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UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 552-iii House of COMMONS MINUTES OF EVIDENCE TAKEN BEFORE CULTURE, MEDIA AND SPORT COMMITTEE
LONDON 2012 OLYMPICS: FIRST STEPS
Tuesday 1 November 2005 MR KEN LIVINGSTONE and MS MARY REILLY LORD MOYNIHAN, MR SIMON CLEGG, MS SARA FRIEND and MR MIKE BRACE OBE Evidence heard in Public Questions 165 - 238
USE OF THE TRANSCRIPT
Oral Evidence Taken before the Culture, Media and Sport Committee on Tuesday 1 November 2005 Members present Mr John Whittingdale, in the Chair Janet Anderson Mr Nigel Evans Paul Farrelly Mr Mike Hall Alan Keen Rosemary McKenna Adam Price Mr Adrian Sanders ________________ Witnesses: Mr Ken Livingstone, Mayor of London, and Ms Mary Reilly, Chair, London Development Agency, examined. Q165 Chairman: Good morning. This is the third session in our ongoing examination of preparations for the 2012 Olympics in London and I would particularly like to welcome this morning Mayor Ken Livingstone and Mary Reilly, the Chairman of the London Development Agency. You, I suppose, will play a key role in what is the biggest task which is delivering facilities on budget and on time, but can I begin by asking you what are your long-term ambitions for London as a result of our hosting the Olympics? What do you want the Olympics to accomplish in terms of cultural benefits, sporting benefits, transport and regeneration legacy? Mr Livingstone: Well, it is important to bear in mind that, for us, the Olympics is an add-on to a major regeneration of the Thames Gateway and it has already achieved its primary goal that led the Bid which is to focus the thinking of government with the timetable. I suspect we might have saved three or four years here in the roll-out and development of the Thames Gateway with new housing and transport and employment opportunities by having that deadline which will hang over the head of every government and every mayor up until 2012. I see it as a huge regeneration project, the first stage opening up the Thames Gateway, which puts in the transport and then we build on to take the next stage and the stage beyond that until eventually we are running across the board as the GLA. Clearly with a development as substantial as Stratford, you would have wanted more than just homes and offices, you would have wanted some great cultural or sporting institution and, therefore, for us, as it was for the Mayor of New York and the Mayor of Paris, the Games drive forward regeneration of a neglected area of the city and, in that sense, I do not think there is any prospect that we would have achieved the decision to go ahead and extend the East London Line to Croydon, Crystal Palace and up into Hackney without the Olympics because it was in the bottom ten of the priorities of the Strategic Rail Authority. We would eventually have got the decision to extend the DLR into the lower Lea Valley and various upgrades, but the timetable of 2012 means we are doing it two or three years ahead, so, for London, it is already a huge step forward before we get on to all that will flow from the Games when they come. My business and economics adviser was reporting yesterday on meetings with all the large shops in Oxford Street. They already are thinking what they will do to maximise the benefits that London can gain from it. I know when I meet Jack Connell(?) and others further afield from London, they also are, everyone is, gearing up to, "What can we get out of this?" With the amount of wealth created from this, literally most probably no part of the United Kingdom will not have a firm which is contracted to provide something for these Games and what we need to do is make sure, and the LDA is doing a lot of work on this, that we manage the contracting process so that small- and medium-sized firms are not squeezed out by contracts that are too large for them to manage and that, I think, is crucial. You may have seen a very good colour map of the levels of employment in London about a week ago in The Guardian which identified that that area around the Games is really the worst area of unemployment anywhere else in Britain and one of the worst in Europe, so we want to make sure as well that local people get the chance to get the jobs that are coming. We have invited tenders for the construction of the East London Line and we have gone a stage further than any other tendering process in Britain in specifying the employment of local labour and building and a monitoring of that. In the past, a lot of big contracts have been let with all the right warm words, but it just does not happen and clearly the work the LDA is doing with the precedent set by the East London Line tender must now be built in by LOCOG and the Olympic Delivery Authority over the years to come so that we get the maximum benefit for the whole of Britain out of this. Q166 Chairman: You say that the Olympics have proved a method by which you are able to bring forward your long-term ambitions for that part of London, but in terms of the specific benefits which will come from having the Games held in London, what are the absolute key priorities which you can see in terms of the long-term benefits? Mr Livingstone: Well, the long-term benefit is the community that will be there when the Games have gone and clearly the sort of hi-tech employment and high-skill, high-value-added employment that we broadly plan for this area because there is no point London going down markets to compete for jobs that have already left this country and will not come back; you have got to have a setting of a framework that makes it attractive. The real objective, and we could have had the sort of problem where this could just have been a rather dull new town stuck in the East End, but what we aim to do is to make this a part of London so that people, when they come from the rest of Britain or the rest of the world, who will wander around the centre and the West End and Kensington will equally want to see Stratford which will have a feel of modernity and dynamism. One can look to parallels with Shanghai and I am going to China in April and we are taking the model of the Olympics and we are taking a list of the land that the LDA will have for sale and saying, "Look, here is a huge development opportunity. You have emerging great corporations which will be looking for bases in the West. Here in London is a site so close to the centre and nowhere else in Europe is there that potential and in a city that welcomes foreigners and strangers quite uniquely compared with many cities in Europe where that is not the experience". Therefore, I see the long-term goal here of locking in the emerging economies of the world, Russia, China, India and others, to see London as a sort of business and finance services entrepôt for the whole of western Europe, if not for the West. Q167 Paul Farrelly: It is a very interesting point, Ken, that you make in terms of focusing the Government on the timetable. I am not a London MP, but I do live in London, I live in Hackney, and clearly there are major regeneration routes, and you have mentioned the East London Line. I would think that lots of communities of London people potentially affected by the projects in their area would welcome the Olympics, but would not wish to see the dash for the Olympics trampling over their rights to proper consultation for the preservation of things which are important to their local communities, such as certain items of heritage, and I know there is a live issue in Dalston at the moment about that. What comment would you make on that issue and what message would you give out to people in those local communities? Mr Livingstone: When the Government established the Greater London Authority as a new institution, it built consultation in to a level which is I think, if anything, excessive. I can spend, and I do feel compelled to spend, so much of my time consulting that I think we should perhaps shift the balance back a bit. If ever we eventually build the West London tram, which Alan Keen knows well, we will have spent about eight years on consultations and public inquiries before anyone actually starts work on laying the track for it, so we are not short of consultation; it is built into everything. The LDA and the Greater London Authority have good community engagement and you have in this area the organisation Telco, a combination of trade unions and churches which have come together, which made major interventions in the last mayoral election and the one before that and has negotiated a deal with the LDA and myself and Seb Coe about the way consultation will take place and the involvement of local communities. Therefore, I think we will not want for consultation in the years to come, but we may want for a bit of speedy decision-making as a consequence of it. Q168 Adam Price: Turning to the LDA, it is acting as a proto-ODA until the Bill is passed. Could you just sketch out for us the role of the LDA pre the establishment of the Olympic Delivery Authority and then post the establishment and what responsibilities will remain with the LDA once the ODA is up and running? Ms Reilly: Certainly. The remit of the LDA is primarily to acquire the land which is not already in public ownership and which is needed for the footprint of the Olympics and that will continue separately from the ODA. The second remit that we have got at the moment is that there are contracts that need to be let before the ODA is in place and they are for infrastructure contracts which are in the process of being procured at the moment, so, depending on when the ODA comes into being, it will either be that the LDA will take on the contracts and abate them to the ODA or the ODA will complete them. Then a third remit, which ties in with the other questions and is much more important and is where we are really focused on, is the benefits of the Olympics. In the LDA's first corporate plan before the Olympics were even heard of, this area of London was one of the six priority areas, so, as the Mayor has outlined, the Olympics was a catalyst to help regenerate that area faster than I think we would have been able to do in normal circumstances. We are very much focused, and have a long-term plan that is focused, on the benefits to the people of London, particularly in the east and south-east. Today, for example, we have launched a £9 million fund that is helping people with skills and helping SMEs in the areas to know how they can win contracts in this whole process. We will be primarily focused throughout the next ten years or so on the employment, the skills, the workforce that is there and how some of the smaller businesses can benefit from the long-term legacy, not just up to 2012, but to carry on afterwards. Q169 Adam Price: As far as anyone and everyone associated with the Olympics at the moment is concerned, I think we are still in the honeymoon period, are we not, but the LDA has been criticised in some quarters for a heavy-handed approach. Why do you think that is? Ms Reilly: I think there has been a lot of vocal comment about this. I think that perhaps it was difficult before we won the Olympics to have a straight dialogue with some of the businesses, for example, because they just did not want to have a dialogue with us and, quite rightly, we forced them to do so, but we have listened to what they have had to say and in fact the CEO met with them a couple of weeks ago and, I think, has outlined a programme. We had a couple of independent people there, and Michael Cassidy was one of them, to make sure that the negotiations were fair on both sides and I have a meeting with some of the businesses on 10 November to listen to them and hopefully hear that there has been real progress because we want to negotiate with these businesses and the people in the areas so that they benefit overall from this Olympics process. Q170 Rosemary McKenna: All of us, as individual MPs in constituencies, are working hard with our local authorities to make sure that constituencies throughout the rest of the country benefit as much as London, or probably not as much, but to make sure that we take advantage, but we are also all London taxpayers, so we have an interest in that as well. Last week at our session, the Secretary of State said that there would be no limit to the potential liability of London council taxpayers in the event of cost overruns. Do you believe, in principle, that funding provided by London council taxpayers should be capped? Mr Livingstone: Well, I have done a deal with the Government and I intend to stick to the letter of that deal. When we did that deal, it was a specific sum on a Band D property of 38 pence a week, £20 a year for ten years and a two-year overrun and in the written agreement it says that if this goes wrong, we will have to come back and review it. Clearly at that stage the Government will have an interest in maximising the income of Londoners and the Mayor, whoever it is, will have an interest in minimising it and I would expect robust debate. At the end of the day, you also have to bear in mind that, contrary to what many of my enemies say, I do not rule like some dictator at City Hall, but the Assembly has to agree the level of precept on the boroughs. You can very well have a robust debate with the Mayor and then find that a two-thirds majority of the Assembly will actually say, "We think the Mayor has got it wrong". Clearly Tessa cannot give you a binding guarantee that there will not be something go wrong, but when Tessa and Seb, myself and the others on the Olympic Board are taking it through, we are focusing on trying to deliver it on time and to budget and we will deal with it if there is a problem. There was a rumour back in the summer that a nuclear reactor had been buried on the site, and this was raised by my dear friend Bob Blackman on the London Assembly with great glee. It turns out that they had a small academic research nuclear reactor, about this size, and it got taken away when the university closed. Anyway if something totally unforeseen happened, we would deal with it, but then I see no great point in myself and the Government having a long-running row about what will happen when things go wrong rather than focusing on getting it right. Q171 Rosemary McKenna: So is it simply a suggestion of yours that one alternative would be to use the VAT and other tax receipts from the Games clearly to meet the deficit? Mr Livingstone: In these robust discussions, I, certainly if I was still there and I suspect that, if I was not, my successor also equally, would want to focus on the question of VAT. Bear in mind that we will be acquiring a large amount of land and some of it will be sold on immediately to developers who will take some of these projects forward, and some of the rest of it will wait until after the Games and will continue to be sold, so we have no way of knowing now what in eight or nine years' time after the Games have gone will be the value then of the land we acquire now as opposed to the costs of the remediation we put in, and I should imagine the Government will focus on that as well if land values have accelerated beyond expectations. Q172 Rosemary McKenna: So would you work with the DCMS then to put your case very forcibly with the Treasury to suggest that there were areas where tax receipts could be used? Mr Livingstone: My relationship with the Government is that 60% of my budget is a grant from government, 30% is fares and the council tax is 7%. Therefore, although the inevitable focus is on this row about the level of council tax, the most important discussions I have each year are about the totality of that 60%. That varies by 1% or 2% and that swamps any change that may be made in the council tax and I have to say that when I was elected Mayor, the government grant to the Greater London Authority was £2.5 billion and now it is £4 billion. We have not had a government that is easy to get money out of, but it has not been averse to responding to a reasoned case. Q173 Rosemary McKenna: And probably in the run-up to the Olympics, a lot more will be spent and it will be spent for the benefit of everyone and hopefully the contribution from the Government will be continued and you will be able to capitalise on that. Mr Livingstone: There is a big change in this debate about London vis-à-vis the rest of the country. When I was elected I inherited a long-running row and this was a local version of Mrs Thatcher's row with Europe about, "We want our money back", in which council leaders in London and London MPs said, "We're subsidising the rest of the country and we want our money back", and, oddly enough, given that the country has got the majority of the votes, this seemed to make little progress. What we now demonstrate is that if you invest in London, the Government gets a greater return which, through tax revenues and job creation, benefits the whole country. London will always make a subvention to the rest of the country. We will argue about how much it should be, but it would be unrealistic because if you saw the Financial Times analysis last week, of the cities and regions of Europe, London is the most productive by a margin of 20% over Brussels and by a margin of 50% over the average. Inevitably, the richest place in Europe has to subsidise the rest of the country, although we argue about paying. I think the inability of my office to have a redistribution of wealth from rich to poor Londoners means that we do not tackle the sort of problems we have got in the East End as imaginatively as we otherwise would. I would rather I had more mechanisms for redistributing wealth in London than argue about what is a fair share of London's economic capacity that goes into the nation. Q174 Mr Evans: I declare an interest as a London council taxpayer, as no doubt some of us are. Mr Livingstone: You are safe in my hands! Q175 Mr Evans: Is it as bad as that! Now I know how David Blunkett feels! Anyway, I am just wondering, Mr Mayor, why it is, if we had not had the Dome, which was a complete financial disaster, if we had not had the Scottish Parliament building, which started off at £50 million and ended up at £500 million, and the Welsh Assembly building as well, which was very, very expensive with huge overruns, and we were told by the Secretary of State last week that these were several huge projects that were going to go on at the same time to build the infrastructure for the Olympic Games, if it was not for all that, then maybe I would not have the deep concern I have got now, that the guarantee should be upfront to protect the London taxpayer. I am not so optimistic as you. After it is all over, and we all want to make sure that the Games are a success, but once the final curtain comes down and we have had the firework display and everybody feels good, are we still going to be feeling good in 15 or 20 years' time if we are still paying off the bill and that is why I ask you, is it not right that the London council taxpayers are protected now and that there is a cap put on them right from the very beginning which would help perhaps to focus the attention of those who are putting contracts in and running the show that it should be on time and at cost? Mr Livingstone: Well, I agree with you, that the record on the Dome and on the Wembley Stadium and Picketts Lock does not inspire confidence and they were a big road block to persuading the majority of the IOC to award us the Games. We did that and one of the things I was able to explain to the IOC at great length when they came was that the projects I had been responsible for had all been delivered on time and to budget. The Congestion Charge was on time and to budget, as were the major roadwork schemes that we have done around London, and you will be glad to know that the extension of the Docklands Light Rail to City Airport will open on time and to budget this December. There is no reason why big projects have to fail. Some fail in the private sector and some in the public sector. The important thing is that you appoint world-class project managers and, therefore, I have to say that this is why I employ so many people who are not British, given that a long period of under-investment, both public and private, in Britain in the 1970s, 1980s and 1990s did not create the cadre of project managers domestically that we have the right to expect. I said quite clearly to Seb and to Tessa that I do not want to see anyone applying for the job of Chief Executive of the ODA who has not been a major player in delivering an Olympics and delivering it well and, no, we are not going to entrust that job to some bright, young spark who is setting out to prove themselves, but we will only consider someone who has demonstrated the ability to deliver public and private sector projects on time. That is the key and then keep the civil servants off their back, and that is the other key, let them get on with it, and I think there is a complete consensus on the Olympic Board that it is not going to be micro-managed in Whitehall. Q176 Mr Evans: Well, that is reassuring. Having said that, you mentioned the Congestion Charge and that started off as a fiver and now people are paying £8 every time they enter London, so there is a huge percentage increase on that. Mr Livingstone: That was a deliberate political decision that I took. It was not a project overrun. I just wished to discourage more people from driving in and it worked. Q177 Mr Evans: That does not surprise me, but the fact is that if these people have the choice on the Congestion Charge, in the main they will not, and they are London council taxpayers. I am just wondering, did you at any stage moot the fact that there should be a ceiling put on it because there is already a margin there for a two-year overrun, so even though people are giving assurances at the moment that there is no prospect of it overrunning and indeed they intend to make a profit and you have still built in a two-year overrun, what guarantees have we got that that is not going to be extended or indeed the amount of money that council taxpayers are going to pay is not going to increase from the £20 average per council taxpayer? Mr Livingstone: There are two separate financial packages. There is the London Organising Committee of the Games which will run and manage the Games and they will get their income not from the Government or from me, but from the merchandising, the ticket sales, the franchising, the TV rights and so on, and they may make a substantial profit and we have argued about how that is split between Britain, the IOC and so on. Then you have the Development Agency and some of what it is going to do clearly, building stadia, is specifically to do with the Olympics, but the underlying work of acquiring the land, decontaminating the soil, undergrounding power lines, putting in the rail extension, all this would have been done in order to open up the Thames Gateway, and the Deputy Prime Minister has been arguing and, I think, Michael Heseltine before him for a decade about the need to open it up. It is really a process which began with Canary Wharf under Mrs Thatcher. In the same way as with Athens in that they did not have to put all the phases in, but they took the Games as an opportunity to modernise their city from being a really rather difficult city to manage to one that is now a clear 21st Century city and a lot of these projects have nothing to do with the Games, but they would underlay what we were doing anyhow. I would simply point out that as you get the contracting regime right, and quite clearly both the public and private sector have often failed in this in the past, you can deliver these projects on time and to budget and that is what we are all focused on because I know I need to get re-elected and if it is going wrong, I am not going to be, and that is one of the benefits of the mayoral system, that there is a clear line of accountability. Q178 Mr Sanders: In relation to the London Development Agency, is there not a danger that other areas of London and other sports facilities in the capital will be significantly neglected during the Olympic preparations? Mr Livingstone: Well, you only have to look at what we are doing at Crystal Palace where the local borough council was considering closing this and myself and the LDA stepped in to take it over and, running in parallel with the Olympic Games, although most likely the sports thing will probably coincide with the Games and the wider park development may take ten years beyond that, we are concentrating in south London on a major sub-regional sport and recreational facility. Both in London and throughout the rest of the country, municipal and private sport complexes have the chance to use the Games to upgrade themselves. There will be 202 teams who will come to Britain, all over Britain, in the weeks and months leading up to the Olympics and they need to be based somewhere where they can train. This will primarily be very much the work locally, I suspect, in brokering deals. Whoever is lucky enough to get the teams of the great and wealthy nations is clearly going to be able to upgrade their local facilities on the back of the needs of those visiting teams. Q179 Mr Sanders: But the LDA intends to put aside £50 million per annum from 2008/09 for five years to fund its possible £250 million contribution if costs overrun. Now, does this mean that for each of those five years you are effectively cutting £50 million from your usual budget and, if so, where will those cuts be made? Mr Livingstone: Mary will deal with the detailed point, but the philosophy here is that the worst poverty in London, perhaps the worst in Britain, is in the area in which Stratford sits. The poorest council in Britain is to the east, the second poorest to the north and what used to be the third poorest to the south, although with Canary Wharf it has moved up a little bit. Therefore, for the LDA this was always our target long before and, I have to say, many people did not assume we would win the Olympics until quite recently, long before the Olympics was even a serious bid backed up by government. That was the focus where the bulk of our investment was concentrated because there is the land potential. You really cannot come along and spend these sorts of sums of money in Croydon unless you are going to flatten several thousand homes and start for a PSI. Here are the sites and here is where investment will come and in London I think people accept the concept that they will travel across the city to work and they will move home from one side of the city to the other. They are not very localised down in their boroughs and they will take the opportunity to come. The East London Line, when it is built, means that for people across south London, for whom getting in is on an appallingly underinvestment-suffering overland rail system, will have a good, modern, high-speed rail link into the East End where these jobs and homes are coming, so we see London as a total whole. Q180 Mr Sanders: That still does not explain why £50 million which might otherwise go into other parts of London is being set aside over this. Mr Livingstone: It would not have gone into other parts of London. The first call on the broad investment programme of the LDA was to develop the Thames Gateway to the east on both sides of that river. What would you do in Sutton? As close as you are going to get in Sutton we have full employment and we do not have the vacant sites to develop. A regeneration agency, by definition, is taking land, remediating it, providing it for housing or for employment, but that land, 90% of the brownfield sites in England, certainly in southern England, are there in that Thames Gateway and that is where our investment was always going to be focused. Ms Reilly: Perhaps I can just add to that. The Board of the LDA, which is primarily a business board, is very conscious that the whole of London needs to benefit from this and we work very closely with the sub-regional partnerships who in any event would not let us forget that and we are working on other priority areas and strategic areas. Wembley is a very good example where we have put a lot of investment in there for the skills and the employment opportunities in another, what is a, very deprived area. I have been working very closely with the West London Business Alliance and have been out to see them several times who are primarily concerned with the regeneration of Park Royal which is another very important strategic area. They are very optimistic and enthusiastic about the Olympics. I went to see them before the decision was made because they see a tremendous opportunity for them in what I was talking about earlier, the skills and the business opportunities that we hope will be created in east London. For a lot of the programmes we are running now and London programmes as well, and that is very much where our focus going forward will be, the £50 million would have been earmarked anyway for east London and that is only less than a tenth of our budget this year. Q181 Alan Keen: Before I ask you a question, I was born in London and I was sent to Middlesbrough to get a proper accent and understanding of the meaning of life, but I have a fair understanding of how people in other parts of the country look upon the Olympics being in London. In my constituency people create a tremendous amount of noise before they land at Heathrow and then they disappear through Feltham and Heston and western Hounslow as quickly as they can to get to central London, but I have an understanding. It is exciting that there is a real spirit of co-operation throughout the country, which is just as well, but is there any formal process or anyone who is actually appointed to make sure that not just west London or other parts of London, but that the rest of the country are involved? Ken, you mentioned very wisely that there has been a commitment in the past with the words, but now you have got a monitoring system for making sure that employment is used locally, but is there anyone responsible for involving the rest of the country? Has anybody got that direct responsibility? Mr Livingstone: That is really a duty both on the Olympic Board and on the ODA. I am meeting later this week with the London-wide business community where we will be discussing their business opportunities, but we will put in place the advice and guidance that the business community need in order to get these opportunities and that will not just be for London. The bid document itself was prepared by a Scottish firm. I was approached by the leaders of the business community in London, saying, "We really want a seminar about how to do this, how to engage, how to exploit the opportunities coming", and I am due to see Keith Mills in the next few days because he perhaps is best placed, as a successful businessperson and as acting Deputy Chair of LOCOG, actually to lead the business community through the opportunities that will be coming. Then there is the wider engagement which I have been struck by. I have been to schools in the Stratford area and I also know that the Conservative-controlled council in Richmond has put in place a sort of pre-Olympics training package for its kids which has been incredibly successful and I am up and down the country and I think we should get in every council area schools saying to their young people, "What can we do to give you extra time, extra training?" and to ask themselves, "Are there youngsters there we can identify now who have a chance perhaps of competing in 2012?" The spin-off from that, when I go into schools, half the kids think they can compete in the Olympics and their hands go up with the enthusiasm of it, so really engaging everybody, I think, is part of the job for all of us and Seb will be storming up and down the country, as Tessa and I will, trying to engage and get that enthusiasm going. Q182 Alan Keen: On that particular point, I understand that Crossrail is not an essential part of the transport system. Is that true or is there a chance of it being involved? Mr Livingstone: We looked at the possibility at one point of whether Crossrail would be ready on time and it would have been touch and go, but also there are huge funding implications still to be resolved. The Bill is now making its way through the Houses of Parliament and that will be a two-year process. We have over 300 petitions to be heard and I do not think the Government will take the funding decision until the end of that process. I can see the value of that because at the moment we are strongly in the down-swing of the business cycle and revenues are tight and I think I might get a decision I am going to be happier with if we take it in 2007 when we should be coming out of the trough of the business cycle and revenues should be picking up. You are talking about a £12-13 billion project which is absolutely essential for London's continued development after the Olympics and clearly there will be painful decisions about how the burden of that is to be shared. Q183 Alan Keen: Coming on to a different issue altogether, I want us to learn from the Olympics and I think one of the most enjoyable times of my previous two sessions on this Committee was having (?) in front of us and having spent five separate inquiries that involved Wembley Stadium, I knew that our then Chairman, Gerald, did not know that Wembley was not going to be the athletics stadium as the inquiry had spent months looking into this and I wanted to ask the question which would have set the steam coming out of the Chairman's ears. I do not apologise for putting the same points I put last week to the Secretary of State, but it is such a mammoth project to get the Olympics successfully produced that unless we do something different, unless we get the IOC to look ahead, how on earth can any less-developed nation than us ever host the Olympics? Now that we have been awarded the Olympics we cannot offend the IOC, so should we learn from this and change it somewhat so that under-developed nations or developing nations can actually play a part in hosting the Olympics in the future? Is it something you would like to look at, Ken, as we go through? Mr Livingstone: Basically I have to say that the period of time when you cannot offend the IOC is coming up to the vote. We could be quite offensive now if we chose to as the boot is a little bit on the other foot, but we have a very good working relationship and there was real enthusiasm as they engaged with the London bid. I do think that this is something the IOC have got to consider. For the fourth richest nation in the world and its capital city, we can drive forward the costs of this without any subsidy from outside our own borders. Basically Athens was the smallest city since Helsinki in 1952 to host the Games and they had substantial European Union assistance, mainly around the infrastructure to modernise the city, and I do think the IOC have to consider to what extent they may need to have a degree of subsidy to any developing nation that actually is thinking about hosting these Games because I think it would be an impossible situation to say to an emerging economy that you will divert billions of pounds of your resources into this one site, this one city and, therefore, I think perhaps the IOC would have to consider, given the volume of income from the TV rights and the merchandising with the top dozen sponsors, whether they will not have to assist in some of the infrastructure works if they are seriously looking for sites in Latin America or Africa for 2016. Otherwise, I fear that you will have New York and Moscow, Paris and Madrid all back again because we are the nations that can afford it. Q184 Alan Keen: That is why I mentioned Wembley Stadium when I started off because had it not been a requirement for the village to be within half an hour's travelling distance of the main stadium, then we could have used Wembley Stadium for the athletics, as it was in 1948, so it is something we should learn from as we go along. I do not mean to be antagonistic to the IOC; it is something the whole world has to take into account and thank you for the answer you gave. Mr Livingstone: When the IOC came to me four years ago asking if I would back the bid because they cannot proceed without the backing of the mayor or the council leader of the host city, they started saying that the choice was between Wembley and the East End and I stopped them and I said, "I am really not interested in looking at the West End of London", because there is not the space and we would end up, like the last time this was considered in 1985 with the Greater London Council under Horace Cutler, where it involved concreting over Barn Hill Nature Reserve for a temporary Olympic village and this would be totally unacceptable. It was not popular then in Wembley and it would be totally unacceptable now. For me, this was about using the Olympics to regenerate the East End as, in the same way for Delanoya(?) and for Bloomberg, it was about regenerating run-down parts of their city and I really do not think it could be justified to divert the sort of resources we are talking about to an area that does not need that regeneration. Third World cities are prime candidates for this, but whether they can do it without some assistance from the IOC and from the merchandising and sale of television rights, I doubt. Q185 Adam Price: The Barcelona Olympics was tremendously successful of course and had the kind of local regeneration that you have just referred to, but at the time of course it also spawned a huge local opposition movement to what was seen as essentially a gentrification of resources, social dislocation and moving out of lower-income families into the margins of the city, and here there are some parallels with the Docklands experience. Do you see that there are dangers sometimes in major regeneration initiatives that actually the benefits do not accrue equally and how can we prevent that kind of gentrification happening this time around? Mr Livingstone: Perhaps I can express my philosophy on this because, as one who was equally opposed to the imposition of the Docklands Development Corporation without any democratic input and with people having five or six generations behind them as East Enders turning up at the LDDC, saying, "We're getting married and we would like accommodation", and being told, "You can't afford to live here anymore", that was not my idea of regeneration. Sir Peter Hall in his analysis of the development about six years ago, which was a sufficient gap then to make an assessment, calculated that for each job created in that early phase of the LDDC, the public subsidy was £135,000. That is not viable for the sort of scale we are looking at and my approach has been quite different. We have all across London run down estates where there are huge social problems and the reason I changed our policy on density is that you cannot say to people who have lived in those conditions, "Now you're moving out and others are coming in". What we have done is we have said to councils that we work with that we want to double the density so that the people who are there will get rehoused, but stay in the area and you get the social mix by bringing in housing for sale, so you do not move people out, but you move people in and you get the social mix that works. That is the only way and I would not be interested in any other way of taking this forward. That is certainly what will lead the view of the LDA and my office and the ODA and LOCOG. The East End of London has been left behind for 30 years with the collapse of the docks, the collapse of Woolwich arsenal and really all governments and civic administrations have largely failed that area. We are not saying to them now, "We've got a good idea, so would you mind moving?", but they are getting the benefits and we will move more people in. These are not areas of high-density population. London is the lowest density of any major city in Europe and what it is is bad planning and poor transport links that have left it behind, so we intend to do what we can to keep the local people there and give them opportunities. Q186 Janet Anderson: The LDA is responsible for acquiring the Olympic site through its CPO powers, if necessary. How much have you set aside for total land acquisition costs, including compensation for disturbance and relocation, as well as perhaps professional fees of those companies that you have to move and what will happen in the event that you have underestimated these costs? Can you dip into that £250 million that you will be stockpiling from 2008? Ms Reilly: Originally when we looked at this budget we set aside £478 million. We are now reviewing those budgets and reviewing the fact that we want to acquire more land for relocation. The remediation in some of the areas is deeper and longer than we thought, therefore, we have not yet finalised the budget, but we are looking at some worst-case scenarios of, "What if this goes wrong? What if it takes more to remediate?", et cetera, and we are happy, as a board, that that is within the resources that will be available to us. We may of course have to do some borrowing and certainly we will have to do some land disposals at a time that is suitable for those, and those are ones outside the Olympic area, so we are broadly happy that the resources are there with our extra requirement ---- Q187 Janet Anderson: To deal with it? Ms Reilly: Yes. Q188 Janet Anderson: And how are negotiations progressing? I think in September you indicated that you had signed some private contracts with 24 out of 284 businesses. Are negotiations now progressing more smoothly? Ms Reilly: Yes, they are. Basically there are 284 businesses and 150 of those have appointed advisers because, as you know, we are going over and above the CPO process and have offered to the businesses that we will fund their legal and surveying fees, so 150 of those have now taken up advisers. We have 32 agreements in principle, so an advance on the 24, and of those 32, we have 22 who have signed heads of agreement. As I have said, I am meeting some of the businesses on 10 November and some are still sitting, waiting to see what happens, but the fact that we have engaged with 150 of them in one form or another suggests that the momentum is increasing now. Q189 Janet Anderson: Do you think they will all stay in London or might some of them move outside London? Ms Reilly: Obviously we have two quite separate processes. One is the CPO process, but we are trying to encourage the businesses to relocate within that part of London. We certainly have enough available space and there are other councils who have come forward and said, "We've got some space if they want it". We cannot force them to relocate, but we are very anxious to give them a package that is as favourable as possible to make them stay within this area and I think we have had good indications that most of them want to stay in that area, so it is just fine-tuning the precise location for them. Q190 Chairman: Of the 284 businesses, some may find it relatively easy to relocate, particularly if they are subsidiaries of big companies, but the small firms are going to find it hard and expensive and they are going to have to look at the costs of finding an alternative site, adapting that site to their needs, relocating their staff and relaunching the business. Can you give an assurance to those companies that all those costs will be met? Ms Reilly: I can give an assurance that we will look at what are reasonable costs. Clearly with some of the businesses we have to look at what they are asking for and think about whether this is reasonable to be paid for from the public purse because the CPO process, as I have said, we will be giving them market value on the land and whatever else we are acquiring and we will be going over and above our legal obligations by helping them with their legal and surveying expenses, so when it comes to relocation, we will be looking at those businesses and assessing what their needs are and clearly trying to come to a reasonable agreement. This is our preferred option all the time, to negotiate, and there are some people with whom we have got agreements in place and we have got a fair idea of what some of the businesses want. With some of them, if you look at what they are asking for, you have to say, "Let's be reasonable. Let's find a middle ground". Q191 Chairman: Following that up, let me give you an example. FH Brundell Wire Mesh & Company is a relatively small firm, the success of which has actually been built on the fact that they are located where there is a lot of traffic passing, construction companies who stop and acquire materials from them. They have had to try and find alternative premises, but they have found it very difficult to find anything which offers them the same advantages as the premises they are in at the moment and they also estimate that the difference between the amount of money that is on the table for their premises and what it is going to cost them to move and to set up again is something like £2 million. Now, when you come to examine claims of that kind, would you consider appointing some kind of independent arbitrator who will be able to reach a judgment and then provide you with what they believe to be a reasonable cost that you should meet? Ms Reilly: First of all, under the CPO process, if they are not satisfied with the amount that is offered, the process allows for an appeal to the Lands Tribunal, so that deals with that. Secondly, yes, I think it is very reasonable. I am an accountant myself, so I would think it is only fair if somebody comes along with a proposition that we ask our advisers to look at it. I think it is a very good way forward and that is actually one of the things, in talking to the businesses, that I am prepared to do. Q192 Chairman: But the Lands Tribunal presumably is simply looking at whether or not it is a reasonable price you are paying for the land? Ms Reilly: Yes, sorry, I was answering the second part of your question which is the additional compensation that will be required for moving a business and put it in a like-for-like position and the answer I gave to the previous question, which I would reinforce for this one, is that we need to look at, "Are those requests reasonable?", and it is quite clear that there are people out there who will be able to help us assess those, and we will negotiate this. I cannot talk about specific businesses because I do not actually have that detail to hand, but those are the sort of questions when I referred earlier to meetings my CEO has had that I am now taking forward with some of the businesses so that we can have a look at what is being asked. I agree, it is an ideal way to get independent advisers to look at issues like that where there are some differences to try and find a way through it and at the end of the day if the case stacks up, then we will have to look at that on a case-by-case basis. Q193 Chairman: But there are bound to be disputes of this kind. Ms Reilly: Yes. Q194 Chairman: It is helpful that you say that you are seeking independent advice, but is there not a case for going further and saying that there should be some kind of binding arbitration process carried out by an independent assessor where a dispute of this nature arises? Ms Reilly: Well, I would need to go back and look into whether we need that. I am hoping that we can negotiate those differences and come up with an acceptable compromise. We have got to be wary obviously, as the Board of the London Development Agency, that this is public money and we cannot just throw it around, but equally we need to recognise that businesses, such as the one you have described, have got a legitimate concern and, therefore, we need to look at what we can do within our resources and availability. I think that setting up an independent arbitrator probably is not necessary. Certainly, as I have explained earlier, we have got some independent people who have come along to the meetings and we have recognised expertise in these areas and have had fed back to us that it seems to be that the differences are closing and I am hopeful that we can negotiate. I would rather seek independent advice with the consent of the business where we say, "Who can we get to look at this case?" and then just come back and test the assumptions and the quantity rather than set up an arbitration because I think that would be a bureaucratic process which would not, in my view, help move things forward. Mr Livingstone: There is another factor in this, that if there is such a failure and such protraction that the firm then closes, it is entitled to a lot more in terms of its being forced into liquidation by this process, so it might get five to ten times that, so that is a real pressure on the LDA to find a deal. With all these firms, if we could not remove them, it was protracted, and then they went into liquidation, the costs would be absolutely amazing, so that is a very strong pressure on the LDA, and actually most probably more of a pressure because it carries real financial penalties than having some complex independent arbitration procedure. It is not that the LDA is sole master in this domain; there is the Lands Tribunal on the one side and the real financial costs of failure to agree when you get into the costs of a liquidation of a business. Ms Reilly: And, as I said earlier, the Board of the LDA is a business board, so they understand these pressures and they are putting pressure on to the executive officers to sort these problems out. Q195 Paul Farrelly: I just wanted to explore something which has already been touched on briefly which is trying to ensure the maximum spin-off for business and employment in this country from the Olympics. There is a general feeling that we might not be as robust in this country as the French or the Italians or the Germans in making sure that our firms and people do benefit to the maximum. Last week in evidence, the Secretary of State predicted that about 550 contracts would be needed and that most would be of sufficient size to fall within the procurement law and regulations. Ken, my notes here say, to pick up some comment you made to the London Assembly in a Plenary Session, that you would get the best legal advice possible to make sure that those regulations were interpreted in such a way as to guarantee we got the maximum spin-off. What thought has been given to this issue and what approach are you taking? Mr Livingstone: There are two stages to it. From now until the summer of 2008, we will be acquiring land, remediating contaminated sites, clearing them, preparing them, and at the same time there will be the design competitions and the awarding of contracts for building all the major stadia. Now, there are not that many firms in the game for undergrounding power-lines or building Olympic-sized stadia and that is not, I think, where the real focus is, but it comes from that area of LOCOG. There is this huge debate about whether it is private or public, but effectively LOCOG will operate as a private corporation with the input of people like Keith Mills who understands the business dimension. As I said earlier, I am meeting the Business Board of London, all the three business organisations, the London regions of the CBI, the London Chamber and London First to take them through this, so we have a year or two to put in place getting it right for that wealth of contracts of a much more varied size and not specifically geared to construction, but which are going to flow out of the LOCOG process. Therefore, it is not like it is all being let now and there is a great panic on. Most of this stuff will not start coming into play until much closer towards the actual Games themselves. It is not like we let the £70 million contract for undergrounding the power-lines as we are just not going to be in a position to go up to about 50 jobbing builders in Hackney and say, "Can you club together to do this?" as these are real skills, but there is no doubt that collections of small firms in London and nationally can come together and jointly bid for one of the smaller contracts that LOCOG will be handing out over the run-up to 2012. Ms Reilly: This is an area where obviously the LDA is very focused and, as I mentioned earlier, we have kicked off today with the £9 million funding that is going to help businesses, particularly SMEs, get ready to apply for these jobs and it is a programme we have been doing anyway, but we are ramping it up across London and particularly the east and south-east London. We have talked to people in Manchester asking them what they did for the Commonwealth Games and we have talked to people in Sydney and Barcelona, asking, "What worked for you? How did you get local businesses really engaged with this?" I actually sit on the London Business Board because I am currently Chair of the CBI Regional Council for London, and this is a very key area that they are all involved in as well. We have been talking through with them ideas about how we can put together a prospectus, for example, for businesses in London so that people will understand. Another initiative we are doing is we are setting up a website that will actually tell businesses what is coming on-stream, where are the opportunities, and there are lots of opportunities. For example, there will be 6,000 construction workers and I read the other day that they will need something like 120,000 bacon butties a week or something, so there is obviously a contract for local catering businesses there and there are other issues like that. We are very much attuned to that and are setting up the process so that businesses will know how to procure. We are coming up with a procurement code that has now been shared with the five main boroughs and the London Business Board has had a look at that, so it is trying to make it user-friendly for people for whom procurement codes are not everyday occurrences. We have tried to identify the opportunities that are coming other than just the huge construction ones. Q196 Paul Farrelly: We would like you to be as robust and as helpful as possible, but, Ken, on my patch when there is a £500 million hospital, I like to see them using Staffordshire brick and Staffordshire pottery wherever necessary. In London with a project of this size, we would like to see that robustness and help given to firms across the country and, if I can pick you up on one contract, Ken, where I think you expressed some regret, the Congestion Charge contract with Capita, actually a lot of the employment spin-offs went to Coventry where the call centre was and that was not something you would repeat. How are you going to reassure people that, whilst being robust, you are going to be allowing access to firms across the country for these sorts of opportunities? Mr Livingstone: The position on this is that there will have to be an open tendering process. Much as I, as a London politician, would like to pass all the jobs out to Londoners, clearly the Government would not be happy with that and I think most probably it would not be legal anyhow even if I did employ some good lawyers to try and find a weasel way of words to achieve it. I think there is going to be enough there for every region and major city in Britain to get some real benefit. I do emphasise that Keith Mills with his background, having created success for businesses, will most probably be best placed to actually lead the education process for businesses in Britain about the way to wise up to the opportunities of all of this. It might be useful if I send the Committee for you to look at the form of the contract that we have just done on the East London Line, particularly those clauses that take employment and local labour forward, because I think you might have an interest in that, and also the LDA's document, if you have not had it already, about sustainability and procurement that we want to underpin the Games because we have got time to talk this through, hear your advice and then amend it and then get it right before these contracts start. Q197 Paul Farrelly: I have just one final question on the employment angle in this sense. Clearly in the UK we have not got a limitless supply of cheap labour, as they have in building the Peking Airport, and I know in London that many people breathed a sigh of relief in the construction industry when EU enlargement came along so that there were not hordes of Polish workers and people from the Czech Republic and so on and so forth employed here illegally all supporting the London construction industry. Could I ask what estimates have been made of the number of workers and the different types of skills that will be needed and, within that, what assessment has been made of the possible knock-on effects on other construction activity in London or indeed around the rest of the country? Mr Livingstone: The first thing to start with is that this Olympics is in this area of high unemployment and for some people they have never had a secure job since they left school and they are now in their 40s. There is there a cycle of under-employment that is being passed down from generation to generation, I suspect, starting with the failure of the school system to give the kids there the skills they needed to get the jobs. Therefore, the LDA has been working for well over a year now towards putting in place the expansion of the training for local people in the area in these construction jobs coming because the cultural bridge we have to cross here is that we are dealing with people, black and white, who are all suffering high unemployment and the defining issue is their class. They are working-class boys who went through school, thinking they would sell their physical strength and they then discovered that that world had left London. Here is a chance and we would like to see that we could train these people to work in offices, and some of them will through the Learning and Skills Council work, but for many of them this will be the best chance they have ever had and the LDA has been doing a lot of work with the Learning and Skills Council and local colleges to make sure that we ramp up the capacity of the industry because, as I understand it, at the moment inflation in the building trade is running at 8% a year. Now, that suggests to me that we are not getting the supply of workers through, as one factor in this, to keep these costs down and it is in our interests to actually undermine the inflationary pressures by actually getting a real throughput of skilled workers from the local area. One of my first decisions as Mayor was to agree the creation of a Serbo-Croat labour camp in Heathrow for the construction of Terminal 5. That whole community has been brought in from abroad and given their own small temporary city for constructing Terminal 5 and an entire Serbo-Croat community, and Kosovan as well, is all down there. I have nothing against Serbo-Croats or Kosovans, but I would like to think that people who have really never had a secure job in the East End of London have a chance now to get these. Ms Reilly: In fact, again, another initiative we have just set up in the LDA is a specialist construction employment sector, so we will be working with the contractors and sub-contractors helping them to recruit local labour and the diversity of labour that is required in the construction industry. Indeed, most of our successful initiatives in employment areas have been where we have gone to the industry sector and through the employers and asked them "What are the skills that you need?" so it is demand-led rather than supply-led. We have had a lot of interaction with the construction industry and it is one of the first initiatives we are kicking off. Q198 Mr Hall: Can I just change tack slightly, the International Olympic Committee place very strict restrictions on advertising to protect the intellectual property of the Olympics itself, and there is a certain byelaw to maximise their own income from advertising. What is your view about how we are going to help local bars, clubs, pubs, market stall traders to associate themselves with the Games and not fall foul of the restrictions the IOC want to place upon them? Mr Livingstone: Basically it will be managed by LOCOG, you will not have a heavy-handed IOC over in Switzerland issuing these edicts to the little local Greek taverna that happens to be called The Olympia. I have to say I think the IOC have got this right. When you look back at the bidding of the American networks for the Moscow Games, people were talking about a million here, a million there, you are now talking about hundreds of millions of pounds and that manages to mean that we keep ticket prices at a reasonable level and the actual running of the Games usually makes a profit. They restrict it to a dozen what they call top sponsors, obvious ones like Coca Cola, McDonalds, Nike and so on, and that also brings in a huge sum of money. The shadow LOCOG is negotiating with our share of that. We are in there arguing about how many hundreds of millions we get to subsidise the running of the Games in London. We would like a billion, thank you very much, they would mostly like us to take a few hundred million. We have only got that because a very far cited long term strategy has been put in place to take it out of the hands of local negotiating committees and have a professional core of people develop the skills to really screw the maximum amount of money you can out of sponsorship for this. Below that, LOCOG will manage basically our national sponsorship and, therefore, it has to be run by people who are UK-based and are UK citizens and understand the needs locally. We are not going to have some new Gestapo stomping around, tearing down people's hoardings and so on. What we want to avoid is the gross situation that there was in Atlanta where NBC, Dick Evershall, instructed his camera crew never to have a shot of the city in the background because it was so grossly offensive. You can cheapen this to the point where you lose the rights but it will be managed sensitively. These are all my voters, I am not going to offend them, whether they vote for me or not! Q199 Mr Hall: The London Olympic Bill enshrines these restrictions in domestic law and places the responsibility for policing that on LOCOG. Will you have any locus over LOCOG to make sure that we do have sensible approaches to this and people who are used in 2012, or various other things associated with the Olympics to try and associate their business with the success of the Olympics, are not going to fall foul of the law? Mr Livingstone: I have one appointee to LOCOG and this is one of the things that they will focus on. I have discussed this with Keith Mills because this is an issue which has come up. We have had some quite alarming statements from the advertising industry about how it would all be appalling but we will take a very sensible approach on this. The objective here is to allow everyone to maximise the benefit but without it all going so over the top that we all feel it is a bit shameful and a bit tacky on the day. What is amazing about Athens, every time my wife went to Athens it was a city disfigured by illegal hoardings, you could hardly see the vistas of that great old city, whereas the morning I arrived at the Games they were all gone. It was absolutely brilliant, you just say "What a beautiful city this is" when advertising is the right balance, and we want to make sure we maintain that. Certainly I will make sure as long as I am there that the focus is on this being a sensible approach without having heavy handed nonsense about "You have got to change a hoarding you have had up there for 30 years". Q200 Mr Hall: We have talked about bringing the benefits of the Olympics to London and the regions of the UK, and you have been very positive about this in terms of local employment. There is a view that we have not got the skills in tourism to make the benefits which should accrue to us and what are we going to do to tackle that skill shortage in the tourism industry? Mr Livingstone: When I was elected we had this board called Visit London and it was hopeless, and I have to say I still have some criticisms about Visit Britain. I think there is too much of an idea that if you stick a Beefeater on it or Buckingham Palace they will come, they will not actually because they know the Beefeaters and Buckingham Palace will be there forever. You can only market a place like Britain - where they are not coming for the weather, it is what is happening now - what is it we are putting on this month that you will never get the chance to see again? Since we have taken that approach with Visit London we have managed to double attendance at festivals and events in London by really skilful marketing. There is always going to be the background of great historic things, and you can do those as well, what gets people off their backsides thinking "I will go to London next weekend" is if we have a very good offer about something which is most probably unrepeatable. That is what we have got to do in terms of the whole marketing. Mary may come in on this as well, in the same way as we have with the building trade, we just have a skill shortage. At the top level, our hotels are brilliant and world-class but there is a rather tacky deal on offer, I still think, for a lot of the middle-band. Compared with the world-leaders in this, and I think of American hotels, middle ranking hotels that the average family can stop in, they offer a very much better deal than we can in this country. Now part of that is price but also part of it is an approach to service. I think that is something where, in terms of our training in this area, we need to put better training in place, we also need to encourage some of the major providers of the tourism industry, whether it is hotels or events, that they have got to up their game in the calibre of training of their staff. Q201 Chairman: Can I thank you both very much for giving up so much of your time. Mr Livingstone: I enjoyed it. Chairman: I am sure we will want to talk to you again in due course but, in the meantime, good luck. Witnesses: Lord Moynihan, a Member of the House of Lords, Chairman, Mr Simon Clegg, Chief Executive, Ms Sara Friend, Director of Legal Services, British Olympic Association and Mr Mike Brace, Chair, British Paralympic Association, examined.
Chairman: Good morning. I am sorry to have kept you waiting whilst we finished the previous session. Can I welcome our four witnesses for this second part of the inquiry: Lord Moynihan, who we should also congratulate on his election as the new Chairman of the British Olympic Association; Simon Clegg, the Chief Executive of the BOA; Sara Friend, the Director of Legal Services and Mike Brace who is Chairman of the British Paralympic Association. Welcome to you all. Can I invite Alan Keen to ask the first question. Q202 Alan Keen: Many people have contributed towards winning the Games that we are all so thrilled about, but we would not have got them had there not been a respected British Olympic Association there to start with so congratulations and congratulations to Colin as well. The Chairman of the BOA has a seat on the Olympic Board but the British Paralympic Association has not, is that something which should be addressed? Mr Brace: Certainly I think there need to be adequate links in there because I think the two Games will have a life of their own developing, and I think the closeness of the links would need to be developed but also the specific issues affecting the Paralympic Games would be strengthened by some form of either ex officio or linked representation on the ODA. Lord Moynihan: Chairman, firstly, thank you very much for your kind opening words. Mike and I have already been in discussion about the importance of very close co-operation with the British Olympic Association and the British Paralympic Association. We intend to strengthen that relationship. As structured currently certainly we see the Chairman of the British Olympic Association's role on the Olympic Board as one of working closely with Mike to represent the interests wherever we can of the paralympians. That is the result of a structure which I have inherited. Suffice it to say the close co-operation between the BPA and the BOA is something we value and treasure and regard as absolutely essential. Q203 Alan Keen: Has anyone been specifically given the role of letting the British people understand that there is a paralympic context going on as well? The way the public think about people with disabilities has advanced tremendously in the last few years, but there are still lots of problems obviously. Is there anyone with that specific role to involve the public and let them know it is a key part of the Olympics? Mr Brace: Not as yet. I think the development through LOCOG - I have a place on LOCOG from the Paralympic Association - as we put more of the structure in place, both within LOCOG in terms of the delivery of the Paralympic Games and obviously the linkage that Colin mentioned earlier on with BOA in terms of making sure that there is either a joint message or a specific message that is appropriate to the Olympics or the Paralympics I think will be quite an important aspect, especially with the extensive BBC coverage we have had and we will expect to have through Beijing and then on to 2012. Q204 Alan Keen: Jumping from the beginning of the Olympics right to after the Olympics, it is forecast that there will be a £100 million surplus of which 20% goes to the BOA, will some of that money be going to the Paralympic Association? I know we are projecting a long way ahead. Lord Moynihan: You are looking into a crystal ball with greater accuracy than we can at the present time, Alan. Suffice it to say that we will be working to ensure that there is an operating profit, as substantial an operating profit as possible. One of the reasons why we are represented on LOCOG is it is interesting that recent Olympic Games, for example Athens, made an operating profit despite the very high costs that they faced and that split of the operating profit was a 20:20:60 split. 20% goes directly to the British Olympic Association, 20% goes to the International Olympic Committee and 60% on the advice of the British Olympic Association is spent on projects within the United Kingdom. Now it seems to me wholly sensible that as we move forward into discussion over how that 60% is spent that the enormous contribution that paralympians and the British Paralympic Association make should be fully reflected in deciding the spend of that 60%. Q205 Alan Keen: You heard me ask a question earlier on about the future of the Olympics and I have asked you before. Are there talks in the IOC about looking differently at the bidding process rather than the bidding process directly going in to subsidise and help developing nations to host the Olympics? It will mean changes to the way the Games are run, of course. Are there are any talks going on and certainly, if there are not, will you be pushing this in the future? Mr Clegg: I have to say our plate is somewhat full at this moment in time in terms of concentrating on delivering Team GB in 2012. I think it is worth recognising, also, that the International Olympic Committee do make a major contribution through the Olympic Solidarity Programme to developing nations. What the IOC needs to protect, obviously, is the value of its brand because by being able to drive a major commercial sponsorship through the brand, through the worldwide television rights, that provides them with the funding for Olympic Solidarity to run the thousands of programmes that they run each year across all 202 national Olympic Committees, particularly focused at developing nations. The IOC was in a very fortunate position of having five of the world's leading cities aspiring to host the 2012 Games and that is fantastic for their brand and for the future of their brand. There is undoubtedly a desire to take the Olympic movement into parts of the world which to date have not hosted Olympic Games, particularly into Africa and South America. I am sure there is a good chance that we will see strong candidate cities coming from those two continents in the future but I think it would be wrong at this moment in time for the IOC to insist that it would restrict its candidate cities in future bidding contests to a particular continent. Q206 Alan Keen: We have got a new Chairman of the BOA, will he be looking at this in the future? We are preoccupied at the moment I know with our own preparation but if it is going to inspire young people in this country how much better will it be even to inspire young people in a developing nation? Lord Moynihan: There is no doubt that in the bidding process Seb Coe recognised that very strongly. It was one of the most attractive features of the presentation which focused on that, that this is a world movement, that this needs to inspire the young people to be involved in sport across the globe. That was a very compelling message and one well delivered. I do endorse what Simon has said, that the IOC is very active on this front. Is there room for further work to be done? Yes, there is. Has it been on my agenda in the last three and a half weeks since I arrived in the job? It has not yet, Alan, but it is important it is not missed as a result of that and certainly it will be something that Simon and I will look at closely in the future. Alan Keen: Please do not take this question as antagonism, I am as thrilled as a nine-year old in East London about the Olympics. Q207 Mr Evans: I would like to congratulate you too, Colin, on your new position but I would like to go, if I can, back to the structure of the BOA. The elections were about three weeks ago. Now the BOA, if I understand it rightly, are an independent body, a charity, no government funding? Ms Friend: No government funding, no National Lottery funding, but we are not a charity. We are a company limited by guarantee, a not-for-profit organisation. Q208 Mr Evans: During the elections which just took place, Simon, can I ask you whether you were surprised at reading some of the reports in newspapers about people being lobbied heavily during that period by Government? Mr Clegg: By Government? Q209 Mr Evans: Yes? Mr Clegg: It was a democratic election and everyone had the right to lobby the various candidates. I think we were in a privileged position of having two outstanding candidates for the post of Chairman. At the end of the day the individual voting members of our constituency, the national Olympic Committee members from the 35 Olympic sports, within the secret ballot elected Colin as our new Chairman. There were people out there lobbying for different candidates, and I do not have a problem with that as a matter of principle. Q210 Mr Evans: Do you think it is right that anybody should be acting on behalf of the Government to lobby anybody against one candidate or for another? Mr Clegg: I have no evidence to support that suggestion. Q211 Mr Evans: Can I ask you, therefore, have any of your voting members reported to you that any discussions took place between them and either the Government directly, ministers or, indeed, anybody acting on behalf of the Government? Mr Clegg: Some of the voting members have had discussions with me relating to approaches made to them by members of the sports councils and members of the various institutes. Whether you class those quangos as being related to Government, I am not sure; by their Royal Charter they are independent of them. Q212 Mr Evans: Can you put a little more meat on the bones then and tell us which sporting bodies contacted your voting members and lobbied them? Mr Clegg: All I can tell you is discussions did take place between some of my voting members and representatives from UK Sport and the English Institute of Sport. Mr Evans: Do you think that is appropriate because you can argue that they are representative of the Government? These are bodies funded by the Government. Mr Hall: They do not represent the Government. Q213 Mr Evans: They are funded by Government. Mr Clegg: The sports councils were established to represent sport to the Government, and, therefore, it is entirely appropriate that those people with an interest in sport and ensuring that we succeed in this process have the opportunity to voice their views. Whether those were taken on board by the voting members or not, I am not sure. Q214 Mr Evans: Can I ask the Chairman, therefore, this question: what was the mood during the period when this election was going on? Did you have any evidence that there was any lobbying going on? Lord Moynihan: I read in the media that there was a quite a lot of activity going on in the wings, I was unaware of it personally. I take the view, Nigel, that the BOA is an independent body. It is not funded by Government. It has always been robust in maintaining and treasuring its independence back to the days in 1980 when Government sought to encourage it not to send a team to the Moscow Olympics. It was fiercely independent of its position then to consider that advice and then decide to leave that to the governing bodies of sport. Its independence is well documented through history. On this occasion I do not think, if any of it was true, and I have no evidence to suggest that it was, it would have been a constructive way forward for a government to move in a direction of this type. If anything, it would probably have been counter-productive but, as I said, that is pure speculation. Q215 Mr Evans: Can I ask you, finally, on looking towards the Olympics, is it part of your role as Chairman to look at some of these sporting bodies as well and to make recommendations about the way that they are organised in order that they may perform better themselves in the run up to the Olympics? Lord Moynihan: Anything that can improve the delivery of services and funding to the sports men and women in this country, particularly as far as the British Olympic Association is concerned, the Olympic governing bodies, is a matter of concern and interest to the British Olympic Association. Yes, as part of the wider legacy of ensuring the passion and the tremendous support for a host nation for the Olympic Games delivers, then it is important that we make sure we have a fit-for-purpose sports policy throughout the United Kingdom which matches the tremendous achievement the Prime Minister and Lord Coe and his team put in in Singapore. It has to match the great challenges we have ahead of us now to deliver success in 2012 but also to benefit from the wider legacy of ensuring that the quality of sports provision in the United Kingdom and the importance given to sports policy in the United Kingdom is significantly increased. Q216 Mr Evans: We can expect some recommendations then to the Secretary of State? Lord Moynihan: We are always open to have constructive discussions with secretaries of state of any party, whoever is in government at the time. I should add the relationship with Tessa in the last three and a half, nearly four weeks now, is strong. I think we all recognise that to have a successful Olympics we should stand aside from party politics and put the interests of the sports men and women first. That remains my very clear objective and I am working well with Ken Livingstone, Tessa and, of course, Seb Coe. Q217 Paul Farrelly: I am very glad we have now started to use the precious time that we have got to move on to look at the future success of the Olympics rather than score historic political points. Can I ask Mike, I have just been reading your CV, it is phenomenal and it strikes a chord with me because my son is seven and he is growing up and going to a Hackney school, and we are trying to improve the facilities there so all the children can look forward to the Olympics with as much excitement as my friend Alan here and every nine-year old boy and girl in the country and the capital. You have done phenomenally well in Paralympics in the past, it is outstanding what disabled sports people have achieved in the Paralympics. What is your goal in terms of not just medals and numbers of entrants but the legacy for disabled sports and the Paralympics in this country at these Olympics that are going to happen in London? Mr Brace: I think there are probably three key ones. The first is the inspiring images that paralympic sport can give both to people who themselves have a disability and then can aspire to achieve things which they had not thought of but also the major changes in the barriers and the equality issues. Many of the barriers are placed in people's minds against opening their perceptions of disability and looking at ability. The social model of disability is someone who is blind, they have an impairment but it is society that disables. I do think the Paralympics have a massive power to challenge that thinking. I think the second area of a major challenge is the inclusion of people with a disability in pathways to sport and recreation. As a ten-year old the thought of not being able to do sport was more important to me than almost my blindness. It was so important that I wanted to do the things that everyone else was doing and have those opportunities. It is access, it is all the issues to do with facilities, but it is the pathways for inclusive education. We do not have the pathways to get the other disabled people into active sport within the schools very often and then through sports colleges or external events programmes into league programmes and on to the Paralympics. The legacy for me would be a pathway where if you are a seven-year old youngster in a wheelchair in Hackney, you should have a very clear opportunity at some stage when you find the sport that you are interested in into some sort of programme that eventually will allow them to be in the wheelchair basketball team or a track athlete; that would be the second one. The third thing is the whole structure. There are ten million people with a disability in the UK, you are looking at 15% of the population who have some form of disability, why is sport not a major opportunity for most of those, and that is around the opportunity and infrastructure. Q218 Mr Hall: Lord Moynihan, congratulations on being appointed Chairman of the British Olympic Association. I listened to your statement on the radio and if I recall your words you said one of the challenges would be to move ourselves from being tenth in the medal place to fourth. If I have worked this out correctly, that means that we have to field more athletes if we are going to compete in the 700 sports which are available, an extra 429 athletes will have to be found if we are going to reach the goal of fielding 700 Olympians. Have you worked out how much it is going to cost to get us to fourth in the medal table? Lord Moynihan: Again, thank you for your kind opening words. The answer to your question is we are in the process of finalising the budget and, if I may, it may be helpful to the Committee if I run through that process and where we are at the present time and the timing of that. The Olympic Board have requested the British Olympic Association present to the December Board, which is on 15 December, a costed programme to support Team 2012. That paper entitled Clearing the Bar will be finished in advance of that point in order to have the support of the Executive Committee of the British Olympic Association which will meet on 7 December. To get from where we are now to there, we need firstly to sit down with all the governing bodies, the Olympic summer governing bodies, to assess their requirements. When I say "assess their requirements" I am talking about the staffing, the coaching - the coaches are the centres of excellence - the management, the administration, the medical, the scientific support behind that, the international training in competition, the athletes' personal awards, UK high performance centre usage, in other words the comprehensive package that is required in order to support the team in 2012. Yes, we will need to move significantly forward from 270 athletes that we fielded in Athens to, as you rightly point out, a figure closer to 700. In fact, it will be above 700 in our current calculations, 720. It is not quantity that matters, it is quality that matters, so those athletes would need to qualify in order to participate in the Games in 2012. To reach the figure that we will need to conclude in the next four weeks, we will continue to work very closely indeed with UK Sport. UK Sport has been very active in working with the British Olympic Association, going round to see the governing bodies, using a performance-based model which has been a very constructive and critical model in the context of working the funding requirements out. I think it is best summarised as work in progress. We are about three-quarters of the way through the discussions with the governing bodies; we have more to complete. Clearly within each governing body, Olympic governing body, there is an elite performance cell. That elite performance cell has a performance director associated with it and the performance director is critical to this process, as are the coaches. It is essential as far as the British Olympic Association is concerned that when Clearing the Bar is presented to the Olympic Board and subsequently presented to Government that it is agreed by all the summer Olympic governing bodies. There will be no point in coming to a figure that says collectively we can achieve fourth in the Olympic medal table in 2012, if suddenly hockey or athletics, for the sake of argument, woke up the following morning and said "Hang on a second, we are not going to be able to contribute in the way you would like us to do on that budget". It would need to be robust, it would need to be capable of detailed analysis by this Committee and other committees in Parliament. It requires a significant amount of work which is underway at the moment. I emphasise that it is being undertaken in partnership with UK Sport, that is right and proper and they have significant expertise which has been very helpful to us in this process. We are on target to complete that work, Chairman, and we intend to make sure that it is presented on time. It is a budget, as I say, that must be robust and bought into by the Olympic governing bodies which ultimately will be responsible for performance on the day. The final point I would make in answer to your question, Mike, is that consistent funding is essential. We cannot have the situation whereby a governing body receives funding one year and maybe gets what they are expecting in year two but then loses out in funding in year three. If we are going to compete to come fourth, and we believe that is a realistic target to achieve, it is a tough stretch but it is realistic - it should be a tough stretch but it must be realistic - then we need consistent funding over the next six years. That is absolutely essential. If we are going to contract with the best coaches in the world, if we are going to provide the best sport facilities, that base line budget must be agreed and the governing bodies must be confident that there will not be a move away from that base line budget in recruiting the staff necessary to move from tenth to fourth in the medal table. That is the current position. We are working hard both within the BOA as well as with UK Sport and with outside experts to make sure that model is robust and that Clearing the Bar will achieve not only what it says but be widely accepted by your Committee and the sporting world in this country. Q219 Mr Hall: You do not receive any Government funding nor commercial funding, licence fees, various other means of income. There is going to be clearly a substantial increase in expenditure on getting our Olympic team ready for 2012. Are you expecting DCMS to come up with that money or are you expecting the Lottery to come up with the money or are you expecting these income sources to come from elsewhere? Have you looked at trying to engage in more sponsorship on the back of the Olympic bid? Lord Moynihan: I described the funding that is required in Clearing the Bar as base line funding. It is expected that that baseline funding will be a combination of Lottery funding and Treasury funding. However, it is critically important that we continue to access sponsorship opportunities within the constraints of the agreement that the BOA has reached with LOCOG. It is important that we make sure that the governing bodies maximise the funding they can get both from private sources and from sponsorship, again within the very clear constraints that the Mayor outlined just now in terms of the contract. Clearing the Bar has the baseline figure which is expected to come from Lottery funding and Treasury funding, it is clearly a matter for Government to determine the allocation of those resources. That is one of the reasons why it is so important for us to work in close collaboration both with UK Sport and the DCMS, which we are doing. Q220 Mr Hall: I have just got one more question: Mike, we have been absolutely delighted with the performances that we had with the Paralympics, certainly in Athens and Korea. We do exceptionally well, I think we probably outpunch our weight in terms of the Paralympics. Have we got any ambitions similar to the Olympics themselves for improving our position in the medal table? Mr Brace: I think we have got two fronts really. One, our main objective is staying in the top three and the second one, we have only got one place to go really: we were second in the Sydney medal table and second in Athens in the medal table. Of course, going for the top position I think is much more of a realistic aspect for us to go for for 2012 than it will be for Beijing when obviously China are already in the top spot. The second part for us is the infrastructure issue. We do not have the infrastructure at the lower levels to bring in paralympians to develop with the level of support and funding. Our challenge will be to secure enough to ensure that the high performance levels have the opportunity to perform at the top level but also that we can develop funding for the first stream of people coming in with the talent identification and then linking in to the elite programme. We will be talking to the home sports councils as well as other commercial sponsorship. At the high performance level, we are significantly helped in our funding through UK sport and obviously we are looking for better ways to utilise that funding all the time. Q221 Janet Anderson: Can I ask you a supplementary about sporting facilities. I have a particular interest because there is a debate going on in my constituency at the moment about whether we should have an Olympic-size swimming pool. Is there a shortage of such pools around the country and would you like to see local authorities do more to provide them? Mr Clegg: Without a doubt we have a shortage of 50-metre swimming pools in this country. The situation has improved substantially since the introduction of the Lottery but if you go back as recently as 1995 I think you will find there were probably only about 60 50-metre swimming pools in the country. It is worth pointing out also that London currently does not have a 50-metre swimming pool which can host an international competition, so our capital city is desperately in need of a suitable facility. The Olympic swimming competition is held in 50-metre pools, they are expensive to build, they are expensive to maintain but, quite frankly, unless we have those facilities we are always going to find it challenging to develop Olympic swimmers who can compete at the highest level against the world's best. When you compare the number of 50-metre pools that we have in this country compared with, say, France or Germany, we look very much like a Third World country. The situation is improving and we would encourage local councils out there thinking about investing in that particular facility and, so long as it fits within the overall facility structure and strategy of the Amateur Swimming Association to make sure that we do not end up with two pools in two adjoining cities or adjoining towns, then of course we would support that. Q222 Paul Farrelly: Can I follow up on that. We too in our area have the opportunity to build a new racing pool and 25-metres has been mooted but with the Olympics people are starting to think more of 50-metres. As an opportunity for our area, my former rugby coach at school got in touch with me a few weeks ago - he went on to become the technical director of UK Athletics, Graham Knight - he is acutely conscious of what is being done on the ground since he retired - he is excited about the Olympics - and in our area of North Staffordshire we are stuck right in the middle of four athletics centres of excellence, so we are not going to get the spin-offs there but with the Olympic type pool we might, indeed, have an opportunity if people put their efforts and investment behind that. Clearly that cannot be a free-for-all, as you said. How should local authorities and people approaching this get the British Olympic Association and the ASA involved in arbitrating as to where this might be a good thing or a bad thing to fit in with their strategies? Mr Clegg: I think the last time I appeared in front of this Committee about 12-18 months ago a similar question was raised. I think it would be totally irresponsible for people to build sporting facilities in this country if they are going to be based upon having some wonderful opportunity in the build-up to 2012. Quite frankly, we will need to see properly costed business plans for all the facilities and if those are being built with a long-term need in the local community, in a timeframe which allows them to capitalise upon the 2012 opportunity, then I think that is fantastic. In terms of swimming pools, certainly you need to speak directly to the ASA - the Amateur Swimming Association. They have a facility strategy in terms of how they would like to see the development of community swimming pools across the country and they are best placed to answer that specific question. Q223 Chairman: You said that the financing of your ambitions in Clearing the Bar would at least in part come from the National Lottery. I assume that is not from the proceeds of the Olympic Games nor from the money which Sport England are having to contribute to the cost of the Olympics. It is an additional burden on Sport England. Lord Moynihan: In answer to the first part of your question, that is correct. In answer to the last part of the question, it is a matter for DCMS. DCMS will be considering the implications of Clearing the Bar after it has been presented to my colleagues on the Olympic Board. It is right and proper that should be an internal negotiation and discussion within Government as to where the funding will come from. We will be ready to discuss and play our full part in coming to an agreed conclusion. It is clear that to achieve the British Olympic Association's target of fourth place will require significantly more than if we were aiming for seventh, eighth or ninth place but, as Lord Coe in the press recently, quite rightly said, this is a once in a lifetime opportunity for British sport and we should be aiming for the realistic and highest possible standing for our young sports men and women. Fourth is deliverable, to beat Russia, to beat China, to beat the United States would be unrealistic, to take on Australia on home turf we did effectively during the summer and we believe we can do effectively during the summer of 2012. It is in that area, and to come first within Europe, that we are very focused in coming to the conclusion that fourth is a realistic achievement but it is for Government to determine the source of the funding and it will not come from the Olympic Games and it will not come from Sport England, as I understand it. Mr Clegg: Can I add, also, that this is really important because at the end of the day this is how the success of the Games will be judged by the man or woman in the street. It will not be judged by how efficient LOCOG is, it will not be judged by how beautifully architecturally designed some of the stadiums are, it will be judged by how many British athletes stand on the podium and collect medals. That is why we are so serious about this issue in terms of taking it forward and delivering Clearing the Bar. Q224 Chairman: Coming fourth would be a fantastic achievement but not necessarily at the expense of grass roots sporting facilities for the next seven years. Are you worried that by pouring all the money into trying to achieve that actually it means that all the pools up and down the country - and in Janet and Paul's constituencies - are going to have to wait for seven years before there is any money to finance them? Lord Moynihan: No, I am not worried about that. I think the opposite should apply, namely that the additional amount of money that we are talking about, which we are not in a position to share at the moment because we have not reached agreement with the Olympic governing bodies and UK sport yet on what that figure will be, is not possibly going to be as large, Chairman, as you might have in mind. That said, success in the Olympic Games is a catalyst for private sector funding of sport, sponsorship in sport, local authority funding of sport and recreational opportunities and facilities. I see this once in a lifetime opportunity as a real chance to encourage all sources of funding to come into sport and the better we do in 2012 the greater the legacy will be. If we have a fantastic success in 2012 I very much hope that on the back of that there will be a success if we have been fortunate enough to have Glasgow selected for the Commonwealth Games in 2014. I think that will be fantastic for sport in Scotland and great for seeing a continued legacy of improving facilities and improving opportunities, and improving private sector funding of sport, an area which I believe has not been tapped to the full and the Olympic opportunity will provide a catalyst for more funding to come in from the private sector. I do not think we will see a reduction in spend on sport, I think hosting the Olympic Games and being successful in the Olympic Games will see a post-2012 increase. Q225 Mr Sanders: Past performance in the Olympics and the recent World Athletics Championship demonstrated you have a very long way to go to achieve your goals. Over 50% of our Lottery funded athletes did not even qualify for Athens, so what has gone wrong and what significant changes have to be made? Lord Moynihan: Adrian, I am looking to the future and in this new found position of being apolitical and outside criticism of what may or may not have happened in the past I can tell you what is required moving forward to see the significant improvements rather than what went wrong in the past. The first thing that is required is consistent funding. It is absolutely essential that we have consistent funding to the Olympic governing bodies. The second thing that is required is the best coaches. I mentioned earlier coaches are centres of excellence, and they really are. The coach inspires, the coach motivates, the coach can get the best out of our young Olympians of the future. We will deliver far better than we have in the past. The importance given to coaching needs to be on a step change level from where it has been in the past. I am very pleased to say that UK Sport and the Government are at one with us on the importance of reinforcing more emphasis on coaching. Then I mentioned in a highly competitive market, which it will be, to achieve fourth place we need to make sure not just the coaching but the management, the administration, the medical, the support services to our sports men and women are there and that we have the back-up facilities, the high performance centres properly resourced must be there and that the governing bodies are given the support where they need the support to make the decisions on behalf of their staff, their performance directors, their coaches and ultimately we are all the servants of the sports men and women who will be up there winning medals in 2012. I am absolutely convinced that with the strength of the governing bodies and the talent we have in this country that is an achievable and deliverable target. I am absolutely convinced that unless Clearing the Bar is accepted we will not achieve that stretched target. That is why we are spending so many hours, the days and nights and little time we have available getting that document right and working with UK Sport to make sure we get that right. We have to do it now, we cannot afford to wait until the end of next year. We need to make sure that the funding is secure so that governing bodies can take the steps which are necessary next year. The time invested in the beginning of next year will be worth a huge amount when we get to 2012. It is time invested upfront to make sure that those plans can deliver the success. That means we will look at Beijing in a different light from how we would normally look at Beijing. We will look at Beijing as a stepping stone towards success in 2012 which may not best be judged by medal tallies, for example, but must be judged by how we have seen progress in the squads and the teams and the coaching in place en route from here to 2012, which is our principal goal. Q226 Mr Sanders: With more funding, with a consistent approach, are you expecting, therefore, that we will get a better return than 50% of those athletes funded qualifying for future games or are you saying "We will just do better at those Games but there will still be 50% of those who were funded who will not qualify"? Mr Clegg: I think we should not under-estimate the difference between success and failure in this environment. Let me just give you one statistic. In Athens, five of our gold medals - Kelly Holmes' 800 and the 1500, the 4 x 100 relay, the one kilometre time trial and Sir Matthew Pinsent in the Men's 4 - were run over a collective running time of 13 minutes and two seconds. The cumulative difference between five gold medals and five silver medals over those 13 minutes and two seconds was 0.545 of a second. Q227 Mr Sanders: I am talking about money for athletes who have not even qualified for the Games. Mr Clegg: We have to put in place, also, the suitable resources to support the next generation of Olympic athletes as well. Quite frankly, delivering success in 2012 is not the be all and end all of this exercise. The whole basis of the BOA conceiving the Olympic bid in 1997 - four years before we went to Ken and before we went to the Government to successfully engage them in this process - was a very clear understanding that nothing had the potential to move sport higher or more quickly up both the political and social agendas in this country. What we have to do is create a step change which will provide a long-term legacy so it is not just about investing in the athletes of today and the Olympic athletes of tomorrow, it is about investing in the Olympic athletes of the future. Q228 Mr Sanders: Can I focus on that answer. It is not about investing in the athletes of today or the athletes of tomorrow, it is investing in the athletes of the future, is that not the same as investing in the athletes of tomorrow? Mr Clegg: The athletes of today and the athletes who are going to be competing in Beijing, we need to be investing now in the athletes who are going to be competing in London as well. They may not qualify to go to Beijing but we need to make sure there is a long-term support structure there which will allow people to go from grass root sport up to Olympic champion and you need to invest all the way down the pathway. It is quite right and proper that some of that investment will not deliver the success that you aspire to, that it will contribute towards it. Lord Moynihan: Adrian, if I can add to that. In Clearing the Bar we will be calculating the number of athletes of sufficient calibre who are required to fill the pipeline and using from our experience, and international experience, the turnover and attrition of those athletes through the pathway to success. You are absolutely right, there is a much larger catchment area of athletes in the initial phase. We need to agree a reasonable annual attrition rate for a carefully selected squad of athletes in each sport - they differ in each sport - and then that comes out with the figure that brings us to a team which will be of the order of 700. Backing up from that, then one comes to a conclusion as to how many athletes will come into this programme and be reasonably expected to deliver the success. It is not all about money but it is to a great extent assisted by strong financing to deliver success at the end of the day. That is a complicated formula, attrition rates range internationally from 15, 20, 25% and 30% in the squad between now and when we get to 2012. It varies significantly between sports and it needs to be clearly defined and worked through the model in reaching the budget requirements on a sport by sport basis which we will be doing in the next five weeks or completing in the next five weeks. Q229 Mr Evans: How many golds gets us into fourth position? Mr Clegg: At this moment in time, targeting 20 but I think we are seeing the emergence of China as a sporting super state, they will undoubtedly top the medal table, in my view, in 2008, a position which they will maintain in 2012 and that will have a negative impact on the rest of the medal table. I suspect by 2012 - and I know I am on the record - that 18 gold medals should be sufficient to secure fourth place. Q230 Mr Evans: You have just done this wonderful arithmetic for us to say how close we were to getting five silvers, in the last Olympics how close were we to doing much better, perhaps ten gold medals instead of five? Mr Clegg: We set the target for the team going to Athens last year of returning with between six and nine gold medals and more than 25 medals in total. We achieved nine gold medals and a total medal tally of 30. It could have been very different and of course there were people like Paula Radcliffe, who most people had expected to deliver in that environment and failed to. When these fractions of a second differentiate success and failure, there is a margin either way and that is a useful statistic to demonstrate how small those margins are. Half a second difference and Great Britain would have moved from tenth in the medal table to 17th in the medal table. Q231 Chairman: Can I ask you quickly about one particular sport, which I raised with the Secretary of State last week. One of the sports which traditionally we have been quite good at, and will hopefully achieve gold medals in, is shooting but three of the disciplines in shooting the potential Olympic gold medallists cannot practise in this country as a result of the firearms legislation, let alone those who we would hope to bring forward as future gold medallists. Is that something which is causing you concern? Is that something you are talking to the Government about? Mr Clegg: Obviously it is a concern because our aspiration is not only to finish fourth in the medal table but also to field the largest and most competitive team and, therefore, the initial aspiration of the BOA is to make sure we have athletes competing in all of the events. In the discipline of pistol shooting it is challenging because obviously on mainland Great Britain pistol shooting is not able to take part as a recreational sport following the Firearms Amendment Act. During the passing of that Act we were able to successfully achieve clauses which provided for the eventuality of the Commonwealth Games or the Olympic Games being hosted in this country. You are absolutely right to identify at this moment in time British pistol shooters wishing to follow their sport from a recreational point of view need to practise that sport on mainland Europe, in the Channel Islands or in Northern Ireland. We have been having discussions both with the Great Britain Target Shooting Federation and other organisations to see if we can work with the Government to provide the exemptions which are contained within the Act to allow pistol shooting to take place here in mainland UK but on a restricted basis. I cannot at this moment in time speculate in terms of what the outcome of those discussions will be. I have had discussions, also, with the Combined Services Sports Association to see if this is a particular sport where, obviously within the constraints of military camp and police firearms units in the UK, this could be an area of expertise that they could develop and contribute to the successful staging of the Games through that area. Q232 Alan Keen: Just one quick question: can I come to the other end of the scale, there are some Olympic core sports which we do not excel in, what is our approach to those and which sports? Mr Clegg: There are a number of sports where we are not competitive in the Olympic environment. In Athens last year Great Britain fielded athletes in 21 out of the 27 sports; of the remaining six sports all of them, apart from one, were team sports. There is obviously the football issue which has been well debated and certainly the Chairman and I are at one in terms of seeking a positive resolution in that area. We have got sports like handball, basketball, volleyball, to name but three, where we have a serious challenge to take them from where they are at the moment to where they need to be. In terms of the BOA's plan to field the largest and most competitive team, we need to give those sports the opportunity of moving from where they are now to being competitive in 2012. Seven years to take some of those sports that distance is very challenging. Certainly the model that my Chairman has been discussing does accommodate those sports and we will be working with them, and with the international federations I have to say, to make sure we can get the sports to that level. I think there is no point in us taking up the opportunity of automatic qualification by virtue of being the host nation in all of the team sports if our athletes cannot compete credibly in that environment. It is not in the long-term interests of the sport, the international federation or the IOC. We are now meeting with each of the international federations, the International Basketball Federation has been over already, the International Wrestling Federation has been over already and we are meeting with them, together with LOCOG and with the British governing bodies, to see what support they can bring to the table to ensure that our athletes in all the sports, or as many sports as possible, are competitive in 2012. I hope that answers the question. Q233 Alan Keen: Are you prepared to take a radical look at some of these sports? It was alleged to me a couple of years ago that with basketball, for instance, funding was spread too thinly across the country and in some of the inner city areas, particularly in London, particularly with black people their inspiration is in the US basketball field and yet we are spreading the funding too thinly across the whole of the UK. Are you willing to look, if that is the case, to reassess the targeted funding? Mr Clegg: I spoke at the Annual General Meeting of Great Britain Basketball last week and there is absolutely a clear focus so they know now this is the only game in town. There is a sport, basketball, which is based upon an England, Scotland, Wales, home country basis, for the first time ever they have to come together and focus and deliver. They have to put political baggage and any personal aspirations of people within those federations to one side to make sure they deliver in 2012. If we can deliver a men's and ladies' team in 2012 competitively against the world's best that will be a fantastic step forward. I am delighted that the English Basketball Association has got an MBA player now as an integral part of that, John Amaechi, who has recently returned from the United States, an MBA player. I see him being a catalyst and being absolutely central to driving this process forward. He is absolutely committed to doing his utmost to ensure we have a British team, both men's and ladies in 2012. Lord Moynihan: It will be inappropriate not to mention in Mike's presence the outstanding success of the wheelchair basketball team in the UK, both on and off the pitch. Mike might want to add to this, but internationally they are a highly respected federation and organisation and that influence has just successfully landed some major events here in the UK. Mr Brace: The whole push to get the recognition of that, I think, can only be beneficial across the board for sport. I think the Wheelchair Sports Federation in terms of their support for British wheelchair basketball has been a good example of getting a sport where we can excel at a team sport in the public arena which gets that whole genre of excitement, passion and public support. Alan Keen: Can I say that is one of the most encouraging answers I have heard. If that is one of the results of getting the Olympics it is a good sign. Q234 Paul Farrelly: I know time is short and I do not want to encourage Members to go through the list of every 27 sports individually otherwise I will go off on my tangent about the scandalous omission of Rugby Sevens from the Olympics. One thing that is remarkable is despite the glittering success of Amir Khan, many people were astounded about the tiny participation from boxing in this country at the Olympics. What has happened and how central is the improvement of boxing, one of our traditional strengths, to your approach to the Olympics in 2012? Lord Moynihan: Boxing is a sport close to my heart and I am tempted to say that it went downhill when I went out of training but that would be wholly inaccurate. It is now faced with resurrection and I am delighted to report that. I think one of the most important decisions that has been made in boxing is the recent decision, which is still subject to confirmation, so I would not want to mislead the Committee, between the amateur game and the professional game, the British Boxing Board of Control, to have joint promotions. I think this can only but be beneficial to the amateur game. I think it is a great sport that has given tremendous hope and opportunity to a lot of young lads, not least in the inner city clubs. I see through Jim Smart's excellent work and the Amateur Boxing Association's work that we have a real opportunity to increase the number of kids who will come into boxing because they are inspired by the Olympics which will be held in 2012. It is a well-regulated sport and it is appropriate that it should be well-regulated. I am confident that what Amir Khan did in setting a trend in terms of inspiration and opportunity for young people now capped by the 2012 games will see boxing go from strength to strength. The decision to work closely with the British Boxing Board of Control is going to be very helpful indeed because one of the biggest problems in developing amateur boxing in this country has been a young kid with real talent going pro before the next Olympic Games. The decision that is pending, subject to confirmation between the two governing bodies, could reverse that and be very beneficial to the development of talent, keeping young lads in the amateur ranks through an Olympic cycle and seeing success with some of our young lads in 2012. I am pretty optimistic about where we are going with boxing. It has got a good governing body. It has got support in that it can be a significant contributor to the success of Team 2012. Q235 Adam Price: When will the definitive list of sports for inclusion in the programme of London bids be available? I know there is a question mark about that at the moment but baseball, which has been played in Cardiff since the 1880s, was virtually invented there, so we welcome its inclusion. When will we know the finalised list of sports? Mr Clegg: We were required to bid on the basis of 28 summer sports. You are aware that two sports were taken out of the programme at the IOC session in Singapore after London had been elected, baseball and softball. There is a campaign that is being mounted internationally now to bring both sports back into the programme in time for 2012 and the President of the International Olympic Committee has indicated that if that is a motion that is raised from the floor and it is voted on favourably then the Olympic movement will open its arms once again to baseball and softball. Lord Moynihan: If I can add to that, you have made a very compelling case for baseball. I think it is important, also, on the record, to say that the British Olympic Association will continue to work hard to make sure that, if at all possible, softball is reinstated. It is an all-women's sport. There is a lot of enthusiasm for the sport in the UK and my predecessor, Craig Reedie, did a lot of very helpful and constructive work in trying to ensure that whilst no new sports had come in, and whilst potentially we have lost two, the IOC will have the opportunity to review that. It is not up to us, we have no rights to require the IOC to do so but we hope that through our influence and our constructive relationship with the IOC that will be an issue looked at in the near future. As far as the programme is concerned for the funding, we are taking into account the possibility that both sports will become, once again, Olympic sports for 2012. Q236 Paul Farrelly: I know the willy-nilly insertion or deletion of sports will be a nightmare for those people constructing stadia in places like London but can I pursue my hobby horse. If the door is still open potentially for baseball and softball to come back in, is the door irrevocably closed for rugby still? Is there any possibility, a chink of light? Mr Clegg: Genuinely I think not. The 2012 candidate cities were required to base their whole plans upon the 28 sports and I think realistically the window of opportunity for 2012, on the basis that we have a signed contract with the IOC, would only be for softball and baseball. I am sure LOCOG would remain open to any approach from the IOC regarding how they wish to change the sports programme in 2012 but it is very much within the gift of LOCOG having signed a contract with the IOC. Lord Moynihan: That is absolutely right, Paul. As far as 2012 is concerned, the only outstanding question is whether there might be a reconsideration of the two sports that have gone in terms of softball and baseball. The decision was taken not to introduce new sports for 2012 at the last IOC meeting but what may happen in 2016 or 2020 is crystal ball gazing for us. Q237 Chairman: I am tempted to ask about darts, but I shall resist! Instead, can I ask, Colin, just before your election to your current position you were a joint author of a report called "Raising the Bar" which was fairly critical of the existing structure for supporting sport in this country. You presumably continue to hold the views which you expressed in that report. Given that it does not seem those recommendations are going to be immediately taken up, do you regard this as a problem in terms of delivering your ambitions, that the structure which you clearly disapprove of is going to remain in place for the moment? Lord Moynihan: I think, for the record, I was not joint author, I was joint chairman with Kate Hoey MP, and it was a unanimous report which included many people from the world of sport who are highly respected with life-time commitment and involvement in sport, ranging from some of the senior governing bodies such as Di Ellis from the world of rowing, Sir Steve Redgrave and Duncan Goodhew and many others who contributed. It was also a report which attracted over 30,000 hits on the website, it was an on-line report, so it was very much an opportunity to reflect the views of sportsmen and women and people who enjoy sport the length and breadth of this country from all sorts of different backgrounds. Do I stand by the conclusions of that report? Yes, I do. Will I be campaigning publicly now to implement it? No, I will not. There will be no more PQs, much to the pleasure I am sure of DCMS officials, flowing from my pen as a result of moving to the BOA job, which I genuinely see as aside from party politics. I will not be playing any active role in party politics moving forward while obviously retaining the Conservative Whip, as Sebastian Coe is doing, but working with all parties to deliver a highly successful Games. Do I think it will impair the discussions moving forward with those bodies about whom there were some constructive criticisms? No, I do not. I think it is very important to work within the existing structure. I think the BOA relationship with UK Sport is a good one. It is one which is important because UK Sport has focused on elite sport and that obviously is of direct relevance to the Olympic governing bodies, both Summer and Winter. We have not mentioned the fact that the Winter Olympic bodies are very important to us, they were 100% behind the bid and we must make sure they benefit from some of the legacy and some of the financial opportunities which exist. Finally, you mention it does not look, if I may paraphrase you, as though all the recommendations will be implemented immediately. I anticipate you are correct there, Chairman. The good news is that on the night we went to press one of our key recommendations was swiftly announced by Government and we managed to change the relevant paragraphs warmly to welcome the Government's decision to move in the direction of bringing together the services for elite performance sport into UK Sport. I think that was a very important step in the right direction. There were a number of other recommendations which have also been taken on board. So I think incrementally over the years I am confident that report will be carefully looked at by Government and I very much hope it has opened the debate. That was what it was intended to do, it was to begin the debate, that if we raised the bar in Singapore, as we did, then we should raise the bar and deliver a fit-for-purpose sports policy in this country to match an Olympic host nation. If it has contributed in a small way to that debate, then I will rest very happy with the events of the last two months and the publication of that report with my colleagues. Q238 Chairman: Thank you. If there are no more questions from my colleagues, can I thank you all very much for giving evidence this morning. We look forward to hearing from you again in due course. Lord Moynihan: Thank you, Chairman. |