Select Committee on Culture, Media and Sport Minutes of Evidence


Examination of Witnesses (Questions 309 - 319)

WEDNESDAY 12 JULY 2000

LORD FALCONER OF THOROTON, MR BRIAN LEONARD AND MS CLARE PILLMAN OBE

Chairman

  309. Lord Falconer, thank you for coming to see us today with your colleagues. I understand that it would be convenient for you to make a short opening statement and, of course, the Committee will be glad to hear that.

  (Lord Falconer of Thoroton) I am grateful. I am pleased to be here again. Since I last gave evidence in February 1999, much has happened in the life of the Dome. It has been a period in which the Dome has encountered storms and difficulties; the Dome has made mistakes during this period; in a project of this size, complexity and uniqueness it would be inconceivable that it would not, but it has also achieved a lot. It has received over 3 million visitors so far, 2.7 million of which are paying visitors; it has consistently high visitor-satisfaction ratings—the figures speak for themselves; 85 per cent of visitors are satisfied with their visits and nearly four out of five people say they would recommend the Dome to their friends. Many of the storms sprang from the over-estimate of visitor numbers. The original business plan estimated 12 million visitors. We were not reaching these figures and by May it was apparent that a major reduction was required. This produced the revised budget on which NMEC is now operated. That budget has figures based on actual trading and they are, in my view, achievable. What Peter Middleton of Nomura in his evidence before you described as a tremendous achievement has inevitably been overshadowed by that over-estimate at the beginning. My hope is it will not overshadow what has been achieved. The Dome is the most popular pay-to-visit attraction in the United Kingdom. It has high customer satisfaction and it is the fifth most popular visitor attraction in the world. But we must also remember that the Dome is about much more than the creation of a successful visitor attraction in Greenwich. It is also about regeneration. Locating the Millennium experience on the Greenwich Peninsula has been a key decision that has helped regenerate a derelict and heavily contaminated site that had lain idle for more than twenty years. English Partnerships has transformed the formerly derelict site into an area that has already begun to flourish with a variety of new developments including the Dome, innovative community facilities and fresh ideas which are creating an exciting new urban quarter for London. The legacy is in its last stages and will provide a permanent future for the Dome. The transformation of Greenwich of which the Dome is a focus continues. It has been a stormy road and the storms will, I am sure, continue but the prize of a successful exhibition for the year, a permanent legacy and a regenerated Thames gateway is attainable and worth fighting for. I believe in time the project will be judged to be a success.

  310. You said it is the fifth most popular pay-to-visit attraction in the world. Can you tell us what the other four are?
  (Lord Falconer of Thoroton) Certainly, yes.

Mr Fearn

  311. Good morning. Could I ask who would be responsible if the Dome became insolvent, and what is your liability on that?
  (Lord Falconer of Thoroton) If the Dome became insolvent it would be a matter, ultimately, for Government to bail it out in some way or another. However, the position would not be reached where the Dome was insolvent. It has always been monitored extremely closely and we have only proceeded on the basis that the Dome can continue successfully to the end of the year 2000. It would not be right that creditors who dealt with the Dome would not be sure that they would get paid at the end of the day.

  312. So you would not have personal liability; it would be the Government?
  (Lord Falconer of Thoroton) I would not have personal liability but that would be normal on the basis that the shareholder is not normally personally responsible for the debts of a company.

  313. Now Jennie Page told us the budget actually works as a balanced budget of around 11 million visitors, and you have already mentioned that in your opening statement. Would the Government have decided to continue with the project if the original figures, shall we say, on the business plan had forecast only 6 million?
  (Lord Falconer of Thoroton) If the original budget had been based upon 6 million visitors then obviously there would have been a lower figure in terms of revenue and I think what would have happened is that the Government—though I cannot tell because it was both the previous Government and this one that made the relevant decisions—would I suspect have decided to go ahead but with a different sort of plan, because if one knew one was going to get less revenue from visitors, one would have cut one's costs in particular areas and that would have led to a different sort of proposal from the one that went ahead. Maybe it would have been the same in concept but with different elements to it.

  314. So should there have been more future planning on that balanced budget, as it were? Should there have been two or three balanced budgets waiting for those figures?
  (Lord Falconer of Thoroton) Well, a lot of work went into fixing what the right budget was before the decisions were made to go ahead. I think Jennie Page in her evidence gave a detailed account of how the 12 million figure was reached. It was reached on the basis of advice taken at the time; there were differing views about what the right figures were—indeed, you will know that some people put the figure substantially above 12 million and I think the Millennium Commission put the range between 8 million and 12 million. We obviously got it wrong but it has to be said it is quite difficult, I would have thought, to estimate how many people are going to come to what is a very new, rather unique event like an exhibition in the Dome. So, although we know with the benefit of hindsight that it should have been lower, I do not think it is right to say that it is obvious it was wrong at the time—far from it.

  315. I like the Dome. I have been three times; my family enjoy it and everybody I speak to does but did you have any influence at all in the contents? Jennie Page at one time kept the whole thing under wraps and it was all secret, which was probably a good thing because it built up publicity which would not have been there before, but did you have any influence in the contents, and do you think the content is right now?
  (Lord Falconer of Thoroton) I think the content is right. The number of views that you have about the content is reflected in people's reaction to the Dome and in the press comment on the Dome. The vast majority of people who go have a good time. They do not all like all of it, but most of them like some of it and the vast majority like it overall. If you divide the press comment from that which is talking about the history of the Dome from that which is, as it were, reviewing the content, many of the reviews are quite favourable. Just two weeks ago there was an article by Jon Snow in the papers describing a large number of different people in the Dome all having a very good time. Whether the contents are good or bad is ultimately a subjective judgment. I think the most compelling judgment about it is what you have just said, which is that the vast majority of people enjoy it, which looks to me as if we have—broadly—got it right.

  316. And finally can I ask whether you have a hands-on effect on what is happening now? Is it day-to-day or week-by-week when you meet or when?
  (Lord Falconer of Thoroton) The one thing I know is that people from Westminster and Whitehall cannot run a visitor attraction. I am the shareholder—not a member of the board or an executive. I keep fully in touch with what is going on in the Dome because my responsibility is to be accountable to Parliament for what is going on in relation to the Dome but I make absolutely no attempt to run, or interfere in the running of, the Dome.

  317. But you go?
  (Lord Falconer of Thoroton) I go regularly. I have been about thirty-six times.

Chairman

  318. Before I call the next member I would like to follow up the very last question that Mr Fearn put to you and your response. You say that you do not believe that Whitehall or Westminster can run a visitor attraction. You came in part-way through; the structure is inherited from the previous Government; but looking back on it, what would your view be on the proposition I put to you, namely, that the public sector bodies are not appropriate bodies to run visitor attractions? A Royal palace or a museum with a static exhibition inherited can be run probably quite well by a public sector body but this kind of dynamic organisation is not something that public sector bodies have got any experience on.
  (Lord Falconer of Thoroton) Public sector bodies plainly do not have the experience of running a thing like that because it needs a very quick response; it needs, as it were, a long term commercial view, quite frequently. The Dome did not start on that basis but eventually a structure was reached where, because the private sector would not fund the Dome in the first place and the nation wanted to do this, a structure within the public sector had to be adopted. The structure that was set up by the previous Government which we inherited was one that, to a large extent, sought to replicate that which would be the position in the private sector with a shareholder, a board and a chief executive. We have tried as much as possible to give effect to that structure by leaving the people who are running the Dome to get on with it because obviously it is easier and more effective in running a visitor attraction to do that.

  319. No doubt everybody has done their best but I see a report in The Times today of an interview with Mr Gerbeau in which he said that only 4 per cent of the cost of the Dome had been put aside for the marketing and, in his view, the figure should have been five times as high. Now, right from the beginning of our five inquiries, this Committee has made the point about marketing and, as I say and as you say, this is something that was inherited as a structure just as it was a project, but visitor attractions, theme parks, all the rest of them, spend huge amounts on marketing and clearly those who are involved right from the very beginning who were appointed long before the Dome was completed, simply had no experience of what proportion of expenditure should be on marketing and things like that. So I would take it you would agree that, should analogous projects ever in any way be launched, this is a lesson to be learnt?
  (Lord Falconer of Thoroton) I could not agree more with that. Marketing issues are very important. People were brought in at the beginning of the year 1999 who had experience in visitor attractions because we were gradually moving from the construction phase to the visitor attraction phase. In relation to the marketing I suspect there was a view which said that, because the Dome was such a big political issue—it was on the front page and the inside page of the newspapers more than, for example, Disneyland—that would bring it some profile beyond that which it would normally get as a visitor attraction, but it is perfectly plain that more money needs to be spent on marketing and, indeed, that is what we are about to do.


 
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