Examination of Witnesses (Questions 138
- 139)
TUESDAY 21 NOVEMBER 2006
RT HON
TESSA JOWELL
MP AND MR
JEFF JACOBS
Q138 Chairman: Could I welcome the
Secretary of State to the Committee. I understand, Secretary of
State, you have with you Jeff Jacobs, the Chief Executive of the
Government Olympic Executive. Secretary of State, you will be
aware that quite a number of questions have been asked in the
last few weeks, and there is a certain amount of controversy around
some of the issues in the preparations for the Games. I understand
you would like to start by making a short opening statement.
Tessa Jowell: Chairman, thank
you very much indeed. If I may, I would just like to make some
brief opening remarks, and to thank you very much indeed for asking
me to give evidence today. What I would like to do in the session
that we have is to give you an update on the progress of the Olympic
project and focus on our ambitions for the legacy beyond the Games
themselves; to give you further details of the cost estimates;
and also to tell you how that bill will be paid. I will give you
as much clarity as I can. It is certainly my aim over the coming
months to disclose as much information to your Committee as I
am in a position to do. I would be very happy after today's session
to provide further written information to the Committee if that
would be helpful. This is important for a number of reasons: not
least the right of Parliament to know, but also the importance
of maintaining the public's enthusiasm for the 2012 Games, and
their confidence in the planning for the Games. Before I do that
let me just make two observations. I spoke to Jacques Rogge who
is the President of the International Olympic Committee—and
in the course of our conversation he reiterated a point that he
has made on many occasions about the progress of London 2012 since
we won the bid. He said that the IOC has full confidence in the
good progress of works; and that the IOC Commission, under the
leadership of Denis Oswald, has said that we have hit every milestone
to date. They know that we are further ahead than any other Olympic
City at this stage; that we are two years ahead of where Sydney
were at an equivalent point; and three years ahead of Athens.
Just in the interests of accuracy I can just assure the Committee
in today's Evening Standard that "the IOC is to probe
the soaring costs of the London Games" is unusually
untrue. Secondly, on costs, the work on reviewing costs began
within a matter of days of our winning the bid. Talks with the
Treasury about the detail of funding continue. You will also be
aware that CLM, the delivery partner appointed by the ODA to undertake
a rigorous scrutiny of current and likely costs, is underway;
and we expect their report early in the New Year. Clearly, their
report will be extremely important in guiding the final decisions
about the ODA's budget for next year and the indicative budgets
for the two years after that. We expect the work on the costs
review to conclude soon, and when it does I will report to Parliament
in detail about the conclusion of that cost review. I am quite
sure the Committee understand that we cannot reach a conclusion
about costs for a number of reasons, but very specifically including
the importance of the delivery partner, CLM, concluding their
work. The NAO have also agreed to work closely with us. I have
invited them to do this, and would be very happy to report to
the Committee on a timescale that matches the reports and joint
work that we do with them on costs and ensuring value for money.
In the meantime, I am obviously here to answer your questions,
but if you would find it helpful to understand the swirl of figures
that are being reported I can start by taking the Committee back
to the original bid of £2.375 billion to build the Olympic
Park and to explain where that is today.
Chairman: Secretary of State, thank you
for that, and I think we would certainly like to take you up on
your offer of supplying further written evidence as soon as that
is possible, but your statement, obviously, does give rise to
a number of questions.
Q139 Mr Sanders: Thank you, Secretary
of State. Obviously, there are no clear figures in that statement,
and therefore the only thing we really have to go on is the statement
by Jack Lemley, who resigned as Chair of the ODA in October, who
said in an interview with the Idaho Statesman (and we do
not quote the Idaho Statesman very much in Select Committee
meetings): "There's so much time being lost now, the costs
are going to go up on an exponential basis and I'm just not going
to be part of it . . . I do not want my reputation for being able
to deliver projects on time and on budget ruined." Do you
believe that there was any truth in what he was saying?
Tessa Jowell: I do not accept
what Jack Lemley was reported as saying in his interview with
his local paper. In relation to your point about costs I am very
happy, Mr Chairman, to take the Committee through a fairly detailed
statement about the costs as they now are at whatever point in
your questioning that would be helpful. Let me deal specifically
with the Jack Lemley point. Jack proposed a development plan for
the Olympics called the 2-4-1 plan ("the plan that Jack built",
as it has come to be known), which was two years of planning,
four years of construction and a year for test events. That is
the plan that is being followed. While he was Chair of the Olympic
Delivery Authority he was very clear about the importance of rigorous
planning and not getting on to site too quickly and giving rise
to potential cost increases because the initial planning work
had not been done with sufficient care and rigour. I had hoped
that Jack would take some pleasure and some pride in the fact
that his template for taking forward the Games has been followed,
and on his departure I would quote him as saying: "I have
every confidence that London will stage a superb Olympic Games
and Paralympic Games in 2012 and leave a legacy that the country
can be proud of". So, no, I do not accept the criticisms
that he made when he left the ODA and went back home. Indeed,
the rigorous investigation of the delivery partner, I think, will
help us to answer at an early stage any outstanding further questions.
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