Select Committee on Culture, Media and Sport Minutes of Evidence

Examination of Witnesses (Questions 387 - 399)




  387. This is only the fourth time in the four years of the existence of this Select Committee that we have had hearing sessions outside Westminster and it is entirely appropriate that two of those times have been here in this City of Manchester. We would like to thank Manchester City Council for all the arrangements they have made and we would like to thank all involved for making it possible for us to see some of the Commonwealth Games sites yesterday. We would like to thank the Minister, Mr McCartney, for being present here today with his colleagues. There are other people who might regard a venture to Manchester as being a bit of a safari but Mr McCartney will agree with me that Manchester is the centre of the universe, and that being so, it is quite appropriate we should be here. Before we begin I would like to make one point of a good deal of conceit and self-regard, only one at the moment, maybe more later, and that is that we, on the Select Committee, feel some responsibility for the fact that we have Mr McCartney and his colleagues here today because it was as a result of a recommendation that we made in a report almost exactly two years ago that the Prime Minister decided to make that appointment and the structure that Mr McCartney then constructed followed from that. It is very satisfactory that structure is working closely with Manchester City Council who have co-operated very closely with Mr McCartney, Mr Allen, Frances Done and their team. I understand that before we start the questioning Mr McCartney would like to make a brief statement.

  (Mr McCartney) Yes, thank you, Mr Kaufman, and thanks to the Committee for inviting me. Before I make the statement could I make one or two points of clarification. I think the epicentre of the universe is actually Makerfield, which is slightly 15 miles from the centre of Manchester but for the purposes of getting on to the Committee this morning—

  388. I do not want to call you to order too soon.  (Mr McCartney) I would like to thank the Committee for getting me this job which was very helpful of you at the time. I hope I can live up to your expectations. I am absolutely sure that after today's meeting, because it is an ongoing event, you may wish to talk to me later in the year and I offer that facility and indeed during the 500 days—or 492 days—left as we move from the planning to the implementation stage I make the genuine offer to be as closely involved as the members of the Committee wish to be involved in terms of the planning for the successful outcome. The short statement is simply this. The ultimate financial responsibility for the Games is Manchester City Council's. There has been no suggestion from them that they should be relieved of that responsibility and to be fair to the City Council, the question is not expected to be raised with the Government. The public has already contributed substantially to the Games through Lottery money and other grants. The Prime Minster and other Ministers have worked hard at encouraging sponsorship. Though the Games' organisers have always made it clear that their revenue targets were ambitious, all of us who are on the team—and I mean all of us—will be disappointed if we cannot meet them. As we move from the planning to the implementation phase, what we call the last 500 days' strategy, the Government remains absolutely keen to see the Games succeed and we will continue to work closely with the Games' organisers, Manchester City Council and other agencies, to help ensure that the Games do come off in a successful way. We have set up a new Cabinet Sub-Committee being chaired by the Home Secretary, Jack Straw, to support me in co-ordinating Government support to the Games. Robert Raine, on my left, will lead the Commonwealth Games team for central Government, again under my leadership. Our dialogue with Manchester is continuous. We are working with Manchester on an examination of the Games' finances and the associated costs of infrastructure development. When this has been done the City Council will consider the effects locally of any revised figures and we shall again review the position. We are conscious of the need to make early progress in these matters and we expect the Select Committee again to take a close interest. We welcome your views on matters relating to the last 500 days and how we can use Government help to ensure the success of the Games.

  Chairman: Thank you very much, Minister. Mr Fearn.

Mr Fearn

  389. Good morning. You mentioned there finance and that is one of the concerns that I have. In 1999 we were told that Manchester City Council would invest over £20 million in facilities for the Games. You state now that the total capital contribution by the Council is £40.75 million so that has doubled. How much further is it going to go?  (Mr McCartney) I think what we are seeing—and I do not think anyone would disagree with this—over the process, first of all from the moment when Manchester succeeded in getting the contract to establish the Commonwealth Games, there have been a range of phases. The first phase, of course, was to secure all of the infrastructure and that has been done. It has been largely within time and within budget. That is I think a significant feather in the cap of Manchester and the organisers. Government, through various guises, have provided the capital resources for that, both the previous Government and this Government. As we move from the planning phase into the implementation phase, it is of critical importance that one of the major reviews is the financial position. One, we need to ensure that the capital investment has been completed, consider any problems relating to that, and how to resolve them. Issues around renewed Government input, what more the Government needs to do to secure the success of the Games. We also need to consider planning for logistics like police, fire, transport, health; the volunteers programme; the Baton Relay. At this phase we are looking at all of the aspects of the strategy to ensure that firstly the strategy is right and secondly are there any areas we need to improve and if there are what are the options for improving and that includes whether we need to put further resources in.

  Mr Fearn: I am thinking really of the Council taxpayers in Manchester themselves who have seen this figure now, £20 million rise to £40 million. I have looked at the sponsorship. On the sponsorship, you were hoping for £50 million and so far £30 million is secure. I think even from the £30 million a big lump comes from people like Manchester Airport for instance so it comes from Manchester anyway. How are we going to get more sponsorship?


  390. Can I just intervene a moment to say that if any of the other witnesses feel that they would like to answer questions, of course they are very welcome to do so.  (Mr McCartney) I was going to invite Richard to do the specifics of Manchester's budget because that is fortunately his responsibility not mine. On the sponsorship, again Charles Allen may want to say a bit. I hear a lot of knocking of sponsorship in Manchester by people and I get pretty fed up with the knocking. I do not mean the hon gentlemen but outside in the media. The fact is yes the sponsorship targets are ambitious—very ambitious—but unless you have got ambition you cannot organise the biggest event ever organised in Britain. If you have not got ambition you cannot go into some of the big blue chip companies and sell their involvement in this. So far, despite all the knocking, we have succeeded in getting the biggest sponsorship for a sporting event in the United Kingdom. That is the benefit and the sponsorship continues. As it continues the other thing it will move from is not just concentrating on the planning; we need to concentrate in the last 500 days on making sure the Games are implemented in a successful way. So the balance between continually looking for sponsorship and making sure we are concentrating on implementing the plan, I think we have got it right. This review will tell us if we have not got it right and we will make the adjustments.  (Councillor Leese) Could I comment first of all on the capital costs. We are not comparing like with like, we are comparing £40 million now with £20 million in 1999. We can provide, of course, the Committee with the revised schedule of what is included in that cost. Some of the headline figures, for example £40 million includes a £10.4 million contribution to the Convention Centre which is a facility which will be used for the Commonwealth Games but is not being built solely for the Commonwealth Games. The £40 million figure will also include contributions to facilities like the hockey, which in 1999 was not planned to be in Manchester but will now be in Manchester and will provide us with an on-going facility for the City and the region that we previously would not have had. Again, I think if we see a full schedule of where the capital contribution is you will see that by and large it is because it is facilities that are not specifically for the Games or for new facilities that we will get. The only area where I think there is an increased budgetary cost to the City Council is that we increased the budget for the stadium by £4 million but over a two year period that is a relatively small margin on such a large capital project. In terms of other costs and particularly the cost on the council taxpayer, Manchester has given a commitment previously that the council taxpayers will not pay either through increases in their council tax or reductions in services. Our council tax increase this year was 2.16 per cent and we are only one of two metropolitan authorities to have a council tax increase lower than the rate of inflation, and I think that includes the local authority which your constituency is within, and that shows we are a prudent manager of our budgets. As previously said to the Committee about how we will effectively mitigate against risk, we will over a period of time put reserves aside and we will generate those reserves from a number of sources, not least from the capital receipts we will get from commercial development around the Sportcity site, and of course that value is only there because of the investment that is going from the public sector.

Mr Fearn

  391. From what we have seen so far and from what we saw from the hole in the ground, as it were, things have made great strides and you are to be congratulated. You again there touched on the risk which there may be and are putting something aside in the future or during the next couple of years probably, but should not the Government underwrite the whole scheme? It is such a big scheme, the biggest we have ever had in this country for sport. Perhaps the Minister could say—or can he not say—that the Treasury are behind him?  (Mr McCartney) If I cannot answer a question, I will tell you I cannot. In 1995 when the original agreement was signed—and I am not saying this in a partisan way—the then Government signed with Manchester City Council an agreement that Manchester would underwrite the costs and accept any overrun costs, and that was reconfirmed in 1998. What has happened since 1998 is that the Government has become far more engaged in support of this project. Hopefully, after the completion of it successfully next year, one of the things the Committee and perhaps Government needs to return to is just how we as a country plan both for how we seek out in a global situation large scale sporting events, because they are globalised now; and secondly what does each of the partners bring to the planning and implementation of them. There will be a role for the public sector, there is a role for partnership with the private sector through sponsorship, and there is obviously a role on the ground, for the community, where these events should be placed. In the past it has been a pretty hands-off relationship but it is not now. We have got a really good strong partnership and this partnership will deliver next year the best and biggest sporting event ever organised in the United Kingdom.

Mr Fraser

  392. You talk about the commitment of the City Council and the point has been made about council tax and the financial implications. What consultation have you undertaken with the ratepayers of Manchester and Greater Manchester as a whole about your commitment for these Games?  (Councillor Leese) We go through a process of consultation about our budgets every year with the public of Manchester, with the business community and other people who are interested in our financial affairs. Our commitment to the Commonwealth Games is as I have described and that clearly has been part of that budget consultation. The response of the citizens of Manchester to the Commonwealth Games has been overwhelmingly supportive because they can, particularly now, visibly see the benefits which will come to the City in terms of raising the international profile, the education and sports legacy and, more specifically, the regeneration legacy, and that is a legacy which is not simply one for the City but is one for the whole of the North West of England and indeed a legacy for the country as a whole.

  393. Can you expand slightly on the issue of regeneration and the forecasts about what you will be doing afterwards?  (Councillor Leese) Within the East Manchester area, which is where the Sportcity is located, the permanent jobs which will be created around that development—and we are talking about over 3,000 permanent jobs on that site alone—will be the centrepiece of the very much needed regeneration of East Manchester, which ranks as one of the most deprived areas anywhere in the country. The Commonwealth Games and the Sportcity development gave the impetus for proposals to be made under the New Deal for Communities which have provided a regeneration scheme in the adjacent area of some £50 million over ten years and for a single regeneration budget proposal for the wider East Manchester area, which is providing some £25 million over seven years. There are other programmes operating within that area including an Education Action Zone, a Health Action Zone, a Sure Start programme, the Millennium Communities programme as it has been renamed and the Ancoats Urban Village initiative, all of which will bring substantial public and private resources into the City, and of course, the Metrolink will be going through the middle of the site from around 2005. All of that is being co-ordinated jointly between the City Council, the community, English Partnerships and the North West Development Agency through the new East Manchester Urban Regeneration Company. But I think the Commonwealth Games and Sportcity for East Manchester has provided the catalyst for one of the most needed but also the most comprehensive regeneration programmes this country will ever have seen.  (Mr McCartney) Last week I came to Manchester to launch just south of the stadium a project to wire up into 4,000 homes access to services run by the Council, the Government, including 24 hour access to police, providing training and free access to the Net for the residents of one of the most hard-pressed parts of Manchester. So we are making all these links. We are getting not just value for money in terms of the investment needed to secure the Games as a success, but what happens afterwards is important. Not all big sporting events across the world actually think through what happens afterwards and that is the important bonus here. All of us, the private sector, the Government, the City, have a long-term strategy so the Games are at the centre of delivering the sporting event but out of that there are major new investments in the City of Manchester and in the wider region.

  394. We have been given what I consider to be an extremely impressive document which I read last night, the Sydney Experience, about the Olympic Games which clearly were a great success. Would it not be more appropriate perhaps to have some more home-grown British experience like the Dome and learn from that experience?  (Mr McCartney) It is a clever point politically but the Dome has got nothing to do with the organisation of an event which spans 72 countries, 17 sports, a whole range of new infrastructure projects and, in addition, causes a lot of structures to be put in place for transport, policing, for VIPs coming from across the globe in the same year as the Queen's Jubilee. It is a different type of event, a different scale of organisation and a far more complex set of issues to be resolved. From my point of view, these have been resolved so far in a very effective way and will continue to be so. So you are not comparing like with like. The Dome is the Dome, you can have your view of it, but, please, let us concentrate on delivering the Commonwealth Games here, which is my job.

  395. One is not denying you are trying to do that but I put the point to you because there were great aspirations for that which, unfortunately, were not realised and the press have made a great deal of it. Finally, what are the lessons which have been learned by you from the Olympics as outlined in this particular document?  (Mr McCartney) The logistics I will leave to the team, because a lot of the document is on logistics. To be absolutely frank, what we have learned as a Government is the more you get involved in a partnership, the more transparent the relationship, the more the Government are prepared to engage, the better the outcome. That is the lesson we have learned. The other lessons are, one, unless there is in the final phase a complete concentration on delivery, then the Games in the last 500 days could falter, and what they have learnt from Sydney is a complete focus on the final 500 days is vital. Secondly, despite everyone saying these were going to be the worst Games in history, there was a constant daily barrage of bad press and negative press about Sydney, but the team concentrated its efforts. That is another lesson we will learn, despite negativity in the press we are focused on delivering the best Games. Those were the two lessons from the Government perspective we have learnt.  (Mr Allen) I think from a managerial perspective Sydney showed that it was the partnership that really delivered and had the Government working hand in hand with the organising committee and that has really helped the whole thing. At a very practical level one of the key things which made Sydney very successful were the volunteers and we will have the largest volunteer programme ever in Britain. I think a lot of lessons were learned in how to recruit people, how to bring them on board and how to engage them. The other thing that we learned was not only lessons which we learned when we were there. What we have done is bring some 25 people from Sydney to work with us so we are using the expertise in creating a multi-sport event in Sydney and using that experience here. I think it was practical in terms of looking at what happened on the ground and then bringing in the people who actually delivered it. I think across all the ranges, from accommodation through to transportation we have learned a lot of lessons on how to do it so it was a very useful experience.

Mr Maxton

  396. The BBC are your broadcasters on this. Can you perhaps describe to us exactly what the deal is, I do not mean in direct financial terms but how important it is in terms of your financing the Games? Did you select the BBC because you wanted a terrestrial broadcaster or were they the broadcaster who would give you the money? How dependent is the money you get on the BBC selling on the rights to other broadcasters, presumably in the Commonwealth?  (Mr Allen) I am slightly conflicted I suppose as the Chairman of Granada but I am sure the BBC will do a fantastic job. Basically the deal itself with the BBC is they are the host broadcasters and provide the infrastructure and the feed around the world. In terms of the financial deal effectively the organising committee then sells the rights so the BBC does not go out and then sell on the rights. They have rights for the UK but they provide all the broadcasters around the world with the content, with the feed. We have a good relationship with the BBC, they have put a lot of resources behind it. I think they see the opportunity to make this a very exciting Games. I think the other thing which is reflected in the whole Spirit of Friendship Festival is making it more than just 11 days of sport. It is about the build up, it is about how we are structuring it and we have a very close relationship with the BBC in terms of doing that. Let me turn to Frances in terms of picking up any detailed points.  (Ms Done) Yes. Just to make the point that the actual commitment of the BBC is 129 hours of free-to-air transmission on BBC1 or 2 between seven o'clock in the morning and 11.30 pm. So that is very extensive coverage and means that the impact will be felt right across the country. They are required to show the finals of all the events live for the majority of sports and for certain other sports then some of the finals will be shown. There will be a huge range of sport, given that we have 17 sports, 14 individual and three team sports. There will be a feast of sport really during that ten day period. One thing I think we should not forget is that by having the BBC as the host broadcaster what we have achieved, of course, is that in our discussions with rights' holders and potential rights' holders there has never been any question about the quality of the picture and the feed that will be given. I think from our point of view the relationship with the BBC is fundamental to the success of the Games.

  397. Two points following on from that. Firstly, what other rights have been sold then and how important are they and also the other ones that have not yet been sold into other countries to the final financing? Secondly, while we all accept the BBC is a superb broadcaster and will do a great job on this, the fact is that they do not have a sports channel, Sky do. Can the BBC sell on to Sky, if you like, some of the minority sport events, not the finals but the other parts of them, to be shown on the sport channels? If they can, are you actively encouraging them to do so?  (Ms Done) Shall I answer in terms of the other rights' holders? We have sold the rights to Channel 7 in Australia who were hugely successful in being responsible for the Olympic Games. We have sold TV and radio rights to TV New Zealand and radio rights to Australian Broadcast Corporation. There is a deal under negotiation with Asian Broadcasting Corporation. We are in negotiation for the sale of Canadian and South African rights. In relation to the ability of the BBC to sell further rights that is within the contract with them and that is entirely a matter for them. It may well be something that they choose to do but that would not be for us to make that move.

  398. Lastly on the same area, the BBC have one of the best regarded web sites in the world on the Internet. What rights do they have to put these events on the Internet and how does this affect the deals you would then be doing with other broadcasters around the world?  (Ms Done) As I think we explained in the discussion yesterday, there is a real issue about the use of the Internet for video streaming and therefore they have no rights to do that unless we subsequently agree it. I think we discussed the difficulty in ensuring that you maximise the value from the main rights' holders, broadcast rights' holders if you allow live feed for the Games at any stage via the Internet. That is a question that is still under discussion. Those of you who are very interested in all this will know that this was a major cause of issue and controversy around the Olympics so it is a developing area.

  399. What about radio broadcasting, is that the same?  (Ms Done) The BBC have the rights to radio, they are host broadcasters.

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