Select Committee on Culture, Media and Sport Minutes of Evidence

Examination of Witnesses (Questions 140 - 159)



  140. Can I ask what you think about the dates for Picketts Lock? Is it going to be ready or is it not? Whilst you answer that can I ask about Crystal Palace? What is going to happen to Crystal Palace?
  (Ms Simmonds) If I could pick up on that. We had one feasibility study on Picketts Lock, and we have another feasibility study which is expected to report back in May of this year. Once that feasibility study has been looked at and assessed by the Lottery Panel along the lines of our usual criteria, which is to look at financial need, eligibility, and value for money, then a decision will be made to take that project forward (hopefully) and then it will go on to its building stage. With regard to Crystal Palace, they came forward with a project some time ago then got delayed because of the decision about whether it would or would not host the World Athletics Championships. We are now talking to Crystal Palace about a scheme which will be for the English Institute of Sport with very much a regional facility with local use, community use, with around £21 million, and the Lottery Panel has given it "in principle" support and we are now discussing with Bromley, and the other local authorities involved there, partnership funding.
  (Mr Brooking) I think the important thing to remember on the feasibility study is that since the Picketts Lock project has come to light there has been a huge conflict of viewpoints and there are a number of conditions we want to emerge from the feasibility study, and one concerns athletics itself. Wherever I travel around the country you get completely different verdicts of what they think, whether Picketts Lock should happen, whether it should have the World Athletics Championships and what that will mean to the regions. Although David, as UK Athletics, is saying he thinks it is a good idea, lots of other areas of athletics have different viewpoints. We have to get unity from the governing body itself to make sure that is clarified. Certainly funding and the funding gap is an issue. How will that be achieved? Quality is a key factor because again if there is a World Athletics Championship at Picketts Lock, we want to go there and feel very proud of the facility. We do not want to go with our cloaks over our heads embarrassed because of the quality of the facility. So quality is another issue, so is viability, value for money, revenue funding, all of those are conditions which we need to get clarified so that we can come to a decision. When it eventually comes to the Lottery Panel it is all those issues they have got to decide on as to whether they give it support.

  141. Even at this stage you have got to draw the feasibility studies together, then it has got to get planning permission and that could be six to 12 months and could really delay it.
  (Ms Simmonds) The feasibility study will take it to RBIA stage C which means you will have outline planning permission at that stage. That will happen before the results come back to us as a Panel.

Derek Wyatt

  142. I have had a letter from the British Wheelchair Sports Foundation, the Stoke Mandeville people, and I am going to give it to the Prime Minister this afternoon. They have had to close the centre at Stoke Mandeville and if we are not very careful the £9 million project to build a world centre for the Disabled Games might not happen. Could you take this back with you and have a look at this as a matter of great urgency? Since we did so well in Sydney it seems a shame that the administration of Sport England and the Lottery are making it a very difficult case for us. But that is an aside. Mr Bates has supplied us with minutes and letters of everything he has had to do with the Wembley thing this morning so we have been rapidly reading it whilst talking to you. There is a comment here, Friday 20 September 1998, which says that the Sports Council was trying to set up a Trust and the Trust would raise money to complete this stadium on the back of an FA covenant which is the basis for the Wembley bid. Which set of advisers said that the Trust was the best way forward? Which banks or which Ministers did you talk to? How did you decide the Trust was the best way?
  (Ms Simmonds) Can I pick up on Stoke Mandeville firstly because it has come before the Lottery Panel on a number of different occasions? I think I must declare an interest in this because my own organisation, Business in Sport and Leisure, has raised £200,000 for Stoke Mandeville and the new sports facilities there, and that is part of the partnership contribution. We are waiting for it to come back to the Panel for its final assessment but we have given a very clear "in principle" decision that it is a project that we want to fund.

  143. I sit on the appeal committee but I tell you you could do much more. You are doing a disservice to our wheelchair people and I will happily talk to you afterwards. Can we come back to the Wembley part?
  (Mr Casey) I would like first of all to correct the statement Mr Bates made because I have not been party to—

  144. This is an official minute of a meeting.
  (Mr Casey) Perhaps we need to go back to the original applicants for the Wembley project. The original applicants were a consortium which was made up of the three sports which we have discussed this morning—Brent Council, Wembley plc, and their project vehicle to take this forward was a trust. The trust, in terms of revenue support for the project, was relying on its income coming from the football matches at Wembley in the same way. I think, as Mr Bates then went on to say, when he came into the project it was felt that it would be better if there was a closer working relationship between the Wembley development and the Football Association. At that point WNSL was established to become the project vehicle for the development at Wembley.

  145. Let me ask the question again, the same question really. What advice did you take on whether the Trust was the best way forward?
  (Mr Casey) We did take advice at that point.

  146. Can you tell us who you took it from?
  (Mr Casey) We took financial advice from consultants and we took legal advice on the project as well, in the same way as when WNSL was established we took financial and legal advice about the change of project vehicle, and the decision to accept a change of project vehicle clearly was accepted by the Sports Council and it became the current project vehicle which we have seen in place for the last two or three years.

  147. Can we move on to Manchester which is the largest sporting occasion we have ever hosted? There is an overspend on the stadium. Is it true that the contractors are being paid bit by bit, that the money is being released and as they complete something, we pay them. Is the contractor on a fixed price contract? Can you tell us what is going on?
  (Mr Casey) Again, if I can paint the background to Manchester, I think in terms of the operation of the Games we can divide it into two sections: one is the provision of facilities for the Games, and then there is the operation of the Games themselves—the running of the event in summer 2002. With the agreement of Manchester City Council we have concentrated on the provision of support for the facilities for the Games which includes those on the Eastlands site and elsewhere. The responsibility for operating the Games themselves rests with the City Council and its sub-committees. As far as the contracts between ourselves and Manchester City are concerned, then, rather like any other project which is supported by Lottery funding, there is a capped grant. There was a capped grant for the swimming pool and there is a capped grant for the stadium and all the other facilities in Manchester: therefore, if there is a cost overrun, again that is the responsibility of the City Council and I am sure that is a point you might want to put to the City Council.

  148. Do you say to them it should be a fixed contract in your recommendations?
  (Mr Casey) I have to say it varies according to the building project itself. I think that what has been a tendency in the past is not necessarily a design and build contract, which we have seen have difficulties in the past, but sometimes they go for guaranteed maximum price contracts which sometimes include an element of contingency in them so that if there is a cost overrun there is a ceiling between the actual cost and the availability of money. I know Manchester has had various discussions with contractors on the best way forward. As far as the Lottery grant is concerned that is capped and Manchester are aware of that position.

  149. It was clear to us within about 20 minutes when we were at Wembley that we needed to abort the whole place and not just the small perimeter, but we have lost that opportunity. The Millennium Stadium on Sunday was frankly a disgrace getting in and out and at the station there were no extra trains put on and the poor people from Birmingham and Liverpool were kept for six to eight hours. When you talk to the people in Cardiff they say, "That is the DETR, that is the Welsh Office": it is never the sport. So we have a problem here because we are delivering the facility but we are not delivering the infrastructure because a) we do not have the money or b) we do not have the authority. In your own thinking about future strategies do you hold with the idea that there should be a single Minister at Cabinet level and that there should be a single Department with a proper budget for infrastructure?
  (Mr Casey) If I can pick up several points, Mr Wyatt. First of all, if I can perhaps go back to Manchester for a second, clearly one of the exciting bits of the Manchester project is what the stadium and the Sportscity project in Manchester are going to do for the people and city of Manchester. There is a goodwill system there. I understand that there will be an extension of the Metro tram line in due course, and that is great. On the back of that you will see commercial developments going into that site, and 5,500 jobs being created. I think in a sense there is a good model of what can happen in terms of (a) of facilities and (b) holding a major event. As far as Wembley is concerned, we always knew that the size of that project would act as a catalyst for further investment, and that was going to come through the Wembley Task Force. Our understanding is that about £100 million extra has been generated through the proposed upgrading of London Underground. Again, you can see the catalyst effect of the development on that site with jobs. I have to say I was in Cardiff on Sunday and it did take some time to get home. I think a number of lessons will have been learned about traffic flows in Cardiff and encouraging people to come by public transport and, hopefully, there will be more public transport when there is a major game there. I think that we are learning lessons from transport issues in these major projects. As far as Government is concerned, and whether there needs to be more co-ordination, I think we have seen the advantages of co-ordinating Government departments with the appointment of Ian McCartney as the Minister for the Commonwealth Games. If money sits inside Government, or sits outside Government, I am sure that they would be asking the same questions that we have about investment in these sorts of projects, or at least they should be asking these questions with the same constraints and the same responsibilities put on the applicant for the issues that they have applied for in the first place.

  Derek Wyatt: I certainly did not notice that.

Mr Faber

  150. I do not know if you have had a chance to read the Secretary of State's evidence to us three weeks ago when he appeared before us on the National Lottery. He gave a ringing endorsement to the arm's length principle and the concept that Sport England should be the distributing body, but his language interspersed in there was strongly encouraging you as Sport England to ensure that Picketts Lock would get the money for the scheme. He kept referring to an "in principle" agreement, which you have referred to this morning in terms of Stoke Mandeville. Just how much pressure are you under from politicians to come up with the funds?
  (Ms Simmonds) Can I say as a member of the Lottery Panel—I have been a member of the Lottery Panel for six years, since it started—we are a very independent group, there are about 20 of us, we come from a range of disciplines, backgrounds, of sports. We have sports people like Garth Crooks, Verona Elder, Steve Cram, Anita Lonsbrough, who sit on that panel. We are very independent. There is a difference between an "in principle" decision and an allocation in the budget. For Picketts Lock we have allocated prudently £20 million from the—

  151. Can I stop you right there? Are you saying that an allocation in the budget is a lower level of agreement than the "in principle" decision you have given to Stoke Mandeville?
  (Ms Simmonds) Yes, I am saying that.

  152. So the Secretary of State's remarks continually that you have an "in principle" agreement with Picketts Lock is incorrect?
  (Ms Simmonds) His understanding of the words "in principle" may be different from the way that the Lottery Panel interprets it. The Secretary of State has not been at our meetings when we have made those decisions. We do not feel under any pressure from the Secretary of State to be anything other than we are, which is independent. We have allocated £20 million from the World Class Performance Plan and £20 million from the Community Fund and we have talked about £20 million coming back from the FA, which would make up the £60 million. It is very important to know that 75 per cent of funds from the Lottery go to community projects. We have had 9,000 applications, we have funded about 3,500 projects, we have spent over one billion pounds, and it is exactly the sort of things at Stoke Mandeville that we would not be able to fund if we put more money into Picketts Lock or other facilities like that. That has been our position and we would be happy to make that very clear to the Secretary of State.

  153. So you will abide by your criteria absolutely rigorously?
  (Ms Simmonds) Absolutely.
  (Mr Brooking) We have made that very clear to the Secretary of State.

  154. That is excellent. You have just identified the two areas where the £40 million will come from. Are you concerned about how the £40 million was arrived at in the first place, namely the supposed cost of (a) the platform and (b) the most expensive variety of warm-up track?
  (Ms Simmonds) I think Trevor looked at that figure before. There are lots of arguments you could have about the platform. I remember last year, when we came before you, that the architect, Rod Sheard, made it clear that they had not actually done a lot of development work on platform ideas and he certainly thought its cost could have been less in the longer term, but we made those allocations in our budget.

  155. The third tranche of £20 million is the controversial one, the one you are still seeking back from the FA/WNSL. How are negotiations progressing there? What is your involvement in the negotiations?
  (Mr Casey) Clearly as you asked earlier, that was essentially an agreement between the Secretary of State and Ken Bates and subsequently the Football Association.

  156. You had no initial involvement in that decision at all?
  (Mr Casey) I think that was reflected in last year's report. Since then we have had discussions with the Football Association and WNSL about the return of that £20 million against that agreement. As I think you heard this morning from Sir Rodney Walker, that lies with the Football Association and WNSL and, again, I was encouraged to hear that he expects that £20 million will be returned. I anticipate that will start to be returned at the time that they sign up with the banks.

  157. You would hope that it would be returned, as the Secretary of State suggests it should be, backdated to the original proposal? The way WNSL clearly see it is that it will start as at the first agreement and will then be repaid in tranches from there. It is quite an important difference because it is about six or seven million pounds that has already slipped.
  (Mr Casey) I would be happy to provide the details on this but, from memory, the agreement with the Secretary of State was that it would be paid over five tranches starting in December 2000. It has slipped, but it has slipped by about two or three months, and obviously in the context of the discussions by WNSL and the banks that may be understandable in that sort of timescale. I will be very happy to make sure that is the right information.

Mr Maxton

  158. Why should professional football receive any public money, certainly at the top when they receive enormous sums of money through television rights and they spend that money on producing football teams and there is certainly one example where there is not one single English player who goes on the field at the beginning of the match? What encouragement is that for youngsters in this country to play the game?
  (Mr Casey) Perhaps I will leave my Chairman to talk about football in more detail. I remember that we had a similar conversation last year on this particular point. I think you can divide football into almost three groups. One is the Football Association with responsibility overall, and particularly for grass roots development, another is the Premier League, which clearly has got a better financial base than other sports and other clubs, and the third is the rest of the football clubs who, as we have seen in the papers in the last few weeks, are hardly well off in many respects. Our relationship is very much with the Football Association and, in due course, instead of the profits from Wembley going into Wembley plc as before, as we heard from Bob Stubbs, they will go into the Football Association but, of course, the nature of the Football Association is such that that money will ultimately go into grass roots football. In a sense, therefore, the investment in Wembley is not just to build a major stadium, not just to get a regeneration of Brent, but in the longer term is actually to provide a great deal of support for grass roots football through football itself. It does mean that our funding can be concentrated on other sports which greatly need that support for facilities as well.
  (Mr Brooking) We have persuaded football to top slice five per cent. I am a Board member of the Football Foundation which will be putting money into grass roots football over the next few years with the new satellite money deal. Let us go back to when you were talking about football. The national stadium was for three sports and it took three or four years to get to July 1999. At the Lottery Panel, and Brigid will know because I was the Vice-Chairman sitting on that, we defended athletics and protected it very strongly because we wanted them to be involved. When it was originally envisaged I think an athletics track of some sort was the idea but when the event usage became clear and there was going to be only one, possibly two, events in 20 years, that was when we had to come to a different design stage. Everybody was on board in the summer of 1999. Whether it was a change of the Minister or the BOA looking at how we got from 67,000 to 80,000, the Ellerbe Becket report came out and possibly one of the problems—everybody has mentioned time and the pace of decisions—was that I think the design team and ourselves would have liked to have been involved in the discussions before athletics was withdrawn. Two key decisions were made then and we were not involved in those—a) the £20 million was taken out and b) athletics decided to change their mind and wanted a stand-alone stadium for the World Athletics Championships, and so it has moved on from there.

  159. When do you reasonably think that this country has any chance of bidding for the Olympic Games?
  (Mr Casey) Usually, as you know Mr Maxton, there is a feasibility report, and that has been done by the British Olympic Association and we hope to receive that report soon and start discussions with the British Olympic Association. I think what we will be interested in at that point is two things. One is the question of the sports facilities required for the Olympic Games—I am assuming they are sticking to London—and the range of facilities which are already in London, and the range of facilities that is required. In looking at the feasibility study it is as important, if not much more important, to look at the infrastructure that is needed for an Olympics bid in this city, as we saw in Barcelona and Atlanta and Sydney, and indeed the cost of the sports facility is a relatively small percentage of the overall cost of the Games, and therefore I think it has to be seen as a package.

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