Select Committee on Culture, Media and Sport Eighth Report


  IV. DOME MANAGEMENT AND PROJECT DELIVERY

Conception and structure

31. In 1997, we considered the evolution of the Millennium Dome and its public-sector operating company, NMEC.[95] As was evident then, and as Ms Page told us during this inquiry, "the decision to have a focal point really does date right from the early days of the Commission".[96] The main milestones on the road to the Dome's present management structure are:

June 1994: the Rt Hon Peter Brooke MP, the first Chairman of the Millennium Commission, referred to the Commission's sympathy with the idea of a Millennium Festival with an Exhibition as its centrepiece;[97]

Spring 1995: the Commission began selecting an operator and a site for the Exhibition, referring to its vision of a "showpiece celebration, and ... lasting legacy";[98]

January 1996: Imagination Group Limited was selected as the preferred operator, and the National Exhibition Centre in Birmingham and Greenwich were short-listed as sites;

February 1996: the Millennium Commission selected the Greenwich site;

August 1996: the Millennium Commission supported the proposal for a Dome as the main site for the Exhibition;

January-February 1997: responsibility for the operation of the Exhibition was assumed by a new public-sector operating company (subsequently called NMEC) with Ms Page as Chief Executive and a Minister as sole shareholder[99];

May-June 1997: incoming Government conducted review of the project and confirmed it; Company's share transferred to Mr Peter Mandelson MP, Minister without Portfolio;

July-September 1997: Board and management team augmented by new members;

December 1998: Company's share transferred to Lord Falconer, Minister of State, Cabinet Office;

February 2000: Mr Gerbeau replaced Ms Page as Chief Executive of NMEC;

May 2000: Mr Quarmby replaced Mr Robert Ayling as Chairman of NMEC's Board.

32. Following a proposal by the previous Government, the Millennium Commission established a public-sector company to run the Dome and what later became termed "the Millennium Experience" at Greenwich. This Committee supported that decision in December 1997. Indeed, we concluded "it is open to question whether it should have been necessary to pursue the mirage of private sector leadership for so long".[100]

33. Public-sector leadership became unavoidable following the selection of the Greenwich site. The main rival to Greenwich had been the National Exhibition Centre in Birmingham, which had the advantage of a clean site, transport links and an established operating company. Greenwich was the riskier option despite the advantage of an iconic association with time and the prime meridian. The north Greenwich site was hampered by negligible transport infrastructure and extensive contamination. Greenwich was selected largely because it offered the Commission an opportunity to provide environmental and economic regeneration.[101]

34. The delivery of a Millennium Exhibition at Greenwich thus became a regeneration exercise linked to or dependent upon the decontamination of the site, construction of transport infrastructure and consideration of the wider economic regeneration of the Thames Gateway. In 1997, Mr Heseltine told us: "I could see no way in which I could have recommended to anybody that you should see this as a commercial venture. It is not a commercial venture".[102] Mr Quarmby confirmed that the Millennium Dome was not "conceived as a viable commercial business".[103] Indeed, he said that a commercial business would not have become involved in such a regeneration project.[104] Ms Page told us that "it was clear in the middle of 1996 that the Commission's ... hope ... that there would be a private sector, properly-constituted consortium or individual company that was capable of taking on the business of running the Experience ... was just not going to be satisfied".[105] Lord Falconer said that "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".[106]

35. The demands and risks associated with the project were such that no private operator would ever have taken them on. The concept of time was intended to be the theme of the Millennium Experience, but is perhaps more salient in explaining the nature of the project management and delivery than as a theme of the Experience. First, the Dome was faced with an immovable deadline for opening—31 December 1999—and thus engaged in a highly risky "race against time".[107] Second, the project was intended to be time limited. It was assumed throughout the project that the Millennium Experience would run for only one year.[108] That time limit was always incompatible with a full commercial return on the investment.

36. From the beginning the project was political. The stimulus came from politicians, not the commercial or business sector. As Ms Page put it: "There is no doubt in my mind that the project has been seen as political almost from its inception".[109] Both before and after the General Election of May 1997, the decision-making process was intertwined with politics. According to Ms Page, the early period of development was "extremely difficult until such time as the new Government came and did its review and agreed that it would go forward".[110] Political interest in the project intensified once the new Government decided to back the previous Government's decision.

37. As Ms Page said "There was a general belief that an incoming Labour Government would reshape or reject the exhibition; this meant hold-ups in two key areas—discussions with sponsors and recruitment of staff".[111] Furthermore, disagreement between senior members of the Government as to the future of the project on gaining office caused further uncertainty. As Mr Smith told us: "I had recommended that we should perhaps go ahead with something which was rather smaller and more educationally focused than we ended up with".[112]

38. The management structure devised in late 1996 and early 1997—which we subsequently endorsed—was influenced by political considerations. Both the project structure and political involvement were justified by the extent of the commitment of National Lottery money to the project. The Dome dwarfs all other projects funded by the Millennium Commission or other Lottery distributing bodies in terms of scale of commitment. That was true from an early stage and is even more so in the light of the additional grants awarded by the Millennium Commission during the year 2000. It is quite proper that expenditure on that scale should be subject to political examination and accountability. The level of Parliamentary scrutiny was summarised in the most recent Annual Report in which it stated that more than 1,000 questions on the Dome have been asked in Parliament, and that this Committee had by then undertaken four inquiries into the Dome.[113] Lord Falconer agreed that, as such a large amount of Lottery money had gone into the project, it was bound to be political and be scrutinised.[114]

39. Mr Quarmby said that he did not feel that NMEC was a Government organisation.[115] He set much store by the fact that the structure of NMEC replicated that of a private-sector company, with a chief executive and a board seeking "to run the Dome as a commercial business in the best way we possibly can".[116] However, with a Minister as shareholder, the obligations as a non-departmental public body and the interest aroused by the funding provided by the Millennium Commission, NMEC was a most unusual hybrid. This structure led to the absence of a clear line of responsibility for overseeing the project. As Ms Page observed, the "circumstances in which the Company was required to deliver against the aspirations of the Millennium Commission and of the Government were unique in corporate governance terms".[117]

40. Market research undertaken by the Millennium Commission confirmed that the public wanted to mark the millennium but they "did not want it to be done by the Government".[118] NMEC never came to be regarded as separate from the Government. As Ms Page acknowledged, NMEC was inevitably "always associated with the Government and usually with significant people within each Government and that is where we are and where we have been from the beginning".[119] She also told us that she made "several personal attempts to persuade Ministers that standing back from the Dome would be good for them as well as good for the Dome".[120] Lord Falconer admitted that he was one of the Ministers to receive this advice, but said that "I make absolutely no attempt to run, or interfere in the running of, the Dome".[121] Nevertheless, Lord Falconer attends meetings of the Board of NMEC and receives all Board papers.[122]

41. Lord Falconer also confirmed that he held regular Monday morning meetings with Mr Ayling, Mr Grade and occasionally Mr Chisholm. Ms Page was not invited to these meetings.[123]

42. There is a lack of clarity as to the potential liability of the Board, collectively or individually, for the Dome's financial losses. Lord Falconer told us that the Board had not requested any form of guarantee and confirmed that they were indemnified against any personal liability. However, he gave no such assurance as to the Board's collective liability.[124]

43. From the start, in 1996, the separation between politicians and what became NMEC was never clearly established by either Government, which affected perceptions of the Millennium Dome as a visitor attraction. It has also meant that we have found it exceptionally difficult to disentangle the responsibilities of the various parties involved in the Millennium Experience. This may perhaps have been one of the intentions of those involved, but it must also be acknowledged that political involvement was integral to the project from its very inception.


95  HC (1997-98) 340-I, paras 3-15. Back

96  Q 35. Back

97  Evidence, p 130; HC (1997-98) 340-II, pp 1, 30. Back

98  HC (1997-98) 340-II, p 36. Back

99  HC (1997-98) 340-I, paras 2-8, 12-13. Back

100  Ibid, para 8. Back

101  HC (1997-98) 340-II, pp 16, 36-39. Back

102  Ibid, Q 8. Back

103  Q 237. Back

104  Ibid. Back

105  Q 23. Back

106  Q 318. Back

107  HC (1997-98) 340-I, para 1. Back

108  HC (1997-98) 340-II, Q 341. Back

109  Q 34. Back

110  Q 2. Back

111  The Millennium Dome: Speech by Ms Jennie Page to the Royal Society of Arts, 3 May 2000 (hereafter RSA speech). Back

112  Q 477. Back

113  The New Millennium Experience Company Ltd, Annual Report and Financial Statements for the period ended 31 December 1999 (hereafter Annual Report 1999), p 2. Back

114  Q 320. Back

115  Q 190. Back

116  Ibid. Back

117  Q 3. Back

118  Q 34. Back

119  Q 34. Back

120  Q 53. Back

121  QQ 316, 383. Back

122  QQ 343-344. Back

123  QQ 345-352. Back

124  QQ 330-332. Back


 
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