Examination of Witnesses (Questions 340
- 354)
TUESDAY 21 MAY 2002
MR MICHAEL
JEFFRIES, MR
MICHAEL CUNNAH,
MR ROGER
MASLIN AND
MR NIC
COWARD
340. What do you think they envisaged by saying
that Birmingham would be the preferred second bidder if Wembley
did not go ahead?
(Mr Coward) I cannot answer that.
Ms Shipley
341. I hope it does not sound rude but in relation
to Birmingham (and my constituency is ten miles from Birmingham)
you are speaking with forked tongues. Just outline for me again
why Birmingham is not wasting its time because everybody here
went "ugh" at my colleague's question because we thought
that you, if I can speak for the group, collectively had demonstrated
on the record this morning that Birmingham was wasting its time.
Just outline for me clearly how Birmingham could end up with a
national stadium in your view?
(Mr Coward) It is not for me to suggest whether Birmingham
is or is not wasting its time, and that was the point that I made.
What we have made clear throughout—
342. No, no. Outline for me the route where
it might because I do not think from anything you have said that
it could, in fact I think you have demonstrated that it could
not for contractual reasons, for all sorts of reasons I think
you have demonstrated that it could not. You said that was wrong
so demonstrate for me a route that it could.
(Mr Coward) If the parties with whom we have contractual
obligations allowed us to do so we could speak to Birmingham about
taking our events there. As I made clear earlier, we have been
obliged by Sport England, by Wembley National Stadium Limited,
to take our events to Wembley National Stadium.
343. Mr Jeffries, what a mess. You have walked
into a horrible mess. Like my colleague, Mr Bryant, I am so glad
that you have accepted that there have been major deficiencies
which have to be rectified. If you could think laterally a bit
here, what action do you think the Government should now take
to ensure that (a) public money is not put at risk in the way
that it clearly has been and (b) that nationally important projects
are brought to fruition?
(Mr Jeffries) As far as I understand the position
on this project there is no more public money coming into it,
it is all either coming from funding from the FA or it has been
raised in finance and the business plan has to pay off both the
interest and the principal.
Chairman
344. Mr Jeffries, the Secretary of State has
told the House of Commons that £20 million could be forthcoming
and she has made it absolutely clear to me that that money is
a substitute for expenditure that you, WNSL, would have made and,
therefore, the Government is contemplating a subsidy of £20
million.
(Mr Jeffries) I stand corrected, Sir. I have tried
to absorb so much information in such a short time that that slipped
my mind. To answer your question, what has got to be done in WNSL
in my view, and a lot of it is already being done, is we have
to put in compliance procedures, corporate governance, to see
that public interests are safeguarded in any additional monies
that come into this project. I see that as my clear responsibility.
It has exercised my mind a lot over the past four weeks, particularly
as I have read the reports on the past history of this project.
That is obviously my prime responsibility. What I have done so
far is proposed a committee structure for the board which in my
view is much more rigorous than you would find in any corporate
situation. I have set up committees which involve at least two
non-executive directors (NEDs) in each of the areas, construction,
corporate governance, and so on and so forth. I will expect monthly
reports in writing to our board meeting. By that method I expect
the NEDs to be involved directly with the executive in the business
on a month by month basis which in my view should end the criticism
that there was a gap between what was happening in the executive
of WNSL and what the board knew about what was going on.
Ms Shipley
345. I would suggest to you that your answer
demonstrates that our first two witnesses this morning were absolutely
correct in their criticisms because everything that they said
suggested that those things were not in place and you have just
demonstrated that indeed they were not because you have had to
put them in place.
(Mr Jeffries) They were in place but they were not
perhaps implemented as well as they ought to have been. I would
have to disagree with some of the comments made in the Tropus
Report and some of the recommendations that they made, that is
my professional opinion as opposed to theirs. One of the Members
of the Committee this morning did make the point that we have
to keep in perspective the so-called report by Tropus is in fact
allegations made by a disenfranchised supplier of professional
services I should say, to WNSL.
346. Can I ask you, Mr Maslin, I think it was
you, when replying to the worst case scenario for return of the
£120 million that has got to be paid back, I think it was
you who said some would, not all. What percentage?
(Mr Maslin) It all depends on the business case that
is actually put together. For instance, if we do reopen the stadium
then I would suspect all the money that we would make from the
stadium would as a priority be repaid back to Sport England.
347. Best guess, what percentage?
(Mr Maslin) We would pay back 100 per cent of the
monies until such time as the full £120 million was repaid,
it is as simple as that as clearly described in the LFA.
348. I think you also said the stakeholders
would be part of this, Sport England, FA and the Government, is
that correct?
(Mr Maslin) Clearly we would be meeting with Sport
England and the FA and other members to assess what the best options
were at that time.
349. And the Government?
(Mr Maslin) And the Government.
350. Why would the Government have to pay money
back to the Government in effect? Why would the Government be
part of this? Why would you expect the Government to pay back
part of this money?
(Mr Maslin) Sorry, what I mean is the key stakeholders
there would be Sport England and the FA, not the Government per
se.
351. I think earlier on you said there were
three stakeholders.
(Mr Maslin) The two appropriate stakeholders in this
case are Sport England, representing DCMS in that sense, and the
FA.
Chairman
352. Could I ask one final question which may
turn out to be two final questions. What are the liquid assets
of WNSL?
(Mr Maslin) The liquid assets?
353. Yes. How much money have you got?
(Mr Maslin) About 1.2 million quid in the bank at
the moment, Chairman.
354. That is not a lot of money for a project
like this, is it? I suppose it protects you from being described
absolutely as a shell company but you are pretty near.
(Mr Maslin) No. Since we have been closed as an operating
stadium we are doing two things. One, we are running the hospitality
for the FA on the road which gives us an income stream but, secondly,
our other costs are funded by the FA.
Chairman: That is a very interesting
relationship which we may have to ask about further at some point.
Thank you very much, gentlemen.
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