Examination of Witnesses (Questions 360
- 379)
WEDNESDAY 12 JULY 2000
LORD FALCONER
OF THOROTON,
MR BRIAN
LEONARD AND
MS CLARE
PILLMAN OBE
360. What was his experience of design matters?
He had been a lecturer at the Royal College of Art?
(Lord Falconer of Thoroton) For a number of years,
that is right, and he was somebody in a management role in relation
to that but obviously, when you are doing something like this,
it is a unique experience.
361. He compared it to working for the Prime
Minister during the General Election campaign, or Mr Mandelson?
(Lord Falconer of Thoroton) I think you are very much
over-estimating his role as part of a team. The team was a large
number of designers contributing to the design of the Dome.
Chairman
362. Mr Faber has raised an important question.
He was appointed by Jennie Page?
(Lord Falconer of Thoroton) That is right.
363. Is there any implication whatever that
either the Prime Minister or the Government or the Labour Party
had any involvement in his appointment?
(Lord Falconer of Thoroton) None whatsoever. Indeed,
he had worked for Jennie Page at English Heritage earlier. He
was known to Jennie Page.
Mr Faber
364. At the meeting two weeks ago I requested
a breakdown of the costs of the individual Zones which NMEC have
very kindly sent to us and which I understand is commercially
in confidence. The reason given is that there are still final
costings being negotiated with some of the contractors so, of
course, I will, as I always have, respect that confidentiality
but that confidentiality, as I understand it, only applies to
the individual costs of the various Zones and I do not think the
global figure which is arrived at in the end need be treated as
commercially in confidence. In the original budget in the last
set of accounts £202.3 million was budgeted for the kitting
out of the Zones. By my maths, having added up the various cost
of the Zones, the total I have come to is £142.56 million
which is £60 million short of the original budget. Now, I
do not think even the most ardent supporter of the Dome would
suggest that the Zones have come in £60 million pounds under
the budget. Where has the rest of that money gone?
(Lord Falconer of Thoroton) I would imagine part of
the £60 million was the contingency—
365. I am coming on to that. So you think £60
million was the contingency?
(Lord Falconer of Thoroton) Part of it, yes, but looking
at page 2 of Mr Gerbeau's letter, there is a figure that is a
total; on top of that figure there are the two Zones that were
nil in the budget. What I would like to do, if I may, in relation
to this is write to you because the precise detail of that—
Chairman
366. Would you write to me?
(Lord Falconer of Thoroton) I apologise. Yes, I will
write to the Chairman.
Mr Faber
367. Yes, and what I actually requested of Mr
Quarmby was a breakdown of the cost of the Zones against the original
budgeted cost—what was intended to be spent as against what
was actually spent. Now since then, in the new set of accounts—
(Lord Falconer of Thoroton) Which are?
368. The new business plan which Janet Anderson
gave in a written reply to my colleague James Gray a couple of
days ago, this particular budget has risen to £240.2 million,
so we are now £100 million short not just £60 million.
Is that all contingency as well?
(Lord Falconer of Thoroton) Again, it would be wrong
for me to start trying to describe the figures here. Can I write
to the Chairman in relation to the figures on that?
369. If I could go on, the other thing which
I requested was the cost of the Richard Rogers contract within
the global figure which again in the original accounts was £289
million and has now dropped slightly in the new business plan
to £271.2. I think Mr Gerbeau may have misunderstood me.
My interest in Richard Rogers' contract was not his contract per
se, but in the percentage it made up of that global figure. Again,
I would be grateful just for the sum and a breakdown of how that
£271.2 million has been arrived at?
(Lord Falconer of Thoroton) These detailed questions
about the figures look to be legitimate questions but they are,
in a sense, follow-up questions to the ones you were asking of
Mr Quarmby and Mr P Y Gerbeau and it may be more appropriate for
them to write with the answers rather than myself because they
are the ones with the hands-on operational finance responsibility.
Chairman
370. Perhaps when you are sending that material,
Lord Falconer, you can tell us the date when the Richard Rogers
contract was signed?
(Lord Falconer of Thoroton) Yes.
Mr Faber
371. Similarly, on the issue of contingency,
Mr Quarmby at the very beginning of his evidence in reply to Mr
Fearn said there was a revenue contingency of about £40 million.
In fact it was in the accounts as £41 million but since then
that has been corrected by NMEC and what he meant to say was that
it was a cost contingency. As I understand it there is roughly
£40 million of cost contingency and a further £41 million
of revenue contingency.
(Lord Falconer of Thoroton) That is correct—or
was. There was a contingency in the original budget. I cannot
tell you the precise amount that is still left but that contingency
has now I think, to a large extent—
372. So what you are saying on this is there
was roughly an £80 million contingency split between cost
and revenue?
(Lord Falconer of Thoroton) That is right.
373. Hence Mr Gerbeau's comment that you would
normally have roughly 10 per cent of your overall contract as
contingency?
(Lord Falconer of Thoroton) Yes.
374. When I arrived he said the cost contingency
had been spent, and I would be grateful to find out how the revenue
contingency has been spent as well?
(Lord Falconer of Thoroton) Certainly. Part of the
revenue contingency was spent on the million school children and
some of it was dealt with up-front before we started because—
375. So a lot of the revenue contingency was
spent on—
(Lord Falconer of Thoroton) "A lot" is the
wrong description, but some of it was.
376. If we could have a breakdown of that that
would be very helpful. Finally, Chairman, there was an article
in the Sunday Telegraph at the weekend concerning the legacy and
concerning the amount of money that will come back from the legacy
to the Dome, originally budgeted at £15 million?
(Lord Falconer of Thoroton) I think the £15 million
was put into the figures on the basis that what was going to happen
was that the Dome would be dismantled at the end and there would
be no sale of any aspect of it. So the £15 million I think
was something like cost of decommissioning which was taken off
which was the minus, and the plus was what you would get for various
things inside it.
377. But the article in the Sunday Telegraph
says only £15 million was originally meant to go to the Dome's
budget and now the Dome will get about £70 million. Is this
inaccurate?
(Lord Falconer of Thoroton) Yes, (a) because it is
not known what the bidder will pay for the Dome because no decision
has been made; secondly, it is inaccurate because no decision
has been made as to the split between NMEC, who, as it were, own
the Dome and English Partnerships who own the rights in the land.
It is a great bundle of land and Dome that is being sold.
378. So the anonymous minister quoted in the
Sunday Telegraph as saying, "The voters have never heard
of English Partnerships. They will not care two hoots if it does
not get the money", was speaking out of turn?
(Lord Falconer of Thoroton) I would very much doubt
if that is what was said. It certainly does not reflect the position.
379. Well, you know newspapers. It is in inverted
commas which normally means someone has said it.
(Lord Falconer of Thoroton) I would agree with that,
Mr Faber, yes!
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