Examination of Witnesses(Questions 180-183)|
WEDNESDAY 22 MAY 2002
180. Can I turn to the range of sensitivity
tests on page 43, appendix 8. Why were the estimates of the People's
Lottery of how much they would give to good causes so much less
than Camelot's in most of these categories? They were supposed
to be a not-for-profit company. We have heard already that Camelot
were expecting to make substantial profits, so what was different
about the People's Lottery bid? Was it the start-up costs of getting
the equipment to get the thing going? Why were they over the bid
by so much?
(Mr Harris) The key determinant in this part of the
bid was the evaluation to which initially the Commission's consultants
and members of staff came and then the Commission's judgments
on that. The key determinant was on the levels of sales that they
thought each bid was capable of achieving. The Commission and
its advisers looked at the People's Lottery bid and in the People's
Lottery bid there were a lot of assumptions about the extent to
which the new matrix, the new game and a not-for-profit bid could
produce a huge rise in play and also then assumptions that that
huge rise in play would be maintained across the life of the licence
and that people would not, as has been experienced in the first
licence, start to drop out and say, "Okay, I am not winning,
so I will not play." The bid was adjusted for those assumptions,
and a range of other things as well, to levels that were considered
more realistic. That feeds through in appendix 8 to a whole range
of sensitivities that were tested to say, "Okay, that has
been reduced, if you push this element back up, what effect does
it have?" to get a sense of the effect of different adjustments
that have been made.
181. Finally, Chairman, a totally different
subject, during the period of the first licence how many times
did the on-line system fail?
(Mr Harris) I do not have that piece of information
to hand but I can certainly check the records and provide you
with that information.
182. That would be useful. It seemed to be headline
news when it did. There was one Saturday when the volume of transactions
(Mr Harris) There is a high performance standard that
the system is available for 99.95% of time and that performance
standard is met but there have been points and I can provide you
with that. 3
Mr Jones: 99.95 sounds not bad for an
183. Thank you very much. On what terms did
Hilary Blume resign? Was she subject to a gagging clause or were
there normal standard terms of her resignation?
(Mr Harris) Hilary Blume resigned. She made her own
statement, there is no gagging clause, she has expressed her views
on radio since.
Chairman: Thank you very much for coming
to see us. Anything that involves the raising and spending by
the public of £32 billion is extremely important. We remain
concerned about the vigour of the competitive process; we remain
concerned about the slow progress towards access by the Comptroller
and Auditor General; and we remain concerned about the probability
of a true, vigorous market-place coming into play at the next
round, and no doubt our Report will reflect this. To coin a phrase,
sometimes the market is not enough. Thank you very much.