Examination of Witnesses (160-179)
WEDNESDAY 14 FEBRUARY 2001
MS PAM ALEXANDER AND MR BRIAN GLICKSMAN
160. You have written rules about that?
(Ms Alexander) We do indeed.
161. The £5,000 cheque when it was received, who received it?
(Ms Alexander) It was sent to me. As I said, I was not in the office on the day it came in but I received it on the Friday when I came in after having been out of the office most of the week.
162. So you received it personally or it had been opened by a secretary or somebody beforehand?
(Ms Alexander) I imagine so. I do not actually remember the event, I am afraid.
163. So you found out about it on the previous Friday.
(Ms Alexander) I knew that it was going to be sent because Sir Jocelyn rang me to tell me he was sending it.
164. When did he tell you?
(Ms Alexander) Earlier that week. He had managed to contact me while I was out of the office on the Commission tour. I believe it was on Wednesday.
165. You knew when you came to see us last time that you had actually been rung by him just the week before and you knew that it was a cheque from him?
(Ms Alexander) Of course I knew that the cheque was from him, yes.
166. You must have known within a day or two that it had come in.
(Ms Alexander) I knew it was within the last week and that is why I said it was very recent. I had no intention
167. Carry on.
(Ms Alexander)I had no intention of in any way trying to mislead the Committee. I am sorry if I was not as helpful as you had hoped but that is why we tried to cover every point that was raised in the memorandum.
168. Do you have any evidence that Sir Jocelyn has ever approached ex-King Constantine himself to try and get this donation out of him?
(Ms Alexander) I do understand that Sir Jocelyn has been reimbursed, yes.
169. A reception at Kenwood House you told us at the time costs £3,000 for two hours and £4,000 at the weekendyou gave us the details of that in a noteand £1,000 for an extra hour. My understanding is that a normal dinner is four hours rather than the two hours for a reception. What is the cost of a dinner?
(Ms Alexander) A dinner at Kenwood is £6,000 plus £1,000 for any additional hours.
170. £6,000 for four hours?
(Ms Alexander) That is correct.
171. And what element of that is profit and what element of that is the costs of running Kenwood House at the time?
(Ms Alexander) It depends very much on the individual event and the nature of staffing for that event. It will improve as we go forward with our business because in the first year at Kenwood we had some fixed costs which we had to carry on a smaller number of events than we would normally hope to get. As the events across the whole business increase we will decrease the fixed costs for future events and obviously the profits will rise.
172. What roughly would you expect the profit to be for a dinner?
(Ms Alexander) I would roughly expect the profit for the hospitality business overall to achieve the industry standard, which is about 40 per cent.
173. 40 per cent of what?
(Ms Alexander) 40 per cent of the turnover.
174. You are saying that the profit on a dinner would be around £2,000 or £3,000 out of £6,000?
(Ms Alexander) No, I was suggesting that was the profit on the overall hospitality business. I do not have the figures for profit on dinners as such. We could look into it and I could write to you on that.
175. You are talking anyway somewhere in the region of up to £1,000 a time in profit in Kenwood House.
(Ms Alexander) In due course, when the business is really taking off and after we have stopped having to deal with start-up costs and with the fixed costs spread over a normal year of income.
176. You have quoted a letter from Lady Anson saying that the "donation was a most generous donation especially since all the costs were paid in full". Do you agree with that?
(Ms Alexander) I do not take a view on generosity. I think in relation to overall costs, which were very much higher than the organiser had originally intended, that the comment was made in the context that the event had already cost £29,000.
177. Do you believe that that was a reasonable return on an event given that there was a set-up and take-down period of 18 days during which part of the estate was out of use and a full day's closure of the entire house and half the estate?
(Ms Alexander) Yes I do believe that the return was what we got from holding a prestigious and important occasion and that was the basis upon which we took the decision. I do not think we would have taken the decision had that not been the primary driver. The donation was not the primary reason for taking the business and the £29,000 of costs which we attributed to the event (which covered all of the costs that were needed for the set-up and take-down period and the day itself) were the basis on which we took the event forward. It is not unusual in this business to take an event forward on costs only if it is going to be a sufficiently prestigious event to bring other events in for the hospitality business.
178. Nevertheless this was the sale of a national asset in effect, the use of a national asset during a full day and to some extent other days as well. It was done on the basis that the Chairman of the organisation involved made an agreement which he set upand the note on the original setting of the fee made it clear that he was the first person to propose that it should be by way of donation to Lady Anson. He set it up as a donation with a friend of his as the client. He then, having decided the ex-King had to pay the donation, apparently decided what to pay and when, and then paid it himself. Do you believe that that is a reasonable way for the Chairman of a national organisation to behave and do you believe that you as the accounting officer were right to accept that that was a reasonable way to behave? I find it hard to believe that this was the way that either you or he should have behaved on this occasion.
(Ms Alexander) I do not believe that was how it happened, Mr Rendel. Sir Jocelyn was the first person to be contacted by the organisers and he made the contact. I think that is a perfectly acceptable role for the Chairman of an organisationto be bringing in high level contacts. He attended the first meeting but did not set the basis on which we charged. As you will see from the minutes of that meeting, the proposal was that the whole cost and any voluntary donation should be covered by a donation. I did not think that was the basis on which it should go forward and to my recollection nor did Sir Jocelyn when we discussed it further. The basis on which we took the proposal to commission was that costs would be covered, that there would be significant national and international prestige and publicity from the coverage for the event and that there would also be a donation. That was very clearly to ensure that our costs were covered and that was the basis on which I as Chief Executive and accounting officer felt it was right to take this particularly event forward, as a one-off, very special and extraordinary event which was not in the normal run of our business and did not fit in with normal charging patterns.
179. The note on the fee clearly says that the Chairman made the suggestion to Lady Anson about a donation, who agreed that this was the correct approach. So it was the Chairman's decision.
(Ms Alexander) But it was not an approach that we followed.
3 Note by Witness: Excluding the central management costs of English Heritage Hospitality, the average profit on the three dinners held at Kenwood House in 2000-01 is £2,598 on an average charge of £7,120.