability, particularly on the
day, and actually target those people that you know want a place
in the stadium at the beginning of the day. When something becomes
available, you are able to communicate with them.
Mr Mills: One of the really exciting
things about the Olympic Games in terms of sport in this country
is that people will go and see a sport that they would never ever
have seen before. When I went to the Games in Athens I saw a sport
that I had never seen before. There are some fantastically exciting
sports out there; for instance, handball was one that I watched
that was just riveting and yet it is never seen in this country.
Football will always be full and perhaps some of the other major
sports.
Lord Coe: What about track and
field?
Mr Mills: Occasionally people
go to see track and field these days as well. There are some great
sports that the Games brings to a country which are not traditional
sports in that country. That gives particularly young people the
opportunity to experience sport they would not have otherwise
seen.
Q39 Alan Keen: Is it possible to
explain the technique for deciding on prices? Seven years is a
long time. You are obviously working on engaging inflation. When
will you finally decide on the price of tickets? When will they
start to be sold?
Mr Mills: They will not start
to be sold until two years out and we will probably start firming
up our ticking pricing three years out. There is a way to go yet.
We will also take on the experience from Beijing, which will be
a very different marketplace. We will try to take the most recent
data before we start fixing the final prices, the final allocations
of tickets. We are some way from that yet.
Lord Coe: If I may say, there
is also the ability to watch these events on large screens and
the use of our parks in London and throughout the UK. We recognise
that not everybody is going to be able to get into the stadium
as and when they choose but their ability to watch on good definition
screens which are accessible is part of that structure as well.
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