Select Committee on Culture, Media and Sport Minutes of Evidence



Memorandum submitted by Manchester City Council and Manchester 2002 Limited

INTRODUCTION

  1.  This memorandum has been prepared jointly on behalf of Manchester City Council and Manchester 2002 as a contribution to the Committee's Inquiry into the staging of international sporting events in the United Kingdom. It focuses primarily on the 2002 Commonwealth Games—the biggest multi-sports event ever hosted in this country—which the City Council has underwritten and which Manchester 2002 is responsible for organising.

  2.  The Commonwealth Games will involve over 10,000 athletes, officials and media representatives, as well as up to 15,000 volunteers, and will coincide with the Golden Jubilee of HM The Queen. The Opening Ceremony will take place on 25 July 2002, and the Games will span a period of 10 days. They will be broadcast to a global television audience of over half a billion viewers, and will attract around 500,000 visitors to Manchester. The 2002 Games will be the biggest ever held with 14 individual sports and three team sports and 5,250 athletes and officials—bigger than even Kuala Lumpur which took place last year.

  3.  The Games are England's Games which are being held in Manchester and the North West. Their success is crucial in the national interest. The Games provide the opportunity to "showcase" Britain on an international stage, giving real momentum to the national drive to bring other major events, including the 2006 World Cup, the 2003 World Athletic Championships and the Olympic Games, to this country. They also provide the opportunity to create stronger international trade and investment links between this country and the rest of the Commonwealth, and to demonstrate our prowess as a nation in sporting excellence and achievement. A successful Games will also stimulate and reinforce sports development and healthy living policies throughout the nation.

  4.  Because Manchester has placed sport and culture at the heart of its strategy for regenerating the City, a successful Games also creates major opportunities to stimulate public and private investment to generate jobs and investment, and improve the quality of life of many people.

  5.  This memorandum:

    —  Explains Manchester's experience in bidding for major sporting events, and the background to Manchester's bid for the 2002 Commonwealth Games;

    —  Progress which has been made in staging and organising the Games, including the innovative approach taken by Manchester to maximise the opportunities for economic and social regeneration; and

    —  Considers the role of Government in ensuring the success of those Games.

  The City Council and Manchester 2002 look forward to amplifying this memorandum in oral evidence to the Committee.

MANCHESTER'S BID FOR THE COMMONWEALTH GAMES

  6.  The City has become a major venue for world class events and has attracted a number of major sporting events, including the 1996 World Track Cycling Championships and the 1997 World Table Tennis Championships. Manchester was the British nomination for the 1996 and 2000 Olympic Games, which was influential in enhancing the City's sporting and cultural infrastructure and in establishing Manchester's, and the region's, credentials as a high quality venue for major sports events.

  7.  Hosting major sporting events is a fundamental part of promoting and marketing the City region, and in generating economic and social benefits. The direct employment generated by the Eastlands development alone, where key sports facilities including the Stadium, will be located, are estimated at over 3,700 jobs (gross) including multiplier effects. In Victoria for the 1994 Commonwealth Games tourism revenues increased to a record £400 million, and generated economic activity conservatively estimated at more than £250 million.

  8.  Manchester's bid for the 2000 Olympic Games was a particularly positive experience. It created a strong sense of civic pride throughout the City and a new partnership was forged between local and central government, the BOA and other national sports bodies, resulting in a major boost to sports development nationally and locally. It was against this background that the CGCE's invitation in 1993 for the Council to consider making a bid for the English nomination to host the 2002 Commonwealth Games was considered.

  9.  The review process we undertook concluded that while there had been serious problems in hosting the 1986 Commonwealth Games in Edinburgh, the Games were still highly regarded both nationally and internationally. Victoria 1994 and Kuala Lumpur 1998 all promised to be highly successful events underpinning the status of the Games as second only to the Olympic Games as a major multi-sports event. The Council was particularly anxious to ascertain whether Government would support an English bid to host the 2002 Games, and whether there was confidence in continuing to work with Manchester if selected by the CGCE. Before deciding to submit a bid for the English nomination representatives of the City Council therefore met both Mr Gummer (then Secretary of State for the Environment and who acted as "sponsor" Minister for the 2000 Olympic bid) and Mr Brooke (then Secretary of State for National Heritage) to discuss the principle of an English bid for the 2002 Games. Discussions were also held with the Shadow Minister for Sport. In the light of those discussions Manchester believed that a bid to host the 2002 Games in England would enjoy strong Government and all-party support, particularly promotional support, once the CGCE had decided which City should be put forward to the CGF for the English nomination.

  10.  The City Council subsequently decided to submit its bid to the CGCE and on 2 February 1994 secured the English nomination in preference to Sheffield and London.

  11.  Once the English nomination was secured a big promotional push was made particularly in Victoria 1994 to underpin England's candidature. Both Stephen Dorrell (then Secretary of State for National Heritage) and Iain Sproat (then Minister for Sport) attended these Games to promote the bid with the officers and membership of the CGF. This campaign is widely regarded as having been influential in underpinning England as firm favourite as host nation for the 2002 Games. So was the fact that the 2002 Games would coincide with HM The Queen's Golden Jubilee. Indeed, there was a very strong feeling amongst the CGF membership that because of the Golden Jubilee it was almost unthinkable for the 2002 Games to be hosted anywhere other than in England.

  12.  Manchester was obliged to submit its formal bid to the CGF in April 1995. It was prepared following consultation with the Department of National Heritage. The bid document incorporated the required confirmation that if selected the Council would underwrite the operation of the Games. The document also contained a foreword by the then Prime Minister and a declaration on behalf of Government in the following terms:

    "HM Government is a full and active supporter of the Manchester bid for the 2002 Commonwealth Games. It has taken note of the obligations contained in the CGF constitution, and it too is satisfied that this (the bid) document represents a realistic and achievable plan for organising and staging the Games. HM Government, with the support of Manchester City Council, will take all necessary steps to ensure that obligations are performed.

    The Government is confident that if Manchester is chosen by the CGF the necessary facilities will be built partly by private finance and partly by public funding; and will play its part to ensure that the funding necessary to stage and organise the Games is provided."

(Manchester 2002 bid document, April 1995, page 118)

  At the time this declaration was endorsed by the Government it was made clear to the Council that public sector funding could not be guaranteed. This did not create major concern given the advent of the National Lottery and the fact that at that stage a break-even operational budget was being predicted. Indeed, the then Leader of the City Council discussed the position with the then Secretary of State for National Heritage prior to the bid being submitted. It was confirmed that the Council would be able to submit bids for public sector or other public funding programmes in order to ensure that obligations particularly in relation to venue provision, could be fully and properly discharged.

  13.  In November 1995, Manchester and England were confirmed as hosts for the 2002 Commonwealth Games at the CGF Assembly in Bermuda. The Manchester team was accompanied by Iain Sproat as Minister for Sport, and Tom Pendry as Shadow Minister, thus demonstrating Government and all-party support for the 2002 Games.

ORGANISING AND STAGING THE GAMES

  14.  Since the award of the Games the City Council and its partners have focused their energies and resources in the active pursuit of the following three objectives:

    —  To maximise the economic and social benefits from hosting the Games as a result of new infrastructure provision and the staging of the Games.

    —  To develop a strong organisational framework to promote the sporting excellence and the delivery of a successful event.

    —  To engage Government as a key partner in the total enterprise both to ensure the highest quality event in the national interest, and to ensure that national benefit is maximised.

  The progress which has been made in all of the areas is summarised below.

(i)   Economic and Social Regeneration

  15.  Manchester witnessed in Atlanta for the 1996 Olympic Games how the economic and social benefits from hosting a major event can by-pass the resident population. Conversely, it saw in Barcelona four years beforehand the potential which can flow from transforming the physical and economic fabric of a City provided great care was paid to the quality and sustainability of organisational and venue plans. The Council and its partners have been determined to do all in their power to pursue with all vigour a Barcelona-type model for Manchester.

  16.  Sport and cultural facilities have, therefore, been progressed within Manchester where the need for such facilities can be proven, and where they can contribute most to the sustainable regeneration of the City. This approach was one of the influences on the Government's decisions in 1992 to support with private participation wherever possible the building of the Bridgewater Hall, the Indoor Arena, the National Cycling Centre and to assemble the Eastlands site in East Manchester for comprehensive sport and associated commercial leisure development. This approach remains a fundamental component of the Council's strategy for venue development for the 2002 Games.

  17.  The Stadium will form part of a major public/private "Sport City" development which will transform the image of the Eastern part of Manchester, an area which was once a major production and employment centre and which now contains some of the most economically and socially deprived areas in the region. The regeneration of East Manchester is a major priority. The decision taken to locate the National Stadium at Wembley and locate most, if not all, major sporting flagship events there obliged the Council to redefine its strategy to create a sustainable stadium facility. It has now agreed terms with Manchester City Football Club (MCFC) to become anchor tenant so that all operating risk for the stadium is transferred, and will be the centrepiece of a sports complex facility for high performance athletes and community use. The alternative to agreeing terms with MCFC would have been an athletics facility which would have competed with Sheffield and which could not have been justified. A temporary Stadium structure would have undermined the image of the Games, and would not have contributed much to the regeneration of East Manchester.

  18.  Indeed, the advent of Sport City has enabled the Council to focus new regeneration initiatives to SRB Round 5, New Deal for Communities, Education Action Zones etc around East Manchester to ensure that benefits are maximised. Key principles have been agreed between the Council, English Partnerships and the North West Regional Development Agency to establish, without delay a new Agency to co-ordinate the different initiatives and give strategic direction to the regeneration of the East Manchester area. The Agency will be based on the City Centre Task Force model which has operated so successfully in overseeing the recovery of the City Centre in the aftermath of the IRA bomb.

  19.  The Council and its partners have also worked constructively with public and private sector agencies throughout the region to develop a strong Commonwealth Games Legacy Programme. Known as "Legacy 2002" a structure has now been created, and a bid for public funding has been actively encouraged by Government. The programme will amongst other things enable educational initiatives about the Commonwealth to be promoted, sports development and healthy-living activities to be boosted, and enable the volunteer programme for the Games wherever possible to be rooted in the need to strengthen the skill base of young people from Manchester and the region.

  Enterprise plc, which has offices in different parts of the North West, will drive the initiative, and will be overseen by the North West Regional Assembly and the North West Business Leadership Team. The innovation associated with this initiative and the way it strengthens the linkages between sport and culture and social inclusion has commanded particular interest amongst national institutions. It has also attracted interest internationally; indeed only the other week we received representatives from the Edmonton Organising Committee for the 2001 World Athletic Championships anxious to learn more about the Council's approach.

(ii)   Venue Provision for the Games

  20.  Substantial progress has been made in developing a high quality venue plan. Throughout all of its discussions with the English Sports Council the Council has remained committed to a "compact" venue strategy to underpin organisational excellence. The final influence on these matters however rests with the English Sports Council given its funding and public interest obligations.

  21.  The intention is that all 14 individual sports put forward to the CGF Assembly in 1995 will be incorporated into the final sports programme. The venue position for each sport is as shown in Appendix 1.

  22.  The final selection of Team Sports is still subject to review. Netball remains a definite commitment and will take place in the MEN area. Hockey and Rugby 7s are front-runners for inclusion in the final programme, although Cricket has not been ruled out. The Sports Council is awaiting a detailed proposal from the Hockey Association about a new regional facility which will be available for the Games.

  23.  Where uncertainty exists about the venues for individual sports it has been agreed with the Sports Council that the position will be finalised by September 1999. In the main these uncertainties relate to the specification and operating profile for the rest of the publicly funded facilities to be accommodated next to the stadium as part of "Sport City"—these are subject to Ministerial announcements shortly, likely to constitute a regional component of the National Sports institute. These facilities will be funded largely by the Sports Council and final decisions will be influenced by the outcome of their discussions with NGBs and the operating and financial profile. The Sports Council is the "lead" agency for this process, although the Council is committed to playing a part in all discussions and bringing matters to the earliest conclusion.

  24.  The City Council has committed itself to invest over £20 million to support venue provision in Manchester. The balance (approx £113 million), will be funded by the Sports Council.

(iii)   Organisational Planning

  25.  The City Council has delegated to Manchester Commonwealth Games Ltd (MCGL) the responsibility for organising the Games. Because the Council has under-written the Games it has retained certain residual powers, including the power to approve expenditure beyond certain limits.

  26.  MCGL is the effective "Organising Committee" and has an independent legal identity. It includes representation from the private sector, the CGF, the CGCE and the City Council. Officials of the Sports Council for England and the Department of Culture, Media and Sport attend meetings of MCGL as observers. MCGL is responsible for overseeing the strategic direction of the Games and its operating subsidiary, M2002 Ltd, is responsible for implementation. MCGL is the framework for partnership and is a constitutional necessity. The M2002 Board is much smaller in number, and will provide the focus necessary to drive issues forward. A Commonwealth Games Organising Council meets on a quarterly basis and is the vehicle for ensuring the widest possible participation in all matters associated with the Games. Its membership is diverse reflecting the range of organisations and communities which wish to be associated with the Games in the North West region.

  27.  The following are the current priorities associated with organisational priority.

    The Sports Programme: Manchester will host the biggest Commonwealth Games ever—with 4,800 athletes and officials to be accommodated in Manchester and around 450 to be accommodated at Bisley for shooting. Numbers for Manchester represents the maximum to be accommodated on a single village site and within existing University accommodation. The recent impact of Team Sports coupled with the already extensive range of individual sports has required a review of the overall programme, particularly in the context of reaching a shared understanding with sport on how demand can be matched with capacity. A Task Force set up under the chairmanship of Sir Rodney Walker has met all sports bodies and will shortly present its recommendations. The intention is that all existing individual sports (14) and three team sports will be agreed at the end of April 1999 when the CGF Executive meets in Manchester. Their recommendations will be subject to ratification by the CGF General Assembly in October 1999.

    Business and Financial Planning: MCGL will be considering a Business Plan for publication within the next three months. Sir Rodney's Task Force has the responsibility to oversee this process which is well underway and based upon detailed planning of all logistical arrangements and revenue generation strategies. It is, however, clear that costs will increase beyond those contemplated at the time Manchester's formal bid was submitted to the CGF. This is because of the increase in athletes and officials since initial budgets were prepared. While a definite cost profile cannot yet be defined the range is likely to be between £70 million to £90 million. The Organising Committee has developed its revenue generation strategies, and has retained IMG/TWI to support national and international commercial sponsorship including TV rights. The benefits of these strategies are not expected to be reached until 2000-01. The objective is to match expenditure to income. Appendix 2 provides further details about revenue generation strategies.

    Organisational Planning: MCGL has retained specialist advice from those involved in previous Games as well as other advice in fields of information technology, transport and host broadcasting, to support the major organisational planning work which is now well in hand. All aspects of organisational planning are the subject of specialist working groups with Games Office staff co-ordinating their outputs and integrating them as part of a coherent and integrated plan. The North West Arts Board is leading the discussions locally and nationally on the development of a cultural programme.

  28.  MCGL will shortly announce the creation of a NW Fund Raising Committee, and it is working hard to establish a National Committee both to improve national awareness about the Games and to assist in revenue generation activities.

Role of Government

  29.  The Prime Minister and various Ministers have consistently and publicly indicated their full support for the Games, and these statements of support are welcomed. The public and private sectors in Manchester have always seen the Government as a key partner in the organisational effort. Indeed, it is inconceivable that a national event such as the 2002 Commonwealth Games can be organised successfully in the absence of the active support and involvement of the Government.

  30.  The Kuala Lumpur Commonwealth Games in 1998, the Melbourne Commonwealth bid for 2006, the Barcelona Olympics in 1992, what is being organised in Sydney next year and is proposed for Edmonton for the World Athletic Championships in 2001 demonstrate beyond doubt the crucial importance of National Government support to the successful organisation of major sporting events. Such support extends beyond funding; it goes to the heart of creating and sustaining national awareness to support sponsorship and fund raising; and the delivery of organisational excellence particularly as it relates to transport infrastructure, effective security planning, cultural celebrations and generally underpinning an infrastructure for visitors and the world's sports media. Major sporting events also provide a vehicle for promoting national interest abroad—a major part of the KL 1998 Games and the Sydney Olympics next year. Only National Government has the capacity to fully exploit such opportunities.

  31.  Manchester is anxious to establish a constructive dialogue with Government. The Council remains fully committed to discharging its contractual obligations to the CGF in particular and will do so to the best of its ability. The Council will not compromise on quality standards and, if it is obliged to undertake the task of staging and organising the Games largely by itself, will ensure that while national opportunities may remain unexploited, the event will still be a success for Manchester and the North West region.

OTHER ISSUES

  32.  The funding of international sporting events inevitably focuses attention on the fiscal regimes outside the UK and which enable some of the major beneficiaries from successful events (restaurants, hotels, clubs, shops etc) to contribute to the costs of staging those events through local sales or tourist taxes. There are no firm proposals for similar initiatives in the UK so funding for major events is likely, in the absence of special arrangements, to fall in the main on local government. There is no recognition in the current distribution system of local government finance to such costs. Indeed, for Manchester the position is particularly difficult given its very low tax base, and its obligations to fund regional services, which already means that of the £123 million in business rates collected last year only £98 million was returned to the City. Indeed, because of the City's low tax base the gearing for spend beyond SSAs is extremely high—a 7 per cent increase in Council tax to fund a 1 per cent increase in expenditure.

CONCLUSIONS

  33.  Manchester and the North West will organise the biggest multi-sports event this country has ever hosted. It is vital in the national interest that these Games are successful and are organised to the highest quality.

  34.  Partnership has created a momentum for linking the Games to the sustainable regeneration of East Manchester, the region and to promote sporting excellence. Some of the most innovative initiatives are beginning to show positive results.

  35.  Venue plans are being progressed. The swimming facility is underway, and the Stadium will commence substantively on site late summer. Further progress is now dependent upon Ministerial announcements to discussions now taking place with the English Sports Council.

  36.  The staging and organisation of the Games is a national undertaking, where the active support and participation of Government is crucial to overall success.


 
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Prepared 22 April 1999