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.
|
