Select Committee on Culture, Media and Sport Fourth Report



The current role of local authorities

66. Local authorities have been the effective mainstay of the sports events industry in this country for a number of years. Local authorities have been a major source of investment in facilities for events. To take two of the most prominent examples, Birmingham and Sheffield City Councils have invested heavily in facilities of international standard.[165] Although the then Department of the Environment provided approximately £33 million for capital projects associated with the 1991 World Student Games, the City of Sheffield invested £139 million in state-of-the-art sports facilities. These were initially provided for the World Student Games, but have been utilised for a great many international sporting events in subsequent years.[166] Moreover, in many cases, local authorities are responsible for the continuing maintenance of facilities designed originally for major events.[167]

67. The involvement of a city authority has been essential for many British bids for sporting events.[168] South Glamorgan County Council (now Cardiff Council) played a pivotal role in preparing the bid for the 1999 Rugby World Cup, assisting the Welsh Rugby Union on non-rugby-related issues, preparing information on venues and producing the bidding material.[169] Often, local authorities have been lead players in the staging of events and the main source of public subsidy for loss-making events.[170] Local government is often expected to underwrite events.[171] The pivotal role of local authorities is particularly evident in the case of the three designated "National Cities of Sport"—Sheffield, Glasgow and Birmingham.[172] These cities have devoted considerable resources to sporting events in pursuit of local benefits.[173] The most significant current example of an event where a City Council is undertaking a lead role is that of the Manchester 2002 Commonwealth Games.

The importance and scale of the Commonwealth Games

68. The Commonwealth Games have had a mixed record in this country. After its success in staging the 1970 Games, Edinburgh found that the experience of the 1986 Games was not one of "unalloyed success".[174] There were few gains in terms of sports facilities and sporting performance from the latter Games.[175] They were marred by a large-scale boycott due to the then Government's policy on sanctions against South Africa and by financial difficulties.[176] The potential wider benefits of the event were not captured.[177]

69. Since then the Commonwealth Games have entered a new era. The Commonwealth itself has acquired new economic and political significance since the end of apartheid in South Africa and the conclusion of the Cold War.[178] The Games have emerged more clearly as a leading Commonwealth institution.[179] The sports programme has expanded and the addition of team sports has proved a "huge success".[180] The Kuala Lumpur Games of 1998 have set a new and demanding standard of facility provision for the Games.[181]

70. The Prime Minister said in the House of Commons as recently as 12 May 1999 that the Manchester 2002 Commonwealth Games "will be the biggest multi-sporting event in Britain since the 1948 Olympic Games".[182] They are expected to attract a global television audience of half a billion.[183] Following resolution of earlier uncertainties about the number of sports to be included in the sports programme for the Games, it seems certain that there will be at least 14 individual sports and 3 team sports in 2002, involving 5,250 athletes and officials. The Manchester 2002 Games will be the largest ever Commonwealth Games.[184] The programme will include fully-integrated events for disabled athletes.[185]

Facility provision and local benefits

71. The staging of the Commonwealth Games in Manchester was made possible because of the facilities developed for the city's Olympic bid, including the National Cycling Centre and the largest seated indoor arena in western Europe.[186] The English Sports Council has agreed a Lottery grant of £112 million for further facilities, which will be supported by investment of over £20 million by Manchester City Council.[187]

72. Mr Fennell said that it was a "major concern" of the Commonwealth Games Federation that the main Stadium for the Games at Eastlands remains to be built.[188] Many of the facilities for the Melbourne Commonwealth Games in 2006 are already in place. Both Manchester City Council and the English Sports Council were confident that a timetable providing for completion of the Eastlands Stadium by January 2002 would be met.[189] Negotiations with Manchester City Football Club, whose role as an anchor tenant is essential to the long-term viability of the Stadium, were said to be nearing completion.[190]

73. The principal rationale of Manchester City Council in staging the Commonwealth Games is to secure social and economic benefits for the local population and the regeneration of East Manchester. The Stadium will be part of a sports complex which will serve as a regional centre of the United Kingdom Sports Institute. The development has attracted investment from a wide range of public and private agencies.[191] A study commissioned by the Council estimates that the Games will generate a total of 5,681 permanent and 10-year equivalent jobs, many of which will be available to local residents of an economically disadvantaged area.[192] The longer term impact could be substantially higher if the Council succeeds in its strategy of using the Games to provide an impetus for investment and development in the City.[193]

Organisation, finance and the national dimension

74. The initiative for staging the Commonwealth Games in Manchester came from the City Council and it is playing a leading role in delivering the event. It has direct responsibility for facility development and regeneration, but has delegated responsibility for organising the Games to a Company with a separate legal identity. Manchester Commonwealth Games Ltd is the Organising Committee for the Games, and includes representatives of the Commonwealth Games Federation, the private sector, the Commonwealth Games Council for England and the City Council, plus observers from the English Sports Council and the Department for Culture, Media and Sport. A subsidiary operating Company, Manchester 2002 Limited, is responsible for delivery of the Games organisation.[194]

75. The Commonwealth Games do not have a record of profitability and the City Council has underwritten the Games in financial terms.[195] The Council's original bid forecast that the operational budget for the event would break even.[196] Since then other cities which considered bidding and the English Sports Council have voiced doubts or concerns about the realism of this forecast.[197] The expansion of the sports programme for the Games has meant that the costs of the Games have escalated since the original bid. The business plan is being reviewed by a Committee under the chairmanship of Sir Rodney Walker in the light of this and of current forecasts of revenue.[198]

76. There remain many uncertainties about revenue for the Games. Agreements on the sale of broadcasting rights for Australia and the United Kingdom have yet to be completed and may be delayed for some time to maximise the value of rights, although United Kingdom rights will certainly involve a terrestrial broadcaster.[199] The only major confirmed sponsor of the event is Manchester Airport and, although the organisers expected to announce other sponsors shortly, they also thought that the bulk of sponsorship would be secured in the two years before the Games.[200] Since the event has been underwritten by the City Council and there will be major public investment in facilities, the English Sports Council held out no prospect of itself providing any revenue support for the 2002 Commonwealth Games.[201]

77. Manchester City Council is making provision to ensure that any cost overruns do not directly affect local services.[202] However, it left little doubt that it was focusing its own resources on maximising the local benefits from the event and could not be responsible for the overall national impact.[203] Manchester City Council is not unduly proprietorial about the Commonwealth Games: Councillor Leese stated that "they are the English Games being held in Manchester and we very much want to see them being perceived as a national event not one that is either a local event to Manchester or even merely a regional event in the North West of England".[204]

78. There is an immense national stake in the success of this event. As Mr Fennell made clear, the "rest of the Commonwealth do not see this as just being hosted in Manchester; they see it as a Games in England; they see it as a whole country hosting the Games".[205] The Prime Minister said in the House of Commons on 12 May 1999 that the 2002 Manchester Commonwealth Games "will be a tremendous showcase not just for Manchester, but for the whole of Britain".[206] The Games will take place during the Queen's Golden Jubilee year, a fact which is likely to give the event special significance nationally and internationally.[207] Most importantly, positive perceptions of the event across the world are fundamental to the prospects of future bids for other major events, as Mr Banks acknowledged.[208]

79. Many of the activities necessary to ensure the success of the Games require involvement at a national level. When we took oral evidence from the British Tourist Authority, we were very concerned that it had had no formal contact with the organisers of the Games despite the "huge potential" of the event.[209] In subsequent written evidence, the Authority sought to correct any impression that its engagement with the event was "too limited or tardy".[210] It set out a timetable for a marketing campaign and confirmed subsequently that it had held its first planning meeting with the organisers.[211] It also pointed out that the Department for Culture, Media and Sport had not convened a meeting of the Commonwealth Games International Group for some time.[212] Discussions at national level on the cultural programme are only at an exploratory stage.[213] The business plan for the Games is dependent upon securing sponsors of national status.[214] Councillor Leese thought that the target for sponsorship was "only achievable if we get very significant support from Government".[215] Mr Banks said that "Manchester, with Government support, has got to do far more to sell the Commonwealth Games".[216]

80. However, a supporting role from Government may not be enough. Councillor Leese thought that the Government needed to take "a leading role" rather than "a strong supportive role".[217] He left no doubt that the delivery of a major event required a partnership with Government in a leading role.[218] Sir Rodney Walker thought that there needed to be a "much clearer structure" for the management of the Games and told us that he had been asked to consider becoming Chairman of Manchester 2002 Limited, the subsidiary operating company of the Organising Committee.[219]

The future roles of local and central Government

81. As the non-sporting requirements associated with events have escalated in scale and importance, the process of bidding for and then staging international sporting events in this country has become too dependent upon the goodwill and financial support of local authorities. Local authorities, as instanced by Manchester in respect of the 2002 Commonwealth Games, have played a valuable and commendable role in this field and have a continuing role in support of other bodies and in relation to smaller scale events.

82. However, major events are national in character and this should be reflected in arrangements for their organisation. Tournaments spread across the country such as Euro '96 and the Cricket World Cup are vulnerable to the differing priorities of local authorities.[220] Major events concentrated in one city have imposed a considerable and unfair burden on the relevant city authority: those authorities are expected to be responsible for some facility costs, to subsidise and under-write the running costs and to meet many of the hidden costs associated with events. This burden is most apparent in the inheritance of debt for the City of Sheffield from the 1991 World Student Games.[221] The benefits to local business and to the local economy resulting from events do not bring direct financial benefit to local authorities due to the nature of the local government finance system.[222] The commitment of local government to staging sporting events is often crucial to their success. Local authorities are key partners in sporting events. However, major events are not municipal, but national. The Government and national bodies must now recognise this and take a more leading role themselves in partnership with host local authorities.

83. There is no reason to doubt that the preparations for the Manchester 2002 Commonwealth Games are being well-managed by Manchester City Council and the other parties involved. The problems lie not in their abilities, but in their priorities and position. The Council is accountable to the Council taxpayers of Manchester and cannot be expected to justify to them expenditure linked predominantly to non-local benefits. The Games are a national event of national importance which deserve and require national leadership. There should be a recognition that regional and national benefits may be best secured by national investment. Success of the event is pivotal to the United Kingdom's prospects for attracting future major events: if this country cannot organise a Commonwealth Games of world stature, there would seem little point in contemplating a bid for the Olympics. The financial success of the 2002 Games, particularly in attracting sponsorship support, depends upon the event being promoted as an event of national importance by the Government. We recommend that the Government, as a matter of urgency, examine the financial plans and needs of the Manchester 2002 Commonwealth Games, accept the necessity for additional central Government support and determine the scope for such support. The Government should also involve itself more closely in the strategic management and promotion of the Manchester 2002 Commonwealth Games.

165  HC (1994-95) 493, Q 68 and para 19. Back

166  Ibid, p 89; Evidence, pp 253, 256. Back

167  Evidence, pp 228, 263. Back

168  Evidence, pp 203, 229. Back

169  Q 220; Evidence, pp 258-260. Back

170  Evidence, pp 7, 228-229; Major Events: The Economics, p 4. Back

171  Evidence, p 256. Back

172  Major Events: The Economics, p 5. Back

173  Evidence, pp 188-190, 196, 217, 253-257; QQ 322-323; Major Events: The Economics, pp 9, 13; HC (1994-95) 493, paras 15-17, 27-28. Back

174  Evidence, p 217; HC (1994-95) 493, Q 103. Back

175  Evidence, pp 203, 217. Back

176  IbidBack

177  Evidence pp 217, 232. Back

178  First Report from the Foreign Affairs Committee, The Future Role of the Commonwealth, HC (1995-96) 45-I, paras 3, 4, 205. Back

179  Q 408. Back

180  Commonwealth Games Federation brochure, 1998, p 11; Q 406. Back

181  Annex 2, paras 6, 13; Q 403. Back

182  HC Deb, 12 May 1999, col 317. Back

183  Evidence, p 67. Back

184  Evidence, pp 67, 70; QQ 134, 533; Annex 3, paras 9, 18. Back

185  Evidence, p 245; Annex 3, para 9; Q 550. Back

186  HC (1994-95) 493, paras 30-31; Annex 3, paras 27, 29. Back

187  Evidence, pp 145, 70; QQ 507, 276. Back

188  Q 421. Back

189  Evidence, pp 147, 292; QQ 506-507. Back

190  Evidence, pp 69, 146, 292; Q 279. Back

191  Evidence, p 69; Q 320; Annex 3, paras 6, 28. Back

192  2002 Commonwealth Games Economic Impact Assessment: Executive Summary, KPMG, March 1999, p 5. Back

193  Ibid, pp 6-7. Back

194  Evidence, p 70; Q 143. Back

195  HC (1994-95) 493, p 10; Evidence, p 70. Back

196  Evidence, p 68; Manchester 2002 Commonwealth Games Bid, p 114. Back

197  HC (1994-95) 493, p 10 and QQ 68, 151. Back

198  Evidence, p 70; QQ 134, 139-140, 276, 533. Back

199  Evidence, p 72; QQ 130-132, 273, 305, 572. Back

200  Evidence, p 73; QQ 277, 305, 311-314. Back

201  Evidence, pp 146, 147; QQ 528-529. Back

202  Q 323. Back

203  Evidence, p 71. Back

204  Q 283. Back

205  Q 401. Back

206  HC Deb, 12 May 1999, col 317. Back

207  Q 285; Evidence, pp 168, 258, 282. Back

208  QQ 286, 575; Evidence, p 237. Back

209  Evidence, p 85; QQ 331, 342-343. Back

210  Evidence, p 92. Back

211  Evidence, pp 92-93, 281-282. Back

212  Evidence, p 93. Back

213  Evidence, pp 168, 270; Q 285; Annex 3, para 17. Back

214  Evidence, p 73; Q 314. Back

215  Q 276. Back

216  Q 572. Back

217  Q 283. Back

218  Q 318. Back

219  QQ 535, 534. Back

220  Evidence, p 49; QQ 168-169, 504. Back

221  Evidence, pp 230, 262; HC (1994-95) 493, para 19. Back

222  Q 505; Evidence, p 71. Back

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Prepared 19 May 1999