Examination of Witnesses (Questions 1-19)
RT HON
JAMES PURNELL
MP AND MR
JONATHAN STEPHENS
25 OCTOBER 2007
Q1 Chairman: Good morning everybody.
May I welcome James Purnell to the Committee? James is a regular
before this Committee, but this is the first time he has appeared
before us as Secretary of State. May I also welcome the Permanent
Secretary of DCMS, Jonathan Stephens? Perhaps I could begin. There
was a great deal of speculation in the run-up to the reshuffle
about responsibilities within Government and that DCMS might not
survive at all or indeed that, if it did, it might look very different.
In actual fact it does not look very different to the Department
which existed before. Was all that speculation completely out
of place or was there in fact a debate and did you have to fight
for your survival as Secretary of State for Culture, Media and
Sport?
James Purnell: That is a slightly
hard question to answer because I was not there at the time so
I do not know. What I do know is that the split of responsibilities
that we have now, with Tessa Jowell doing the Olympics as a full-time
job and the DCMS doing the sporting part of the Olympic legacy
as well as all of our existing responsibilities, is the right
one. I would also say that there was much discussion in 1997 about
whether having a Department for Culture, Media and Sport was the
right approach. I think the last ten years have shown that it
is. The sectors fit well together and if you look, for example,
at the way that culture has thrived over the past ten years, the
consensus is that the culture in this country is world class and
having the Department for Culture, Media and Sport certainly has
not got in the way of that.
Q2 Chairman: In the debates which
have taken place in this Committee in a number of different areas
when we have had inquiries, looking at heritage, looking at tourism,
looking at creative industry, each time we have had quite a long
discussion about whether or not it was appropriate that that particular
industry should be within the DCMS or whether it might not do
better in DTI as was, or maybe in Education. Do you think those
debates are now behind us, that this is now settled and the DCMS
goes on?
James Purnell: It is always for
the Prime Minister to make those decisions and indeed there have
been some changes at the margins. For example, in the last reshuffle
NESTA became a shared responsibility. The Department for Innovation,
Universities and Skills lead on that but we have a dual lock arrangement
with them on that. In 2005 DCMS gained some responsibilities around
the creative industries. Changes can always be made at the margin,
but the broad outline we have is the right one and we can continue
to have debates around whether they need to change at the margins.
Q3 Chairman: Particularly regarding
the creative industries, a huge amount of the issues surrounding
the creative industries concerns copyright. Copyright has now
gone off into the new Department for Innovation, Universities
and Skills. How is that going to work between the two of you?
James Purnell: It works very well
and we have very productive relationships with them over that.
Having a Department for Innovation which is looking at copyright
in the context of innovation, which is after all the fundamental
reason for having a copyright regime, is a very sensible arrangement.
Q4 Mr Sanders: The previous Prime
Minister set out priorities for each Secretary of State. Unfortunately
in his letter to your predecessor he did not mention the word
"tourism". Are you still working to these priorities,
given the cuts to VisitBritain which were announced this week?
James Purnell: Yes, we think tourism
is a vital part of the economy. It may just be worth me saying
a little bit about that in terms of introduction. We have reduced
the VisitBritain budget and the reason that we are doing that
is that we believe there are efficiencies which can be achieved.
We have asked VisitBritain to lead on a strategic review of how
we achieve those objectives. That is in the context of £350
million being spent by Government on supporting tourism. The amount
provided by central government has doubled since the mid-1990s.
If you look at the amount the RDAs spend, for example they are
spending over £40 million, in the mid-1990s they did not
exist and that money was not being spent. We believe that a strategic
review can lead to a more effective way of achieving the outcomes
which we prioritise in tourism.
Q5 Mr Sanders: But are the priorities
which the Prime Minister set out in his letter to your predecessor,
which did not mention tourism, still the priorities of your administration?
James Purnell: The priorities
which I have are set out very clearly in the CSR White Paper and
in the objectives we all have and tourism is one of those four
objectives.
Q6 Mr Sanders: But tourism was not
mentioned then, so is tourism now a priority even though the Prime
Minister did not set it out?
James Purnell: The document which
I am operating to is the CSR White Paper which set out very clearly
that economic impact was one of our four key goals and tourism
is a very important part of that. Tourism is a key responsibility
and a key priority for the Department.
Q7 Mr Sanders: In terms of tourism
as an industry, which has a variable performance, as we have been
discovering in the inquiry which we have just opened into it,
there are aspects of traditional tourism areas which are having
a very hard time. The Prime Minister, in a reply to a question
I asked the other week, said that he agreed there were some problems
and something needed to be done. Are you looking at things which
could be done to help coastal resort economies which are dependent
on tourism?
James Purnell: Yes, we are looking
at that and we should be very happy, if the Committee wanted to
submit some early ideas on that, to look at those. Seaside towns
clearly face particular challenges and we are working very closely
with the Department for Communities and Local Government to see
what we can do in that area. That is why the Prime Minister gave
you the response he gave you and we shall be making announcements
on that shortly.
Q8 Mr Sanders: You will only be making
announcements. Will that be your Department or Communities and
Local Government?
James Purnell: Clearly the area
of regeneration of coastal towns goes much wider than simply tourism,
heritage or culture. We are looking at what we can do within our
departmental responsibilities, but there are obviously wider issues
which are for the whole Government to consider. We should be very
happy if, as part of your initial views from your tourism inquiry,
you had things you wanted us to consider for seaside towns, to
look at that.
Q9 Philip Davies: May I just press
you on this funding for VisitBritain? I think you basically said
that you were cutting the funding because efficiencies can be
made. It strikes me that that can apply to every government department
there is and you are part of a Government which makes it a virility
test to spend as much money on departments as possible and to
say things are getting better because you are spending X amount
of money on it. When your Government are challenged on anything
their answer is that they are spending X amount of money on it
as though that will make things better. Why is it that in every
other government department spending more money indicates that
it is a priority, whereas in your answer it is simply efficiency
savings?
James Purnell: I clearly do not
accept your premise but in any case, if you are saying that as
a way of saying the Government should be concentrating on finding
efficiencies where they can, then presumably you welcome us looking
for that and you welcome the idea of a strategic review to see
whether outcomes can be achieved in a more efficient way.
Q10 Philip Davies: I would certainly
welcome your Government looking for efficiency savings in every
department. What I am curious about is why these efficiency savings
only seem to apply to your Department and none of the other government
departments.
James Purnell: That is clearly
not true. The Government overall are pursuing 3% efficiency savings
across the range of what they are doing and in this area, because
the £350 million is being spent overall, because the amount
of money from central government has doubled since the late 1990s,
we believe that a strategic review can find efficiencies and that
is why we set them what we recognise is a challenging target.
Q11 Philip Davies: What are the efficiency
savings they are going to make?
James Purnell: It would not be
for us to start to tell people how to manage their budget. That
is why we have precisely asked VisitBritain to conduct that. VisitBritain
is an extremely successful NDPB. They have a great record in terms
of delivering efficiencies, modernising their operation, going
to look at internet marketing, for example, and we are therefore
giving them the responsibility to be able to advise them on how
to do that.
Q12 Philip Davies: You have said
that you have identified efficiency savings which can be made.
You cannot say you have identified efficiency savings and then
say you do not know what they are. What are the efficiency savings
which you have identified they can make?
James Purnell: We have identified
the budget we think they can work within. We have asked them to
lead the review on how to achieve them.
Q13 Mr Evans: Looking at the budget,
would it not be kinder to VisitBritain if you wound it up?
James Purnell: No, we have doubled
the amount of money overall going from central government to promoting
tourism. A significant amount of money is being spent by VisitBritain
under this revised budget and we think that by looking at how
that money is spent and organising it efficiently we can achieve
those outcomes but at a reduced cost. I would have thought you
would support that.
Q14 Mr Evans: I am sorry but you
have gone from 2006-07 with a budget of £50 million down
to £40 million in 2010-11. That is £10 million less
plus inflation, which will no doubt eat into that figure as well.
From what I can estimate, the savings which will be made will
be on frontline services that VisitBritain are there to do. They
are there to do a specific job which is to attract internal tourism
to the United Kingdom. They will not be able to do that to the
same effect with £40 million.
James Purnell: I do not agree
with that. If you look at the amount the RDAs are spending, if
you look at the wider support, the £350 million, there is
scope there for very good support for tourism in the UK and we
believe that through the strategic review we can do that in a
more efficient way. As part of our spending review we have also
been able to increase spending for the arts, for museums, for
the heritage and when you look at what people say are the reasons
why they are visiting this country, those are many of the top
reasons why they want to come here. Therefore, by providing proper
funding for those institutions and those events we will ensure
that they are able to continue to track visitors from around the
country and also from around the world.
Q15 Mr Evans: Yes, but you have to
tell people about what we have got. After all, one of the biggest
spenders on advertising of any organisation in the United Kingdom
is Her Majesty's Government. I look forward to Her Majesty's Government
slashing by millions of pounds the amount of money they spend
on advertising themselves. You clearly think advertising is effective
in one regard but not in another.
James Purnell: No, I disagree
with your premise. The point is that we believe the outcomes can
be achieved in a more efficient way. As I have set out, a significant
amount of money has been spent in this area. We also believe that
it is important to make sure that there are good attractions in
the country for people to come to see and that is why we have
been able to find money for the arts, museums and heritage. We
believe in this particular respect it can be done in a more efficient
way and that is why we set them that goal. Coming from where you
come in the Conservative Party, I should have thought you would
have welcomed that.
Q16 Mr Evans: I believe in efficient
spending and I should like to see it start with Government. The
fact is that we had the local authorities before us this week
and they are strapped for cash and cutting back on how much money
as a percentage they can spend on advertising their local attractions.
VisitBritain is the one key area which actually joins the whole
of the United Kingdom up, selling it to people within the UK and
of course abroad as well. We are in a very competitive field here.
Tourism is one of the fastest growing industries in the world
and the Government have just decided to slit one of their wrists.
James Purnell: The responsibility
of being in Government is to make decisions about where money
can be spent efficiently and where it cannot. As you know, you
are strongly committed to trying to reduce the size of Government.
It is slightly ironic that whenever the Government try to do that
in an efficient way, you denounce it as an abandoning of the goal.
It is not abandoning the goal: it is an attempt to achieve the
goal in a more efficient way and I should have thought you would
welcome that.
Q17 Mr Evans: I welcome obesity being
tackled at government level in the fat which exists around Whitehall,
but organisations which have been proven to be effective, in that
every pound they spend actually works and brings a lot of money
into a number of smaller businesses in the United Kingdom, are
now going to be damaged.
James Purnell: We have asked them
to conduct a strategic review. We will look at the proposals they
come up with. We believe that the goals can be achieved in a more
efficient way and that is just part of what being in Government
is about. You have to make decisions about where money can be
spent efficiently and that is exactly what we have done.
Q18 Janet Anderson: May I just say
how very much we welcome the priority you have given to seaside
towns. It was of course a Labour Government in 1997, or very soon
afterwards, which gave assisted area status to seaside towns,
recognising the particular problems they face. I just wonder whether
you could set out for us how you see the future of those seaside
towns and what you will be doing to help.
James Purnell: We are still developing
our plans and we would be happy to hear from the Committee about
that. Some very interesting work has been done by English Heritage,
for example, looking at the role of heritage in regeneration.
We want to look at the role of culture in regeneration. That is
only one part of the story, but we are interested in what can
be done in this area and it is an area we are actively thinking
about.
Q19 Chairman: May I just come back
to VisitBritain? A few weeks ago you published the tourism strategy
for 2012 and beyond and it has your introduction in it. It has
always been plain that one of the greatest opportunities that
2012 offers us is a lasting boost to tourism in this country;
that has clearly been one of the things the Government have set
as a strategic goal. In your document you say that central to
maximising the opportunities for domestic and international tourism
afforded by the Games are our national and London tourist authorities,
VisitBritain and Visit London. You have now announced that in
the years between now and the Games VisitBritain's funding is
going to go down in cash terms every single year. UKinbound, who
represent all the industries which benefit from visitors to this
country, say they are shocked and horrified. They say that this
announcement confirms that DCMS has completely lost the plot.
How do you respond? How are you going to deliver that strategic
objective if you are cutting the budget to the body which is tasked
with delivering it?
James Purnell: I am going to start
sounding like a broken record. There is £350 million being
spent overall, the amount of money has doubled, we believe that
the same goal can be achieved in a more efficient way through
a strategic review and that is the goal we have set them.
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