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 
