Examination of Witnesses (Questions 1-19)
NORTHERN IRELAND
DEPARTMENT OF
CULTURE, ARTS
AND LEISURE
2 NOVEMBER 2004
Q1 Chairman: Welcome to the second session
of the Committee of Public Accounts of the United Kingdom and
Northern Ireland. We are now going to look at the Navan Centre.
We are joined by witnesses from the Northern Ireland Department
of Culture, Arts and Leisure, and particularly by the Permanent
Secretary, Dr Aideen McGinley. You are very welcome. Perhaps you
can introduce your colleague.
Dr McGinley: Chairman, on my left
is Mr Nigel Carson, who is the Director of Museums, Recreation
and Sport in my Department.
Q2 Chairman: Now the Navan Centre
has had a troubled history. It is closed currently. It is, however,
going to be transferred to Armagh City and District Council, is
that right?
Dr McGinley: It has already been
transferred, Chairman.
Q3 Chairman: It is going to reopen
this summer?
Dr McGinley: It will be reopening
for educational projects in January 2005 and for tourism and visitor
activities in May 2005.
Q4 Chairman: Can you just outline
to us, by way of introduction, the arrangements of this transfer,
including any central or local government funding for it?
Dr McGinley: Yes, Chairman. The
Council have taken over as trustees of the Centre so that it is
still in the public domain, it is still owned by a public authority.
It is their intention to manage the Centre within their existing
tourism budgets. They have two other facilities which are outlined
in Appendix 3, the Trian and the Palace Stables. They are rationalising
their tourism services, it will be done at no extra cost to the
public purse. In order to facilitate the transfer there was an
exchange of funding of £200,000 to enable the former trustees
to meet the liabilities that they had incurred with the closure
of the Centre and that is the only sum of money that has changed
hands to enable the new regime to be brought in.
Q5 Chairman: You can assure us in
this hearing, can you, that we are not throwing good money after
bad?
Dr McGinley: No, Chairman. In
this instance we welcome this approach and the fact that it will
be run by the local authority.
Q6 Chairman: All right. Will you
please look at paragraph 5.1 which you can find on page 40 of
the Comptroller and Auditor General's Report. You will see there
that Navan was funded by ten different organisations, including
four different Government departments. I would have thought this
must have been a nightmare for the management, who must have had
to devote a considerable amount of their energies to managing
relationships with all these funders. Surely all effort should
have been focused on managing the business. Do you recognise the
problems this must have created?
Dr McGinley: Absolutely, Chairman.
It is a problem when you have got a cross domain multi-dimensional
project like this that meets a number of governmental objectives.
In this instance the project had educational outputs, culture,
heritage, environmental outputs and the directors of Navan quite
rightly sought funds and resources from multiple sources but that
in itself would paint a picture of confusion and, indeed, your
own point about a lack of focus because they were chasing funds.
However they were successful in achieving a capital investment
from four sources and subsequently recurrent expenditure mainly
from the three Government departments concerned: environment,
education and some from tourism.
Q7 Chairman: I suppose we should
not be too hard on you because we have long experience in this
Committee of visitor centres which have grossly optimistic visitor
numbers but I have got to put this question to you: were you not
rather naive about these projected visitor numbers?
Dr McGinley: I think you are right
Chairman in saying that, in that hindsight is always a wonderful
thing. In this instance what they used were comparators which
were suitable at the time. They looked at the Giant's Causeway
which in 1987 was attracting 300,000 visitors and they looked,
also, at the other end of the spectrum at the Ulster American
Folk Park which is in a similar rural area in another part of
Northern Ireland with 82,000 visitors. The Navan figures of 120,000
initially were drawn as a mid line there. The one thing I think
that needs to be remembered is that when the concept was originally
envisaged, it included a 300 acre archaeological park that was
to be of international status and indeed the capital funding was
because this was perceived to be a flagship project. Unfortunately
that did not happen and therefore the figures proved to be overly
optimistic because the project as originally envisaged was not
delivered in that way.
Q8 Chairman: Give us a ballpark figure
for how much public money has been wasted on this so far?
Dr McGinley: Chairman, there has
been about £800,000 of revenue invested over the period of
years but in total £5 million including capital expenditure
over the eight years of the life of the project.
Q9 Chairman: Can you please look
at paragraph 3.32 which you can find on page 30 of the Comptroller's
Report. It tells us that "When the rescue package ran out
in March 2001 . . . Government were unwilling to commit to any
further long term funding . . ." Yet it says there that your
Department contributed financially to the reopening in October
2000. It was not a very strategic approach on your behalf if you
stopped funding five months later, was it? What was behind all
this turn round in thinking?
Dr McGinley: Chairman, there was
a real dilemma. The rescue package that was created for the project
which ran from April 1999 to March 2001 was negotiated as a result
of considerable survey work undertaken by both the Navan board
and Government departments. The rescue package was intended to
turn round the facility and looked at things like the need for
refurbishment. It looked at an issue for a lot of visitor centres,
how to market more effectively for repeat visits, and it looked
at its management structures and the staffing. What happened in
terms of the refurbishment was it was one of the conditions of
the rescue package. Now the refurbishment started early in 2000,
unfortunately there was a fire in the Centre as well during that
period, in the summer of 2000, but the intention was the refurbishment
would revitalise and refresh. This did not happen, the visitor
figures when the Centre reopened in October continued in a downward
spiral and really the rescue package was by its very nature that
and did not succeed. Very difficult decisions had to be made when
it came to the submission of the business plan in March 2001 that
showed increasing Government subvention being required, in the
region of £420,000 over the next three years. When other
Government departments along with my own considered the value
and viability of that, hard decisions had to be made about closure,
about suggesting to the board that we would not have that level
of subvention and the board took the decision not to continue
with the opening of the Centre because of the directors' liabilities.
Q10 Chairman: You panicked?
Dr McGinley: No, Chairman, this
was a planned process.
Q11 Chairman: It cannot have been
very planned if you changed your mind within five months?
Dr McGinley: We honoured the rescue
package to enable them to find the funding for the refurbishment.
It was one of the terms and conditions of the rescue package.
Q12 Chairman: Other colleagues will
come back on that if they want. My last question relates please
to paragraph 5.10(c) which you can find on page 43. Why was there
no formally agreed protocol between Government departments on
accounting officer responsibility for the Navan Centre?
Dr McGinley: Chairman, again this
is something which nowadays would not happen because at the outset
you would set up a Memorandum of Understanding between the departments
concerned. At that time we were very concerned with individual
departmental responsibilities, the board had approached various
departments. There were attempts, when you look at the evidence,
at inter-departmental co-operation throughout but you are quite
right to say that there was no made out statement of accountability.
Q13 Chairman: The mind boggles when
this amount of public money is being expended that nobody at the
outset of this believed it was necessary to have a formally agreed
protocol about who was responsible, an accounting officer. You
do not have to have the benefit of hindsight to wonder what has
been going on here.
Dr McGinley: Chairman, at that
time there were, as you would know, financial guidelines but no
guidelines about joint working. Indeed, we welcome the work of
this Committee in terms of better public services and the work
you did in 2002 and indeed the recent work that has come out from
Treasury on how you manage joint projects. At this time projects
are being dealt with, I think in the recognition in your own report,
formal traditional accountability led to a silo like mentality
and in the terms of delivery of programmes. The Cabinet Office
has recognised this. I think this is a good case in point. Individual
accounting officers were responsible for the funding streams there.
From day one when the recurrent expenditure started in 1997 it
was clear all along that the Department of Education for Northern
Ireland and subsequently my Department, which inherited the responsibility
on devolution, was the one line of accountability in terms of
expenditure of Government monies.
Q14 Mr Allan: Sadly we do look at
a lot of these and I have in my own home town of Sheffield a £12
million National Centre for Popular Music which closed within
a year and is now becoming probably the most expensive students'
union in the country as it has been sold for a pound.
Dr McGinley: Yes.
Q15 Mr Allan: I think it is always
helpful to go through the process of trying to know what went
wrong. We start with this. In 1986 the Minister has an idea and
says "I want you to do something with this site", is
that right?
Dr McGinley: Chairman, it started
as a result of a planning inquiry into a quarry development. In
fact, the front cover of the document shows a photograph and you
can see yourself how close the quarry is. The Navan Fort is—I
am aware of your interest in archaeology—the premier archaeological
site in Northern Ireland. The Department of the Environment at
the time were very concerned about the encroachment. The Minister
at the time also, once quarrying was to cease, felt that something
proactive had to be done.
Q16 Mr Allan: At that point it is
owned by the Department of the Environment, is it?
Dr McGinley: Yes.
Q17 Mr Allan: As an archaeological
site?
Dr McGinley: Yes.
Q18 Mr Allan: It has got visitors
coming to it?
Dr McGinley: It has.
Q19 Mr Allan: Who have seen display
boards and they have proceeded to visit the site without paying
any money?
Dr McGinley: Yes.
| 
