Examination of Witness (Questions 1 - 19)
THURSDAY 16 JULY 1998
SIR RICHARD
EYRE
Chairman
1. Sir Richard, I would very much like to
welcome you here to the sitting of the Committee today. When we
issued our report on the Royal Opera House last December we said
in it that we would invite you to come and see us when you had
concluded your report of the working party which was announced
during the course of our inquiry. We very much appreciate that
you made yourself available so soon after publication of your
report. We have all naturally read your report which is very comprehensive.
If you have any other additional brief opening statement which
you would like to make before we put questions to you, we would
be delighted to hear it.
(Sir Richard Eyre)
No, I stand by what I say in the report. My only qualification
would be that it is important, I think, to read the report in
its entirety. You will not be a stranger to the vanity of those
who have written reports and the desire for every word to be considered,
but the arguments I make—in particular the arguments for
funding—cannot be taken out of the context of the entire
argument.
Chairman: Thank you very much indeed,
Sir Richard. Mr Wyatt.
Mr Wyatt
2. Sir Richard, it seems to me, reading the
complete report, that basically you have said that the management
leaves much to be desired—which is what we said—but
nevertheless that they should go on getting their money. Why would
we want to trust the current management much of which is still
the old management, and give them yet more money?
(Sir Richard Eyre) The question of whether the old
management is replaced by a new management is, of course, up to
the DCMS, the Arts Council and the Board of the Opera House. I
was not being asked to recommend more than how to rectify the
problems of the Opera House. My recommendation for the Opera House
receiving money was based on the principles of the remit of the
review. I was asked to examine two questions. The two questions
were how do you guarantee excellence in the art forms of opera
and ballet and how do you preserve the integrity of the existing
companies? What I say in the report is that if you want opera
and ballet of a certain sort, to a certain standard, then there
is a price attached to it. I say that price is difficult to quantify
exactly, precisely because of the current flaws in management
of the Opera House, and in particular their financial analyses
or lack of financial analyses. But given that these things can
be quantified or could be quantified, I certainly say that it
will cost more money to move into the restored, redeveloped, new
Opera House. I cannot put a figure to that, nor can the existing
management of the Royal Opera House, but I do not say that this
should be done indiscriminately. I say that there is a considerable
quid pro quo for more money, but the choice is, do you
want that sort of opera, do you want that sort of ballet?
Chairman
3. Could I just ask a question of clarification
here, Sir Richard. In responding to Mr Wyatt you talked about
the Board. In your report you say that "The Board has had
tremendous success in fund raising for the Royal Opera House,
but in other areas of its responsibility, particularly in exercising
any proper control over management, it has failed". Are you
there referring to the Board that resigned immediately after our
report was issued, or are you referring to the Board as now reconstituted?
(Sir Richard Eyre) I was referring to the Board that
you, in my view rightly, indicted in your report, and of course
there is a great deal of overlap between your report and my report.
It is too early to make a judgement on the conduct of the current
Board, except to say that we have little public evidence of improvement
and we have some signs of business as usual, given (a) the leaked
letter which was a demand for extra funds without accompanying
detailed costings and a business plan, and (b) the press statement
from the Acting Chief Executive of the Royal Opera House, who
suggested that education was a marginal activity and a luxury
which the Royal Opera House could not afford.
Mr Wyatt
4. So we made this decision, which we cannot
revoke, about giving it £70-odd million, but we cannot find,
and we cannot find in your report, what the financial plans are
which relate to that. What confidence do you have that there is
an ability to manage a proper international opera house?
(Sir Richard Eyre) As I say in my report, I point
out serious existing, endemic problems in the management of the
Royal Opera House. It is not beyond the capability of man to sort
these out. The problem of whether they do it with the existing
management or replace the existing management is simply not my
responsibility. It is for those who administer and distribute
the funds and for those in the DCMS to make a judgement about
that, but essentially it is the responsibility of the Board of
Trustees of the Royal Opera House to make the decision about the
management. If I make the decision about the management, I am
subverting the power of the Board. It may beg the question of
whether the Board is the appropriate body.
5. Under the current arm's-length principles,
the Arts Council was responsible for this award, was it not?
(Sir Richard Eyre) Yes.
6. What level of competency is there in the
Arts Council, since they never asked for a three-year or five-year
plan after the opening, and we still see no sign of it?
(Sir Richard Eyre) I think you make that point in
your own report on the Royal Opera House, that the decision to
grant—You are talking about the Lottery award of £78.5
million?
7. Yes, I am.
(Sir Richard Eyre) It was, to say the least, opaque,
the conditions were not clear, and it is an area which could take
some further examination.
8. With respect to the ballet, is it right that
in the new Opera House you will never be able to have a full house
for a ballet, because you cannot actually see the ballet from
some of the seats?
(Sir Richard Eyre) The Royal Opera House is not an
ideal house for ballet, in the sense that there are certain seats
around both sides—it is the same for opera—where part
of the stage is obscured. This is not going to be remedied in
the new Opera House which preserves the auditorium.
9. Our information is that in maybe as much
as a quarter of the seats you will not be able to see ballet.
Is that a fair comment?
(Sir Richard Eyre) I think that is an exaggeration.
By definition, any theatre which has a horseshoe-shaped auditorium
has less than perfect sight lines.
10. Do you feel that the ballet have any justice
in feeling second-class citizens because they do not get a modern,
21st-Century centre in which to play?
(Sir Richard Eyre) I think that dance—not exclusively
classical ballet—have a case for feeling that they have
been treated as the Cinderella of the arts. However, it must be
pointed out, and I think I do point out in my report, that the
redevelopment of the Royal Opera House was driven principally
by the Royal Ballet and the desire to create a permanent home
for the Royal Ballet. Therefore, as I say in the report, it is
actually impossible to unpick this history, since the building
is purpose-designed to house the Royal Ballet and to give them
a home and rehearsal rooms. You probably know that currently they
live in Baron's Court, so they travel from Baron's Court to where
they rehearse and have their offices and they travel to Covent
Garden to perform. So one of the principal premises of the redevelopment
of the whole Royal Opera House site was to give a permanent home
to the Royal Ballet.
11. One thing which we struggle with is the
education budget of the Opera House. The last recent activities
of what has happened there stick in our craw really. If we are
to get opera to be understood, then the budget cannot be something
discrete and hidden away; it has to be substantial. It was less
than 1 per cent. It seems to us as though they do not really care
and have not got the message.
(Sir Richard Eyre) I think I say that in my report.
I certainly said that in response when I was asked what I felt
about the statement from the Acting Chief Executive of the Royal
Opera House. Unless they are prepared to put education at the
heart of their activities, to allocate a ring-fenced budget to
the educational activities and to give the management of the education
department a voice in the senior management in order to be part
of controlling the destiny of that organisation, then I think
they deserve not only to be indicted, but actually I think they
deserve to have their grant withdrawn.
12. If the Government decides not to increase
the grant, is there strictly a financial future for the Royal
Opera House?
(Sir Richard Eyre) Yes, there is a future. I suggest
that there are options available. They can do shorter seasons
of opera, they could do shorter seasons of ballet and they could
then rent out the House. It is perfectly possible to devise a
number of fates for that building. What I was trying to answer,
as I said before, were specific questions about how to maintain
excellence and how to maintain the existing companies. However,
I do suggest towards the end of the report that there are alternatives
if the money does not go round, and I make the point that the
fatal error which the Board have made in the past is to commit
themselves to a deficit budget and not to say, "We have a
finite amount of money. What can we present with a finite amount
of money?"
Chairman
13. Sir Richard, a number of, to me, fundamental
questions arise out of the questions which Mr Wyatt has put and
the responses which you have made. If I may, I should like to
follow those up, beginning with the very last point you made.
In the last paragraph of your report you call for a substantial
increase in funding. To me, provided the criteria were fulfilled,
I would support that, but one then has to look at the criteria.
You have just mentioned education. In your report you say that
the Royal Opera House needs to integrate education work into the
mainstream of its activities, and you refer to what you have just
said, namely that "it needs its own ring-fenced programme
budget, and must be represented in its own right at a senior level
within the management structure of the Royal Opera House".
We have this event which was reported at the beginning of this
month, in which Janet Robertson was appointed. She was sent home
the day she reported. She said that Mr Pelham Allen, the chief
executive, told her that education was nothing more than lip service.
When Mr Allen himself was questioned about this he confirmed that
and said, "There is a risk that we end up playing with words.
I am conscious that there is a political correctness in some organisations".
If the newly-appointed chief executive says this, after what you
refer to as "incompetence, recklessness, arrogance, presumption
and disaster"—vocabulary on the whole more generally
associated with myself than you, Sir Richard; when all of this
has happened and they say this, surely there is a question about
whether they have learned any lessons from what has been happening
over the last few months?
(Sir Richard Eyre) I would certainly infer that conclusion
myself.
14. Secondly, on the various financial matters
which you discussed with Mr Wyatt, let us deal first of all with
the question Mr Wyatt raised of the arm's-length principle. You
say, in my view rightly, that the arm's-length principle is essential,
and that the Royal Opera House ought not to continue to seek,
through either the front door or the back door, to have a direct
relationship with the Department, but that it is with its funder,
the Arts Council, with whom it ought to have this relationship.
Yet we have the letter from Sir Colin Southgate in which, while
writing to the Chairman of the Arts Council, he also went over
the head of the Arts Council and wrote to the Secretary of State,
leaking the letter at the same time, asking for the doubling of
the state funding, and the Secretary of State took the trouble
to reply to him at great length, in my view over-generously, taking
into account the fact that that is not the relationship. Taking
into account that we have a new Chairman, appointed again after
all those epithets, and he is doing this all over again, would
you regard that as an appropriate way for the Royal Opera House
to prove that it has turned over a new leaf and that it is going
to accept its place as one of the most substantially funded of
all publicly-funded organisations, nevertheless it feels that
it is somehow special and different and must have this line of
access to the Secretary of State?
(Sir Richard Eyre) If I can make a marginal case to
excuse Colin Southgate, his letter appeared several days before
my report was published, so perhaps it is unreasonable to indict
him for having failed to learn the lessons from my report. However,
if it is true that that attitude still sustains after my report,
I would simply reassert what I say about the necessity of the
Royal Opera House regarding themselves as simply part of a constellation
of arts organisations who all have obligations to their audiences
and to their funding bodies. I think the consistent attempts of
the Royal Opera House in the past to subvert the arm's-length
principle and to diminish the power of the Arts Council officers
by going either straight to the Minister or straight to Downing
Street are deeply depressing, and certainly from the perspective
of other arts organisations I can say they are deeply demoralising.
I do believe that unless the Royal Opera House regard themselves
as not sui generis but simply an organisation which exists
for the public good to present specific art forms in a way which
is publicly accountable, if they cannot change the mind-set, then,
as I say in the report, there is no justification for them to
continue to receive public funding.
15. You use the adjective "depressing".
Of all the things in the report, the sentence which I find the
most depressing is the one in the first paragraph of the chapter
on "Finance & ensuring future financial stability",
where you say: "However, the lack of a business plan for
the Royal Opera House post re-opening, covering the costs of operating
in the new House, and in the studio theatre, has strictly limited
my ability to assess the Royal Opera House's financial position".
You had a most distinguished working party with financial experts
on it. Do you not regard it as deplorable that seven months after
we issued our report, the way in which the Royal Opera House arranges,
presents and controls its finance should be such that you, with
all the work you have done, had to write a sentence like that?
(Sir Richard Eyre) Yes.
16. Sir Richard, how can they conceivably justify
the large increase in funding which in certain circumstances you
advocate, and which in certain circumstances I support, if, under
the new regime, they continue to conduct themselves like this;
when, as you point out several times, they presented no business
plan for the re-opening and they have no budget for the studio
theatre which they have decided to open—and I am not against
that—which you say in your report is inherently incapable
of making a profit because of its seating arrangements, and yet
they do that? Could I add this. You refer in your report to a
deficit of £5 million, but we do not have any information
about that, do we? One member of the Board to whom I spoke informally
a couple of weeks ago told me that the deficit was actually up
since the publication of your report. In the work which you have
done, have you seen any evidence whatever that they are taking
control of the deficit—because you mention the need to take
a grip on it in the way that the English National Opera has—or
any evidence whatever that in the seven months since our report
they have taken a grip on the deficit, or any evidence at all
that they have taken a grip on the closure programme? In your
report you again deplore, in my view rightly, their failure to
work out a closure programme.
(Sir Richard Eyre) I think that if there were to be
any substance to the claim for doubling the grant, then it would
have to have been accompanied by a detailed, costed business plan.
I think we can infer from the absence of detailed costings that
there is still no detailed, costed business plan, and that has
to be regarded as a seriously deplorable state of affairs.
17. In your report, when you are dealing with
administration, you talk about the Royal Opera House "paying
significantly higher salaries in some key areas than those at
ENO. This may well be indicative of a culture that expects exceptionally
high rates of pay for all senior staff, simply because it is the
Royal Opera House". We have been sent a copy of the Annual
Report of the Covent Garden Community Association, in which they
contend that Mary Allen, who was there for seven months, received
a redundancy pay offer of £ million, in addition to which
there was a newspaper report that before the closure 33 people
of the Royal Opera House were receiving salaries of between £50,000
and £100,000 a year. Were you able, Sir Richard, to ascertain
whether either of those allegations is accurate? From your own
experience of running a state-funded organisation, would you be
able to work out how 33 people could possibly be employed usefully
to attract that kind of salary?
(Sir Richard Eyre) The answer to your first question
is that I think both the allegations are false. I did investigate
that claim of the Covent Garden Community Association and found
it to be an exaggerated one. I think it is a smaller number than
33. I did look at comparative figures of senior executives. I
looked at the RSC, ENO and the National Theatre as the comparators
and did find the Opera House to be over-paying, by the standards
of the other organisations, middle to senior management, and in
some cases at least 50 per cent more than the other organisations.
I would say there are two reasons for this. The first reason is
that the conspicuous disparity between the fees paid to guest
singers and conductors and the salary levels of executives is
obviously very wide. This I do stress in the report, and it has
to be remembered that if you compare the Royal Opera House and
the English National Opera the costs of the two are quite similar,
with two distinctions. One is that the premium of guest singers
and conductors is very high—it is about £5 million—and
that really accounts for most of the disparity between the cost
of the two opera companies. The other area of disparity is the
cost of senior management. In my view, the senior management has
simply been escalated partly because they are people dealing with
very well-paid singers and conductors who are well-paid because
they have a price on the international market; secondly, because,
as I think we all agree, the Royal Opera House have regarded themselves
as sui generis and therefore not having any comparators
which they recognise within the British subsidised arts.
18. I have one final question on the sui
generis point which you have made. You refer in your report
to the potential of the new Sadler's Wells for housing events
which can help to finance it, such as conferences. Is there any
reason why, when performances or rehearsals are not taking place
at the Royal Opera House, the Royal Opera House should not earn
money in the same way?
(Sir Richard Eyre) No. This is another example of
the Royal Opera House needing to recognise that they occupy the
same landscape as any other national arts organisation. If you
go to the National Theatre many mornings during the year you can
find that it is hosting conferences for a number of different
organisations, and that on Sundays there may occasionally be commercial
concerts. There is absolutely no reason that this extraordinary
facility, which has been endowed by the National Lottery and has
been endowed by the State for many, many years, of the redeveloped
Royal Opera House, could not be used for a number of different
activities in addition to opera and ballet. There is this extraordinary
resource which must be maximised, and this is one way in which
other arts organisations have had to exploit their imagination
and the ingenuity of their management and employees.
Mr Fearn
19. Sir Richard, you do mention in your report
that it would be disastrous to appoint a director general. Do
you consider that one person is capable of actually heading an
organisation like this?
(Sir Richard Eyre) I do. It is a large organisation,
and because it has been conspicuously chaotic it leads people,
defensively or indeed in hostility, to say, "Well, it's too
large to be run, it should be broken down". However, it is
probably smaller in the number of employees and the number of
activities than the Royal Shakespeare Company or indeed the National
Theatre. There are good examples of well-run, complex organisations:
the three opera houses in Paris, run by one man with extraordinary
and exemplary efficiency, albeit much better funded by the Government.
In managerial terms, it is not impossible—this is not squaring
the circle—it is simply that they have got themselves into
a position where those few people in the world who are qualified
and able to take the job are reluctant to take the job, for reasons
that are all too obvious.
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