House of Commons - Culture, Media and Sport

Select Committee on Culture, Media and Sport Third Report

VI. THE MANCHESTER 2002 COMMONWEALTH GAMES

The scale and importance of the Games

83. The Manchester 2002 Commonwealth Games are an event of great importance in their own right and one that is crucial to wider ambitions for staging events in this country. The Kuala Lumpur 1998 Commonwealth Games and the Sydney Olympic Games have both raised the bar in terms of the standards expected of multi-sport Games.[215] The Manchester Games face the challenge of "setting a new benchmark" in staging major international events.[216] If Manchester and the nation cannot rise to that challenge, fundamental doubts will be raised about our ability to secure and deliver the most important international events. If the Games are a great success, they could bring very significant benefits to Manchester and the North West and provide a boost to the sporting ambitions of the United Kingdom as a whole.

84. The Commonwealth Games have grown in importance in recent times and—with some 5,000 athletes and team officials from 72 competing nations across 17 sports—the Manchester Games will be the biggest Commonwealth Games ever.[217] The 2002 Games are also intended to be an inclusive event, with more sports, more countries and a higher proportion of women participants involved than ever before and an integrated programme of competition for elite athletes with disabilities.[218]

Facilities for the Games

85. One of the challenges for the organisers of the Games that we identified in our Report in 1999 is to ensure the timely delivery of facilities for the Games.[219] A number of these facilities are already complete, most notably the impressive Manchester Aquatics Centre, which was opened ahead of schedule in October 2000 and which is the only complex in the country with two fifty-metre swimming pools.[220] On the Sport City site at Eastlands in East Manchester, the City Council is seeking to develop "the finest single-site collection of sporting facilities certainly in the United Kingdom and possibly in Europe".[221] The Commonwealth Games Federation was "confident" that the sporting venues for the Games would be "excellent" and would "prove a great advertisement for Britain's ability to provide world-class sporting facilities".[222]

86. The centrepiece of the Sport City site will be the new City of Manchester Stadium, which will be used for athletics and the Opening and Closing Ceremonies of the 2002 Games. In April 1999, Sport England expected the Stadium to be completed for the Games by January 2002.[223] Both Manchester City Council and Sport England told us during the present inquiry that the Stadium remained on target for completion and "fit-out" for the Games by March 2002.[224] Mr Howard Bernstein, the Chief Executive of Manchester City Council, told us that an agreement had been finalised with Manchester City Football Club to ensure the Stadium's long-term viability after 2003 as a football venue, with certain guarantees in place relating to public benefits and community use.[225]

87. The main source of funding for the new facilities has been Sport England's Lottery Fund. Sport England's contribution has been capped at £112 million.[226] Any cost overruns are the responsibility of Manchester City Council.[227] In 1999, we were told that the Council's contribution towards facility costs would be more than £20 million.[228] The Council's total capital contribution for all facilities is now estimated to be £40.75 million.[229] Councillor Richard Leese, the Leader of Manchester City Council, said that this apparent increase largely related to additional commitments for the Convention Centre and for hockey provision and did not imply any loss of budgetary control.[230] He acknowledged that the budget for the City of Manchester Stadium had increased by £4 million, but saw such an increase as "a small margin" for such a large capital project over a two year period.[231]

Management, operations and transport

88. Since we last examined the preparations for the Games, there have been a number of changes to the organisational structures for the delivery of the Games. The roles of the two companies concerned with the organisation of the Games have been clarified and executive authority concentrated in one of those companies.[232] A new Chairman—Mr Charles Allen—and a new Chief Executive—Ms Frances Done—have been appointed.[233] As the organisers move from the planning phase towards implementation, they have realised the extent to which it is not possible to rely upon in-house staff without relevant expertise and have recruited 25 staff who were involved in the Sydney Olympic Games, a measure that should ensure that there is a good store of knowledge about the operational realities of multi-sport Games.[234] We welcome the changes made to the management of the Manchester 2002 Commonwealth Games to streamline the organisation and to broaden its expertise.

89. One of the operational challenges for that team will be the creation of a friendly, secure and comfortable Games Village at the Fallowfield site. The Commonwealth Games Federation has noted that the quality of facilities to be provided in the Games Village is variable.[235] Mr Allen acknowledged that expectations about the standard of facilities in the Village had been raised at both Kuala Lumpur and Sydney, but told us that experienced staff were confident that the right environment would be created.[236]

90. Almost as important for the success of the Games as the facilities themselves is the effectiveness of the transport system that brings people to those facilities. Mr Nick Bitel, a member of UK Sport's Major Events Steering Group submitting evidence in a personal capacity, expressed concern about the early state of plans for transport to the main sports venues at Eastlands.[237] Earlier hopes that the Metrolink extension to that part of the city would be ready in time for the Games have been frustrated.[238] The organisers plan to provide a shuttle bus service to the site on a dedicated route using the infrastructure being created for Metrolink.[239]

91. Whereas the transport authority for the Olympic Games in Sydney had statutory powers to direct other transport bodies if required, the Manchester Games organisers will rely upon the "goodwill" of a range of private operators to introduce special ticketing arrangements and respond to the additional demand outside peak hours.[240] Ms Done told us that the organisers were "planning hard to make sure that we do not gridlock the city". She said that negotiations had started to provide ticket holders with free public transport in the Greater Manchester area and she was "optimistic" that operators would find it advantageous to agree to such a proposal.[241]

92. Although public transport provision is integral to the success of the Games, the car will be the preferred mode of transport for many people travelling to Manchester for the Games. If spectators are to be discouraged from using their cars for journeys within Manchester and between venues, it is essential to put in place effective park-and-ride and park-and-walk schemes.[242] The organisers told us that work was underway to review the nature of such demand and to identify potential sites for temporary car-parking provision for use during the Games.[243]

The budget for the Games

93. In March 1999, we were told that the budget for the Games was still the subject of review, but that the likely range of the cost of the event would be between £70 million and £90 million.[244] The planned operational expenditure for the Games has now been set at £62 million.[245] The total of £62 million is not directly comparable with the earlier forecasts that we were given because the latest total excludes both the Government's contribution of £10.5 million for the Opening and Closing Ceremonies and Manchester City Council's support of the same order for staff salaries.[246] The organisers and Mr McCartney are now undertaking a new review of the budget, a process that the Minister identified as being "of critical importance" during the transition from the planning phase to the implementation phase.[247]

94. The Games organisers expect expenditure of £62 million to be matched by revenue of the same amount.[248] The overwhelming majority of that income is expected to come from overseas television rights sales and from sponsorship. Mr McCartney acknowledged that the targets were "very ambitious", but considered that an event of the scale of the Commonwealth Games could not be delivered without such ambition.[249]

95. The British Broadcasting Corporation (BBC) has been chosen as the host broadcaster for the Commonwealth Games and will provide 10 hours of coverage a day throughout the ten days of the event, including coverage of finals in all sports.[250] Ms Done felt that the scale and the range of this coverage would ensure that the impact of the Games "will be felt right across the country".[251] In return for the domestic rights, the BBC will provide live coverage of the competition for worldwide distribution and will make facilities available for up to 72 Commonwealth broadcasters.[252] Ms Done thought that the selection of the BBC as host broadcaster had helped the sale of rights for other countries.[253] Mr Allen welcomed the commitment made by the BBC and Ms Done saw the relationship with the BBC as "fundamental to the success of the Games".[254]

96. Manchester 2002 Limited has completed negotiations for the sale of television rights in Australia and New Zealand.[255] There is a deal under negotiation with the Asian Broadcasting Corporation and negotiations are continuing for the sale of the Canadian and South African rights.[256] Ms Done felt that the organisers were "on target" in negotiations on television rights and thought that all rights' holders would be signed up by October.[257] In 1999, the organisers had an arrangement with the International Management Group (IMG) to assist in the acquisition of commercial revenue.[258] The organisers subsequently terminated their relationship with IMG, although that organisation will be paid for its part in negotiating the host broadcasting agreement with the BBC.[259]

97. We were told during our previous inquiry in 1999 by the then Chairman of Manchester 2002 Limited that the total income from the sale of television rights was expected to be around £23 million, a figure in excess of that achieved from the sale of the rights at any previous Commonwealth Games.[260] Although Ms Done acknowledged that the balance of income forecast to come from different sources had fluctuated over time, Mr Allen was not familiar with the figure given by his predecessor.[261] Based on what is known about the total commercial revenue received so far and the countries where television rights sales are outstanding, it seems likely that the organisers will fall short of the earlier target. Mr Allen argued that the commercial revenue total was best seen in the round, because there was sometimes a trade-off between sponsorship and television rights income.[262] Nevertheless, we are concerned that the sale of television rights could have been better handled.

98. In 1999, the then Chairman of Manchester 2002 Limited expected that most sponsorship deals would be completed in the course of 2000.[263] Drawing in part on the experience of the Sydney Olympic Games, Mr Allen considered this timetable to be unrealistic and said that some sponsors might not be confirmed until much nearer the time of the Games.[264] The Company now expects to formalise major sponsorship deals throughout 2001 and well into 2002, and considered that the company was "ahead of target" in securing sponsorship.[265] In addition to previous sponsorship deals with local companies, agreements have been secured with two "global brands", Adecco and Atlantic.[266]

99. A number of business breakfasts have been held by the Prime Minister and Mr McCartney for the chairmen and chief executives of companies who have shown an interest in sponsorship.[267] Mr McCartney assured us that he had no direct involvement in the negotiations over sponsorship. He saw his role and that of the Prime Minister as giving potential sponsors an understanding of the Government's commitment to and role in the Games. He said that "I am not a negotiator or a facilitator; I am an ambassador". He saw this as "a legitimate role".[268] We agree.

100. Although the progress with regard to sponsorship is encouraging, there are reasons to be cautious in considering the budgetary benefits of sponsorship. As we were told in Australia, there is a tendency for much sponsorship for major events to take the form of sponsorship-in-kind, but many of the goods and services offered as part of such arrangements would not otherwise have been purchased.[269] The experience of the Millennium Dome demonstrates that sponsorship can entail additional costs and provide services that are not budget-relieving.[270] In June 2000, we were told by the New Millennium Experience Company that it had raised £160 million in sponsorship.[271] By September 2000, it was apparent that the Company's sponsorship income was £115 million, with the balance of £46.5 million only representing "budget enhancement".[272]

101. In his account of progress with sponsorship, Mr Allen placed emphasis on the importance of attracting the right partners with relevant skills to offer.[273] He said that, of sponsorship received so far, about half was in cash and about half took the form of value-in-kind. He assured us that the organisers took a "hard-nosed view" of value-in-kind, ensuring that valuation of such sponsorship related strictly to items in the budget.[274] We were pleased to hear this, but remain concerned about the reliance upon services as a main component of sponsorship income. It is essential that all future accounts from Manchester 2002 Limited distinguish clearly between sponsorship income in monetary form, sponsorship-in-kind that replaces expenditure which would otherwise have been incurred and sponsorship-in-kind which is enhancing the Games but not directly affecting the finances. We would be reassured by a growth in the proportion of sponsorship that takes monetary form.

102. Compared with the combined target of £55 million for income from sponsorship and from the sale of television rights, the targets for ticket sales and merchandising of £5 million and £2 million respectively are relatively modest.[275] To ensure maximum public support for and attendance at the Games, the organisers have developed a ticketing philosophy of "full stadia at fair prices".[276] The ticketing programme is due to be launched this Autumn.[277]

103. The organisers state that they are seeking to deliver a truly national retail merchandising programme.[278] There are few signs of that programme at present. Ms Done told us that merchandising would start to be seen "very soon" and that there would be a whole range of products available a year before the opening of the Games. She said that a store would be opening in Manchester soon and agreed that a London store would be "a good idea".[279] The Manchester Commonwealth Games lack the immediate brand identity that helped to give the Sydney Olympic merchandising effort such a high-profile, but the lack of such a clear profile means that the effort should be greater not less. The Sydney Games merchandise was very visible across Australia more than eighteen months before the Games themselves. Effective merchandising creates profit for the organisers and enhances national awareness of, and engagement with, an event. We are concerned that merchandising for the Manchester Commonwealth Games is still almost invisible. We recommend that merchandising opportunities be put in place as a high priority and, in particular, that Commonwealth Games shops should be established outside Manchester, or that a commercial agreement be made speedily facilitating nationwide sale of Manchester Commonwealth Games merchandise.

The role of the Minister and the Government

104. In 1999, we commended Manchester City Council for its work to that point, but argued that there was a need for a greater national commitment and national investment if national as well as local benefits were to be secured from the 2002 Commonwealth Games. We recommended the designation of a Minister in the Cabinet Office as Minister with responsibility for the Games and also proposed a review by the Government of its financial involvement with the Games.[280]

105. The Prime Minister responded swiftly to our Report by appointing—in July 1999—Mr McCartney as Minister of State at the Cabinet Office with special responsibility for co-ordinating the Government's interests in the 2002 Commonwealth Games.[281] Our recommendation and Mr McCartney's appointment led in turn to the creation of a Task Force concerned with the Games, which has already met seven times and which brings the organisers of the Games together with Ministers and officials from more than ten Whitehall Departments that have an interest in the Games.[282] A new Cabinet Sub-Committee has also been established under the chairmanship of the Home Secretary to support the Minister in coordinating Government support for the Games.[283] The role of the Home Secretary as Chairman of that Sub-Committee helps to ensure that preparations for the Games are linked to the wider plans for the Golden Jubilee of HM The Queen in 2002.[284]

106. Mr McCartney identified several aspects to his role as Minister. First, he served as "the advocate for the Games" within Government.[285] Second, he acted as "the eyes and ears of the Prime Minister in ensuring we deliver what has been promised".[286] Third, Mr McCartney acted as a channel of communication between the Government and the organisers: he said that there was a "continuous" dialogue between the Government and the organisers and that a "really good strong partnership" had been established.[287] He considered that one of the lessons that the Government had learnt from the Sydney Olympics was that "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".[288]

107. The Games organisers and the Commonwealth Games Federation paid tribute to the general level of Government support and to the personal commitment of the Prime Minister and the Minister.[289] The Minister for Sport also acknowledged the value of Mr McCartney's involvement:

290

108. We were impressed by the evidence that we received from Mr McCartney and, more importantly, by the clear signs that the designation of a Minister with special responsibility for the Manchester 2002 Commonwealth Games has had the positive impact that we sought in 1999 on Government involvement with the event.

109. From the time that we first recommended closer Government involvement with the Games, we have seen the Ministerial role as inseparable from a closer involvement with the finances of the Games. Following the first financial review set in train by Mr McCartney, which we had recommended, the Government decided to provide £10.5 million towards the costs of the Opening and Closing Ceremonies for the Games.[291] A new review of the budget is now underway, and Mr McCartney said that this would examine "issues around renewed Government input", including "what more the Government needs to do to secure the success of the Games", and "whether we need to put further resources in".[292] He stated that he would be quite prepared to advocate "further input" if he considered such a contribution necessary.[293] Although the Minister declined to speculate about further Government funding for the Games, his statements did not appear to preclude that possibility.[294]

110. Since 1995, when the Games were awarded, there has been a commitment by Manchester City Council to underwrite the Games, despite doubts about whether a balanced budget for an event of this nature is possible.[295] That accords with the tradition in this country that the greatest risk for such events must be borne by a local authority. Mr McCartney reaffirmed more than once that it had always been agreed that "ultimate financial responsibility" for the Games lay with Manchester City Council.[296] He also stated that there had been no suggestion from the Council that it should be relieved of that responsibility.[297]

111. Councillor Leese told us that Manchester City Council had made a commitment that council taxpayers would not pay for the Games either through increases in their council tax or reductions in services. He said that the Council would seek to mitigate risk by putting reserves in place, funded in part from capital receipts from commercial development around the Eastlands site.[298] We accept that ultimate responsibility to underwrite certain losses is an important discipline on a local authority engaged in organising a major event. Manchester City Council is seeking clearly identified local gains from the Commonwealth Games and cannot be relieved of all risk. However, the success of the Games is dependent to some extent on the event being seen as a national event with national ownership. The Prime Minister has acknowledged that the Manchester 2002 Commonwealth Games "will be a tremendous showcase not just for Manchester, but for the whole of Britain".[299] This national element requires a national commitment. It is incumbent upon the Government to keep the finances of the Games under constant review to ensure that opportunities for expenditure on the Games of national benefit are not lost because of Manchester City Council's legitimate primary concern for the interests of the council taxpayers of Manchester. If certain national requirements are identified in the current budgetary review, we would expect them to be funded from the Exchequer.

112. Mr McCartney said that he was keen that both the Government and this Committee examine after the Games the lessons from the partnership formed between the Government and the organisers.[300] He thought that, since we recommended a more leading role for the Government and for a designated Minister, there had been a "change in direction" in the Government's approach. He also considered that the closer partnership between the Government and the organisers had led to "a changed culture within Whitehall", involving a new way of working, and that it was important to examine ways "to build on that culture" after the Games were over.[301] He argued that, if other events were to be organised, there would need to be "a different tack from how we have done it in the past", involving a "more focused approach" in Government, "a far more focused set of partnerships" and an investment of skills from the Commonwealth Games.[302]

113. A similar point was made by the Commonwealth Games Federation, which suggested that the expertise acquired during the staging of the Games ought to be retained in the United Kingdom and that Manchester 2002 Limited itself was unlikely to have the time or resources to do this.[303] Mr Allen also noted the value of retaining a core of expertise in multi-sport Games so that there was no need to "re-invent the wheel every time".[304] We recommend that specific expertise be recruited within the Cabinet Office, initially to support the relevant Minister in his work in relation to the Manchester 2002 Commonwealth Games, but thereafter to serve as the kernel of a dedicated team within the Government to advise and assist with the staging of major events.

The wider impact of the Games

114. Manchester City Council sought to bring the Commonwealth Games to the city with specific social and economic goals in mind.[305] The Council has acknowledged that the creation of "civic pride and feelings of goodwill" as a result of major events "is no longer enough".[306] The Council expects the Games to lead to increased employment and the promotion of social regeneration.[307] The Council judges that "the economic and social regeneration of East Manchester is now gaining increasing momentum" as public investment in sporting facilities is matched by private investment in retail and leisure facilities and in new housing.[308] Councillor Leese told us that the Sport City development would create around 3,000 permanent jobs and had provided the "catalyst" for public investment from other sources in the surrounding communities, which represented "one of the most needed, but also the most comprehensive regeneration programmes this country will ever have seen".[309]

115. A local priest in East Manchester held out the hope that the next 15 to 20 years "will see a doubling of the local population and a return to standards of life as good as, or even better than, elsewhere in Manchester".[310] If this hope is to prove justified, it will require continuing investment. Mr McCartney assured us that the parties involved had "a long-term strategy" to ensure continuing investment.[311] We are encouraged by the range of investment already attracted to the East Manchester area and by the long-term commitment voiced by the Minister. Nevertheless, it is vital that Sport City itself is maintained and funded appropriately to ensure that it can continue to provide a stimulus to the wider regeneration of East Manchester.

116. The benefits of the Games should be far from confined to East Manchester. The organisers will require 15,000 volunteers, entailing what is described as "the largest single recruitment, training and placement exercise of this nature to have taken place in the United Kingdom in peacetime".[312] That programme is seeking to involve people from across Manchester and the North West and is linked to training programmes for socially excluded young people.[313] The intention is to attract volunteers from all parts of the community, including particularly those with family backgrounds in the Commonwealth.[314] The success in recruiting and motivating volunteers will do much to influence the overall impact of the Games, because the crucial importance of the human dimension was fully demonstrated during the Sydney Olympics.[315]

117. Mr Allen acknowledged the need to create a sense of national ownership of the 2002 Commonwealth Games, while noting that this sense was only apparent in Australia in the last few weeks before the Sydney Olympics.[316] He thought it likely that the Queen's Baton relay would play a role in spreading participation and igniting interest in the Games across the United Kingdom comparable to that played by the torch relay in Australia.[317]

118. The Spirit of Friendship Festival should play an important role in creating national engagement with the Games. The Festival will take place between 11 March 2002 (Commonwealth Day) and 10 August 2002 and will involve education, sport and culture.[318] A range of education projects that form part of the Festival have received £1.287 million in Government funding and this will enable information about the Games and the Commonwealth to be placed in 30,000 schools across the United Kingdom from September 2001.[319] The Arts Council of England is helping to fund the cultural programme that will include cultural activities by artists from the United Kingdom and across the Commonwealth.[320] Mr Allen saw that programme as an important opportunity to celebrate the cultural diversity of the country.[321] The BBC as host broadcaster is also expected to contribute to increasing awareness of the Games through the Spirit of Friendship Festival.[322]

119. With regard to enhancing national awareness of and involvement in the Games, Mr Allen understandably cautioned against the need to "peak too early".[323] Nevertheless, we think that more should be done. In particular, we are concerned that involvement with local authorities seems at present to be confined to the North West.[324] Local authorities can play an important role in bringing together the different strands of the national dimension of the Games, as Ms Done acknowledged.[325] We recommend that the organisers of the Manchester Commonwealth Games, or the Government as appropriate, contact all local authorities in the United Kingdom to inform them about the national dimension of the event and the many opportunities for involvement by communities and individuals across the United Kingdom with the Games.

120. When we examined preparations for the Games in 1999, we were concerned that plans for capitalising on the tourism potential of the event were still at the exploratory stage.[326] Since then there has been marked progress. A marketing plan has been developed, clear targets and key markets have been identified and promotional material has been produced.[327] The Games lie at the heart of both the sports tourism aims of the British Tourist Authority and the drive by the North West Tourist Board to attract more tourists to the region.[328] Mr McCartney spoke enthusiastically about the opportunity created by the Games to attract overseas tourists to parts of the United Kingdom other than London.[329]

121. Although we are much encouraged by a great deal that we saw and heard in Manchester, we have no doubt that there is a need for continuing scrutiny of progress with the Games. The case for parliamentary examination is strengthened by the welcome increase in the level of commitment by the Government. Mr McCartney said that he expected to talk to the Committee later in the year and that he wished the Committee to be involved in the process leading up to the Games.[330] We welcome that offer. We expect that this Committee or its successor will wish to examine progress in preparations for the Manchester 2002 Commonwealth Games later in 2001 or early in 2002.

215 HC (1998-99) 124-I, para 69; Evidence, p 181. Back

216 Evidence, p 179. Back

217 HC (1998-99) 124-I, para 69; Evidence, p 179. Back

218 Q 433; HC (1998-99) 124-I, para 70. Back

219 HC (1998-99) 124-I, para 72. Back

220 Evidence, pp 175, 178. Back

221 Evidence, p 179. Back

222 Evidence, p 223. Back

223 HC (1998-99) 124-II, p 147. Back

224 Evidence, pp 179, 38, 49. Back

225 QQ 428-432. Back

226 HC (1998-99) 124-I, para 71; Q 147. Back