Disposal and division of proceeds
114. For NMEC, the sale of the Dome has become crucial
to the Company's finances. When the Dome is sold, British Gas
is guaranteed 7.5 per cent of the proceeds, and the remainder
will be divided between NMEC and English Partnerships. The division
between those two organisations is dependent on the terms of the
winning competition bidder.[329]
Lord Falconer unrevealingly said: "The amount [of money]
that will go to English Partnerships and the amount that goes
to NMEC is based upon a reasonable division between the two".[330]
115. According to the 1997 business plan, NMEC expected
to receive £15 million from the sale of the Dome but at the
time, it was intended that the Dome would be dismantled after
the year of operation.[331]
The Company envisaged that the proceeds from the disposal of the
Dome and excess revenue from the year of operation would provide
the funds to return £50 million to the Millennium Commission.
In the 1999 Annual Report, the figure is £30 million. Mr
Smith told us that "the figure in the business plan is a
provisional sum which is in there as a reasonable stab at what
might be forthcoming from such a division of the proceeds between
English Partnerships and NMEC."[332]
This is an unusual way of describing a business plan which
has had to be rewritten so many times.
116. The sale of the Dome and the distribution of
the proceeds have become crucial elements of NMEC's financial
planning. In the notes to the financial statements for April to
December 1999, three financial targets are described—the
cost savings and visitor income agreed with the Millennium Commission
in May and the receipt of at least £30 million from the sale
of the Dome, by November 2000. The document states "there
remains significant uncertainty as to whether the additional grant
of £29 million will be sufficient. If the Company does not
achieve the above three needs and the additional grant proves
to be insufficient for the Company to meet its liabilities, the
Company will either need to seek additional funding or, if that
is not forthcoming, cease operations.[333]
117. We regard it as essential that English Partnerships
will be beneficiaries of the sale of the Dome to the extent originally
envisaged.
118. The Dome's future has been a fundamental
issue since our first inquiry. The permanence of that future has
been held up as a justification for the entire project. The timing
of the announcement of the decision has rendered it impossible
for this Committee to give full consideration to the implications
of that decision in this Report. We consider it imperative, however,
that the following four issues should be clarified:
· the overall level of the payment
by the successful bidder and the timetable for payment.
· the division of proceeds from
the sale and the rationale for that division.
· any circumstances relating to
the Government share of ongoing revenue and how such revenue would
be determined and who would benefit from it.
· any conditions attached to the
disposal of the Dome and the related site that will guarantee
the preservation of the Dome at Greenwich as an enduring symbol
of the United Kingdom at the turn of the Millennium.
329 QQ 436-440, 485-492; HC Deb, 21 June 2000, col 232W;
HL Deb, 23 June 2000, col WA 49. Back
330 Q
438. Back
331 Q
376; Annual Report 1998-99, p 5. Back
332 Q
487. Back
333 Annual
Report 1999, p 37 Back
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