Select Committee on Culture, Media and Sport Minutes of Evidence


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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