House of Commons - Culture, Media and Sport

Select Committee on Culture, Media and Sport Fourth Report

NEW PROPOSALS

A new body—merger of the BTA and ETC

44. The DCMS has identified the problems within the support structure for tourism which were highlighted during the crises of 2001 and has sought to tackle these by changing the arrangement of agencies. In light of the clear need for action, the Department for Culture, Media and Sport on 31 October announced the merger of the ETC and the BTA to form a single body responsible for tourism in England.[87] This was after what the ETC described as a 'Summer debate' in which the minimum funding needed to market England was identified as £10 million from Government, matched by industry contributions.[88]

45. The resulting body will have the responsibility of marketing England as well as taking on the current responsibilities of the BTA for marketing Britain overseas, "with a very high level of transparency" over its distinct functions according to Tessa Jowell .[89] The new body will market Britain abroad employing a new strategy developed by the recently appointed BTA Chief Executive. The BTA told us that "Tom Wright will be designing the organisation to ensure both sets of objectives will be delivered".[90] This merger was designed to incorporate the skills within each of the organisations to form a single body to deal with all tourism in England, a "pooling of expertise" claimed to be the main advantage by the BTA.[91] The new structure for the organisation is laid out in Annex 1.[92] This shows domestic and international marketing are clearly distinct from each other within the new structure.

46. The BTA and the Secretary of State emphasised to us there would be "two distinct funding streams which will be embodied in our funding agreement".[93] This funding will be for two separate activities within the organisation; the marketing of Britain overseas and the marketing of England domestically. The BTA say that the "accounting arrangements within the organisation will enable the use of those funds to be completely transparent".[94] The ETC have provided the Committee with recently agreed funding for the new organisation for 2003-04 and 2004-05. The amount grant-in-aid available for promoting Britain overseas will be £35.5 million.[95] The amount available to lead and co-ordinate domestic marketing in England is £12.1 million (this includes at least £3.6 million distributed directly to the RTBs through the RDAs reflecting the transfer of functions).[96] It concerns the Committee that much of the core funding is not being made available for the direct marketing of England through the new body. The extra funding available to the body will be through a public-private partnership with the Government, match-funding donations from the private sector with £10 million extra funding provided by DCMS solely for marketing England over the three years beginning in 2003-04.[97] DCMS have informed the Committee that "£2 million will be made available subject to completion of a satisfactory implementation plan by February 2003".[98] A further £2 million will also be available in 2004-05 but "the Secretary of State is minded to challenge the England Marketing Advisory Board to raise £3.5 million of private sector funds in that year to which she would add a further £1.5 million".[99]

47. It is yet to be seen if the new arrangements will work. Although the Committee welcomes the increased funding made available for marketing England, it still has concerns about the levels of investment by the Government into the sector and its development. The amount of money available to the sector, especially in England, from Government is not sufficient to support such a large and diverse industry. The new arrangement seems to be just a more complicated way of cutting the same funding cake.

48. The key role of the new agency was announced as the tackling of the tourism balance of payments deficit. The new body has yet to be named, but this will be done before the official merger in April 2003. All the roles of the BTA will be combined with a number of the existing roles of the ETC. These will be determined by the ETC Services group that "has been established to agree these details subject to the approval of Ministers".[100] An additional role of the body will be to pursue closer co-operation with Scotland and Wales.[101]

49. The new organisation will provide a single point of contact for anyone wanting to be involved in either domestic or international marketing. The 1969 Act provides for an "English Tourist Board" (although this has traded as the ETC to reflect its post1999 role). This requirement has been met by the creation of an English Marketing Advisory Board (legally named the English Tourist Board) which will advise on the marketing of England and ensure this is a transparently funded and discrete function.[102] The statutory functions will be vested in the board and it "will serve as an advisory body to the new organisation but will not employ any staff or have a budget".[103] DCMS claims that the merger is not driven by the need to avoid primary legislation, "but the opportunity will be taken, when Parliamentary time allows, to make some changes".[104] It seems that the Department has ducked the opportunity to design an appropriate new structure for English tourism taking proper account of the devolution settlement and the need to amend the existing legislative framework. We look at this further below.

50. A number of leading hoteliers from around the UK have submitted evidence to the Committee regarding the appointment of a new chairman of the BTA (a process which spans the announcement of the reforms and our inquiry).[105] They all emphasise the importance of the role, asserting that they "don't want another chairman for just two days a week".[106] DCMS have told the Committee that there will be a review of the post "in light of the experience of the first year of the new chair" but feel that "it is the Chief Executive and his team of senior managers who need to be full time".[107]

Can it work?

51. The message that the Committee received from the BTA and the ETC was that the arrangement was "workable", though it was not the format suggested by either of the organisations when consulted by DCMS.[108] The BTA told us that "the market expects to be able to relate to one body"[109] and Mr Britten from the ETC said that "There are benefits in here" when discussing the new arrangements.[110] However, other parties within the sector have not expressed such enthusiasm about the announcement, for example two-thirds of the Scottish Tourism Forum membership who replied to consultation highlighted a risk to Scotland from perceived weakened overseas marketing.[111] We feel that the reinstatement of the marketing function for England is a positive step. However, we believe that England needs its own national tourist board to adequately promote and support tourism within England.

Will it work?

52. Concerns have been raised outside England about the alleged favouritism by the BTA towards England; the Scottish Tourism Forum feared "an inevitable 'skewing' of BTA effort".[112] The Committee believes that the arrangement will encourage competition rather than co-operation between Scotland, England and Wales and that this will not be advantageous to the UK tourism industry, especially in view of the crucial overseas perception of the UK as a single destination. The Secretary of State for Culture, Media and Sport believes that the arrangement will be a great success and that the comments of those in the industry arise purely from a fear of change which will be eradicated when the much needed renovation of the support structure has occurred in April 2003 and the benefits are felt.[113] The Committee agrees that change is needed but believes that the proposed organisation is not the best possible solution, and may not work.

Does it make sense?

53. It is yet to be seen whether the new body makes sense. It is the aim of the BTA and ETC to pool their skills and expertise to improve the service they provide as well as becoming more efficient through the combining of office functions. This increased efficiency, should it come about, will not make up for the fact that neither of the tourist bodies involved recommended this arrangement; this raises fears in the Committee on the effectiveness of the consultation process.[114] The Committee feels that the new arrangements do not appropriately take account of the devolution settlement, leaving the Welsh and Scottish tourist sectors with serious concerns about their future promotion by the BTA. It is also questionable whether the best interests of England will be catered for under the new arrangements; as the ETC said "It is no secret that this is not our recommendation".[115] This raises the question why DCMS did not take up their recommendation. The WTB "thought a commercial PLC model should have been put in, which would have been politically acceptable to all stakeholders, far more strategic and far more efficient in devolvement of funds to Scotland and Wales and to England, and buying-back central services through the BTA would be very commercially efficient".[116] We feel that it would make better sense for England to have a distinct national tourist board with a marketing function and for each national tourist board in Britain to relate to the BTA in the same way. UK tourism needs the united support that would come from either a single cross-border body or balance of arrangements in which England has its own national tourist board. Support for tourism should reflect the perceptions of those whom we are seeking to attract to our collective shores. Anything else is rather parochial and will be less effective.

Role of the regional development agencies

54. The RDAs have an increased responsibility for the strategic development of tourism, creating an integrated strategy for tourism at a regional level.[117] The Secretary of State announced on 13 May 2002 said that "Regional Development Agencies will in future play a stronger part in the strategic leadership of tourism. Regional Tourist Boards are the natural delivery partners for the RDAs".[118] Each RDA can promote its region both domestically (which has been encouraged as the primary form of domestic tourism promotion within England) and also abroad. But this promotion of regions abroad by the RTBs has caused an amount of duplication, Mr Quarmby of the BTA said: "I do not support the RDAs having an independent tourism promotion activity overseas and I very much hope that that will not develop".[119] DCMS stated that the "promotion of specific destinations can 'enrich' a marketing offer" but recommend that the regions and local authorities "work closely with and through the BTA to avoid duplication of effort, waste of public money and, at worst, confusing the market with conflicting messages".[120]

55. The GLA and London Development Agency (LDA) hold the regional responsibility for tourism within London. However, representatives from these organisations told the Committee that they have not yet finished their review of tourism for London, have not set up a VisitLondon website to provide tourism information[121] and have "no specific programmes in place for supporting tourist businesses or the tourism sector".[122] The Committee, therefore, feels that the regions may not be being best served by the agencies in their new role. In the case of London, which is a gateway for all of the UK, this affects the sector as a whole. We were seriously concerned by the insouciant attitude of the GLA and the LDA on these matters.

Process of consultation

56. It came to our attention that there were many parties, specifically the Tourism Alliance, the WTB and VisitScotland, not properly consulted for their opinion on the proposed changes. They may have been informed after decisions had been made but felt they made no formal contribution to the decision-making process.[123] The WTB confirmed this view during oral evidence: "We were consulted at ministerial level but the Tourist Board were not brought into the loop, neither were the board members of the BTA, so it was a very strange situation"[124]. The Tourism Alliance took a more positive view and they are "pleased that there is still time for the detail to be worked out"[125] within the new body but feel the "department take a laissez faire approach to tourism".[126] The concern they have is getting their "message across Whitehall that a whole variety of different issues have an enormous impact for the industry"[127] and they feel that "more could be done"[128] by DCMS to provide tourism with effective and efficient promotion. We have serious concerns over the process of consultation which took place in relation to the proposed changes in tourism structure in the UK. The Committee believes that this must be rectified in any further consultations.

57. DCMS claimed that the consultation process was systematic. However, this process did not include consulting officially with the Tourism Alliance, VisitScotland or the WTB which the Committee view as a serious omission from any tourism consultation process.[129] The Secretary of State defended DCMS against the comments of the Tourism Alliance, saying: "I think it is simply not fair to say that it gets a low priority from the Department".[130] DCMS have provided a full list of the consultation that took place with the industry stakeholders.[131] This details a number of meetings held with a variety of representatives which do not include the WTB or VisitScotland.