Examination of witnesses (60-79)
MONDAY 19 JUNE 2000
MR ROBIN
YOUNG AND
MS PAM
ALEXANDER
60. So you would say that because the owner
had not insured it the first time you would be less likely to
support a worthy scheme the second time?
(Ms Alexander) We would take into account all of the
elements surrounding the circumstances of whatever the tragedy
had been. We would take a view on the responsibility of the owners
and the benefits that we would get from re-investing.
61. Can I just briefly and finally ask you,
there was a phrase in paragraph 3.19 which disturbed me. This
is about recovery of grant on the sale of property: "The
conditions attached to repair grants require the grant recipient
to inform English Heritage immediately in writing if they intend
to sell or dispose otherwise of their interest in the property."
Then it says: "We confirmed that English Heritage had recovered
sums where information on disposals had come to light." ".
. . had come to light" is less firm than where English Heritage
were notified. Is it the case that there had been sales where
there had not been notification and where you had to pursue people
in order to recover the sums?
(Ms Alexander) I do not think I can answer that question.
What I can say is that wherever we are notified, and however we
find out, we do pursue it all the way through.
62. Perhaps you could provide the Committee
with a note just clarifying whether some of those sales you found
out about rather than were notified of and, if so, which[9]?
(Ms Alexander) I am sure that will be
the case.
63. Might I just ask why it is that on death
the grant conditions then die at that point? Why are there no
provisions to extend them?
(Ms Alexander) Because the statute does not give us
powers to extend beyond.
Chairman: It conjures up an interesting idea
of pursuit of the afterlife.
Mr Williams
64. I am rather interested in the point Mr Gardiner
has just raised. Frankly, I have to tell you I find it astonishing
that you do not insist on insurance. This is taxpayers' money,
is it not? Is it not slightly cavalier just to leave it to the
discretion and whim of the persons who have already benefitted
from substantial sums of our constituents' money?
(Ms Alexander) They will be taking out their own insurance
in relation to their positions on their overall property. There
are a number of conditions we could think of imposing but the
more conditions we impose, the more the costs that can be attributed
to our involvement are likely to require higher grant. We do have
to take a view on which are the elements which we consider are
essential to achieve value for money and at the moment that is
not one of those we insist on.
65. I hate to disturb your period of contemplation,
Mr Young, but does the Department have any misgivings about this
attitude? If it were you as a Department I would have thought
it is highly likely you would insist on insurance to back up grant
provision by the Department.
(Mr Young) I think it is a difficult issue. You have
got to remember a bit about the variety of works we are talking
about here. Some of these things are just roof repairs to existing
buildings and you can hardly insure the roof separately from the
rest of the building. There is a huge variety of issues here.
I think it is highly desirable indeed that the person receiving
the grant should adequately insure, which is what 3.11 says: "Recipients
must ensure that the property is adequately insured while the
works are in progress", but after that—
66. Coming back to Ms Alexander, you said you
take account of various matters. I accept the point that has just
been made by the Department, it may be a relatively minor grant,
but have you ever insisted on insurance in relation to one of
the grants you have given? What is the biggest grant you have
ever given to a private individual?
(Ms Alexander) Oh, I could not possibly answer that
off the top of my head I am afraid. I would say that nearly 80
per cent of our grants go not to private individuals but to local
authorities, building preservation trusts, a number of different
public bodies, who of course will be in a particular insurance
position in their own right[10].
67. Let me come back to the other question since
you cannot give me a top figure. Since you take all of these factors
into account, have you ever found a situation where you have insisted
on insurance?
(Ms Alexander) I do not believe that we have because,
as the Permanent Secretary has said, it would be very difficult
to find insurance—
68. You have given me the answer I want and
I have had Mr Young's view of it which I assume will be very similar
to yours. We have been told, and it would have sounded much more
reasonable, every case is dealt with on its merits. That was the
impression we got from what you said, that you take everything
into account, but the reality is that was just a smoke screen,
you never do this. All right, it is for you to defend but all
we want to know is whether you do or whether you do not and we
have got our answer. Mr Rendel raised this fascinating situation
in relation to ex-King Constantine. Who paid for the marquee?
(Ms Alexander) All of the costs were met by the ex-King
of Greece.
69. All costs associated with it?
(Ms Alexander) Every penny to my understanding. Certainly
it came through his consultant.
70. That is more reassuring than the answer
in relation to the insurance. So there was no cost incurred by
English Heritage as a result of that arrangement?
(Ms Alexander) Our requirement was that he should
meet all of our costs.
71. Good, that is fine. That clarifies that.
This again comes back to one of Mr Gardiner's points about grant
conditions, lapse on death. Thinking in terms of inheritance tax
and so on it seems rather strange that the people who are going
to possibly benefit from the situation do not then have to carry
on the obligations that existed before. Why?
(Ms Alexander) Because we have no powers under our
statute to require that they should do so.
72. You do not need it under statute, you can
do it under contract.
(Ms Alexander) We have specific powers to set conditions
on grants, we cannot set conditions, I do not believe, that tie
successors who inherit property.
73. Would that be so, Mr Young? Would they not
be able to say "we are willing to give it to you but we are
only willing to do it on the understanding that there is an insurance
agreement"?
(Mr Young) My advice is that the Act precludes just
that.
74. It precludes it?
(Mr Young) Yes, the grant is tied to the individual.
75. When was the Act passed?
(Mr Young) 1953.
76. What about any stake in the enhanced value?
Does the taxpayer stand to benefit if these properties change
hands at increased prices as a result? What happens then and what
formula applies?
(Ms Alexander) That is the purpose of our claw-back
provision and that is why when we are notified or find out about
a sale of a property we will take back the full grant if appropriate,
and only in circumstances where there is some good reason would
we not claw-back the grant.
77. But the grant may have enhanced the value
of the property beyond the value of the grant. The taxpayer does
not get any share of the windfall, does it?
(Ms Alexander) The purpose of our financial appraisal
is to identify the market value of the property after repairs
and to see whether there is a deficit between that and the cost
of the repairs themselves. So if we take the view that the repairs
will enhance the property by more than their cost, we will not
give the grant.
78. Somewhere I have come across a case where
you have lent money to a developer. I cannot pin it down, but
you will be familiar with it. It is due to reach fruition towards
the end of this year, so I realise we cannot have a final position
on it, but where do we stand there in terms of securing the taxpayers'
interest?
(Ms Alexander) In that case we have an agreement that
we will share the profit of the development over and above a certain
amount in equal parts[11].
79. Over and above the market value at the time
at which you made your grant available, is that it or what?
(Ms Alexander) Over and above the amount which we
believed the developer needed to achieve in order to have the
incentive to do the development in the first place.
9 Note: See Evidence, Appendix 1, page 14 (PAC
1999-2000/224). Back
10
Note: See Evidence, Appendix 1, page 14 (PAC 1999- 2000/224). Back
11
Note by Witness: English Heritage shares in the profit
by recovering grant at the rate of 50 per cent of the amount by
which income exceeds project costs plus overheads, up to the full
amount of the grant paid. Back
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