Select Committee on Culture, Media and Sport Minutes of Evidence


Examination of Witnesses (Questions 80 - 99)

TUESDAY 23 OCTOBER 2007

PETER HAMPSON, MS SUZANNE MALCOLM, STEVE VINSON AND STEVE WEAVER

  Q80  Mr Evans: Is there a timescale on this for the private investment coming in? Is there a light there at the end of the tunnel?

  Mr Weaver: We are expecting to go out asking for expressions of interest sometime early after Christmas.

  Q81  Mr Evans: You still have millions of people coming to Blackpool. People still come there and enjoy going to Blackpool. We are painting a pretty dreary picture here but there is hope there yet that people will still come to Blackpool.

  Mr Weaver: There are just under 10 million adult visitors a year, so that is probably translated to 14-15 million with children who come to Blackpool. This week is the busiest week in Blackpool's year, the half-term week of the Illuminations. The Illuminations is still a fantastic product, enhanced by Laurence Llewelyn-Bowen's design of a stretch of the lights this year—it is worth anybody coming to see just how wonderful that is—which will be mirrored next year by a further design competition. There are real jewels throughout Blackpool still, but it does need to reinvent itself radically and replace the outworn public and private infrastructure.

  Q82  Mr Evans: Which will then, perhaps, allow you to turn the tables a bit. You have representatives of political parties here who now no longer are coming to Blackpool for their party conferences. What sort of blow was that to Blackpool? Do you blame the political parties for turning their backs on Blackpool? I think it is a shame but that is what has happened.

  Mr Weaver: The blow is the loss, at least in the short to medium term, of the conference and business which is part of the component parts of making an all-year-round destination. As you know, the Winter Gardens is a fantastic collection of buildings, but it needs major, major changes for it to be able to compete as a modern conferencing centre. The quality of accommodation and restaurants and other offers in Blackpool has to match what is being offered in Manchester, Birmingham, abroad. The potential is there for it. I would not cast any concerns to people. It is our job, I think, to make sure that we create in Blackpool reasons for people wanting to come back again: because we have the right facilities in terms of conferencing, because our hotels and the offer of retail, shops and restaurants produces something which competes nationally and internationally. By being at the seaside, it will be a differentiated fun product which I am sure will compete on that basis. One of the issues for the cities is that they are great—and I go for weekends—but whether it be Manchester, Liverpool, Birmingham, Leeds, Newcastle, Gateshead or whatever, they are of a similar sort of product. The seaside offers something potentially different, if we can produce the other things that are absolutely essential for people in conferencing to expect.

  Q83  Mr Sanders: When people started coming to conferences in Blackpool, there were not conference centres in Nottingham, Birmingham and other inner city areas, and public money/the taxpayer has built those conference centres in those inner city areas to compete, in my view unfairly, with the seaside resorts. Do you think government should now reverse that and start helping the seaside resorts to compete fairly again with these new tourism products that they have created?

  Mr Weaver: The investment in the cities, the investment that has taken place in terms of Heritage money, which has created fantastic attractions across the country and has really engendered a fantastic renaissance in our industrial cities, we need to applaud. But, you are right, some of the unforeseen consequences of that—and there has been something like £200 million invested in attractions in the North West alone in the last 15 years—effectively has been an investment which has given people reasons not to come to the seaside resorts. I think the time is there. Part of the submissions that have been made by BRADA is that the time is now for the government eye to gaze at some of the issues that the seaside resorts face in terms of the infrastructure and the needed investment, in order that we can have the product sitting in that new infrastructure that will attract people back. It is not a kind of blame, or that what was done was wrong, but I think it has had a consequence and that consequence now needs to be addressed, not least because the cost to the public purse of not addressing it in terms of the social cost is immense. And it is. We know the costs locally to the public purse of the consequences of the decline of our economy. We are picking up that public cost, so the investment is worthwhile in the overall public purse.

  Chairman: Janet Anderson.

  Q84  Janet Anderson: Thank you, Chair. First of all, my apologies for being late but I was showing a group of tourists from Lancashire around Parliament. I am sorry I could not join you at the beginning. I was interested in what Peter said earlier, if I could go back to that. It is a constant battle to persuade government of the importance of tourism and hospitality. The one time when we did, sadly, was during foot and mouth, when there was a recognition of that. We should be concerned about outcomes and not structures, but I am interested in what you said, Peter, about the need to bang heads together. You may remember when I was Minister for Tourism and Chris Smith was the Secretary of State, we did try to convene a sort of forum every year between government departments to try to get them to recognise exactly the kinds of things Steve was saying when they are making decisions about trams and about roads and about sea defences, that it has a relevance to the tourism industry. You are clearly unhappy with the structure as it is now. Do you think that kind of structure should be resurrected? What would you do to improve it?

  Mr Hampson: It is amazing that government can find the money to invest in tourism when there is a crisis but not when there is not a crisis. Modest investment in tourism rather than panic investment when things have gone horribly wrong is the approach that should be followed. The structure we used to have—with the British Tourist Authority, an English Tourist Board that then became the ETC, et cetera, a smallish department allowing that to get on, et cetera, and a system below with Regional Tourist Boards—all worked very well, in my opinion. Unfortunately, we got what we wished for. When we were asked what we thought of that system, everybody said, in general terms: "This system is failing because it is not doing enough on the marketing side." We got what we wished for, because all of the structure that was there, all of the strategic direction and policymaking was stripped out and the money was put into purely marketing. That is not what the industry wanted but it is what we ended up with.

  Q85  Janet Anderson: It is what they asked for, you are saying.

  Mr Hampson: When they were asked the question: "What do you think of VisitBritain?" they said, "VisitBritain is not very good because it is not spending enough on marketing." It did not mean that everything else that it was doing was not needed. It was wanting more money and more marketing, so the marketing strategy had strategic policy direction. We now have a system where DCMS does not have the staff to have a policy position and to direct the strategic—

  Q86  Janet Anderson: Could I interrupt you there. What do you mean DCMS does not have the staff?

  Mr Hampson: In the tourism department—and I cannot remember the figures—there are something like a dozen people who all work jolly hard and are really good at the few things that they have to do. They are not doing the big, bold strategic leadership. That used to be done by the national Tourist Boards. They had that role taken away by DCMS. The role was sort of given to the Regional Development Agencies. It was: "Regional Development Agencies, carry on," not realising that the Regional Development Agencies are incapable of taking a strategic view. A strategic view is required when there is a difficult decision, so, as soon as you have a difficult decision, you have the nine competing constituent parts deciding.

  Q87  Janet Anderson: There is no coordination and no direction.

  Mr Hampson: There is no coordination. The financial cake has not got any bigger—in fact, in real terms it has shrunk. The amount of money that is being spent on tourism has been at a standstill position for a significant number of years. All that is happening is the resources are being pushed around from one person to another but there is nobody taking control of both the marketing and strategic direction which is required. Without that strategy, without people making hard directions, the industry will always be in competition with each other.

  Q88  Janet Anderson: What is your solution?

  Mr Hampson: There needs to be somebody who has both the staff and the authority and the resources to do the strategic direction, to think about things. As an organisation we have been trying to get DCMS to accept that, since four out of five tourism journeys are made by car and £3 out of £4 spent in the UK tourism economy comes from people who arrive in cars, transport and roads and cars within it are the absolute vital ground. Until very recently, until the new minister had this issue raised, DCMS's answer was, "That's transport. That's not our decision." Of course the civil servants realise that transport is absolutely fundamental but they do not have the resources to deal with it. Basically, they are having to hunker down, keep a low position, do the few things that they must do (that is, look after ministers, parliamentary questions, oversee VisitBritain), but not direct the strategy of the country. So we are in a very strange situation where nobody is giving the direction. There are moves afoot at the moment to try to come up with forums. We have a newly created marketing organisation for England, VisitEngland. That organisation has no more staff, no more resources than it did before, and I suspect—and I do not know—that after tomorrow's CSR announcements from DCMS they may well have less money to spend on English marketing. But you cannot market in isolation; you have to have some direction over the product. In national terms, that is by giving some policy direction, by saying, "You must be a quality scheme" and coming up with systems that make that happen. That is an example; I am not saying that is the solution, but sitting down and saying, "What is tourism going to look like in 15 years time if car transport really becomes an issue? How are we going to get people on to the public transport? How is somewhere like Blenheim Palace going to survive if it needs—and I am making these figures up as I go along—a quarter of a million visitors and they cannot get there by train?" because logic tells you they are not going to be able to. People need to be making those decisions, so there is that big role. There is also some control over VisitBritain and the marketing element. Somebody needs to direct it.

  Q89  Mr Evans: From the three local authorities, are you spending more or less now than you were, perhaps, five years ago on promoting your own areas?

  Mr Vinson: In terms of our local authority, we are spending less, revenue wise, than we were five years ago. We have changed. We had very much a traditional production of a holiday guide, supported by a marketing campaign, with two visitor centres. We discontinued the guide last year, one of the visitor centres has been converted across to a library, and we have changed the access arrangements to the other visitor centre. In terms of revenue spend, it has gone down from 3.5% in 2003-04 of our gross budget to 1% in 2007-08 of our gross budget. We have increased expenditure on capital support for projects like the World Heritage Site status and projects that are very much heritage based, so we see our role as changing from marketing—and you probably would have thought "Where is Caradon?" but marketing in that context we think is better done by the Cornwall level—to product support from a development. Because we get the planning applications for change of use of barns to self-catering units, we think that our role is much more toward the support of the development of the product rather than the marketing of it.

  Ms Malcolm: In terms of Oxford, I would say the budget has probably stayed pretty static for the last five years. To add to that, we are coming under increased pressure year-on-year to justify a local authority investing in what is a non-statutory service, so we have the traditional local authority model in Oxford and for us to justify spending, particularly on the marketing side, is becoming increasingly difficult.

  Q90  Mr Evans: How is tourism in Oxford?

  Ms Malcolm: Growing, interestingly. We gain about 8.8 million visitors every year: 60% of them are international visitors and we are seeing increasing lengths of stay. One of the big issues facing Oxford is in terms of day visitors versus staying visitors and the sustainability of that issue. We are seeing an increase in staying visitors but we still have a long way to go on that.

  Mr Weaver: Our spend on tourism is higher now than it was. The way in which that money is spent has changed. There is significantly more money going to develop the changes in Blackpool physically, in terms of having the capacity to take those changes forward, and, as my colleague said, supporting the capital projects in order to make that change but significantly more. In terms of the direct marketing support, that is higher, but a lot of that is now supported externally rather than from the Blackpool Council taxpayer.

  Q91  Mr Evans: As far as value for money, if an indicator could be invented that was fairly objective how do you think your areas would fare against that? Is it good value for money?

  Ms Malcolm: Very well.

  Mr Weaver: I think it is essential for us. It is essential now to keep Blackpool going and it is essential for the future reshaping of Blackpool. In those terms, it is essential expenditure. I would use that rather than value for money.

  Mr Hampson: There is a question that comes to my mind about what we define as local government spending. If somebody builds a bus shelter in Wolverhampton, it is a bus shelter. If they are building it on Blackpool seafront, it is a tourist structure. I do not follow that argument. A lot of the money that is being spent by authorities with a strong tourism interest are on the things that they should be spending anyway; on roads, on infrastructure. It is wrong for it all to be rounded up, as it is often then presented back as proof that central government does not need to be spending money on tourism support. Local authorities in England spend—I think this is the figure they quote at the moment—£121 million on support to tourism. How much of that is structural support, the sort of marketing support, those things that are genuine support to tourism? We do need to get a focus on what is tourism support and what is just common decent stuff that local authorities and central government should be doing anyway. Is a road to Great Yarmouth a tourism road or is it an essential part of its economic future?

  Q92  Mr Evans: Do you think local authorities could be doing more?

  Mr Hampson: I am surprised they are managing to do what they do, given the pressures that are put towards them. It is a non-statutory function and when the Regional Development Agency system was brought into place there was a common call that went up that said that local authorities should not be as involved in tourism as they had been. There was this thought that marketing a destination should be done on a sub-regional level and we got this term "DMO" which nobody is quite sure of. Is it Destination Marketing Organisation or Destination Management Organisation? In other regions they have come up with different terms. Sometimes it is a town, sometimes it is a sub-region, sometimes it is a whole county. There is this whole argument about local authorities should get out of tourism support. Not unreasonably, local authorities have exactly the same pressure that central government has. There are people in local government who are saying, "Why are we spending money on tourism when schools are more important?" et cetera, so when central government and RDAs said, basically, "Your role should be confined to infrastructure, bins, toilets, roads, etc" that is exactly what a lot of authorities started to do. They said, "Okay, we do not need Tourist Information Centres, they are not our concern. Marketing is not our concern." When that thought came into the minds of the RDAs, I am convinced they thought—because let us not forget that a lot of the money that is spent by local authorities in the destination is contributions from their local business—that those contributions would be rolled into a big pot and handed over. It is just not the way of life. Local authorities would struggle to take that approach, to hand money on a non-statutory function to others. Certainly private sector businesses have just said, "If I'm in Blackpool, why should I support Lancashire? I am not going to put my money into a Lancashire and Blackpool tourism approach." One of the suggestions the North West RDA were making was that Blackpool should not be involved in its tourism, it should be this bigger organisation. As a consequence, what happened in the North West, and why it is working so well, is that the Tourist Boards were created but the local authorities did not give up their role, so they have actually created an extra layer within the North West. It is functioning very well but it is functioning at quite large expense, which only a north west RDA, with the kind of money it has, is able to fund, in my view.

  Q93  Chairman: You have all to varying degrees been pretty critical of DCMS and of the lack of strategic leadership. DCMS has said that under its tourism reform programme, it has overseen a package of operational improvements in key areas. Amongst the results of this, it says there is now a structured programme of engagement with local authorities on tourism. Perhaps I could ask the three of you whether you feel that you are part of a structured programme of engagement with DCMS?

  Ms Malcolm: Certainly from Oxford, no.

  Q94  Chairman: Are you aware of any engagement with DCMS on tourism?

  Ms Malcolm: No.

  Q95  Chairman: Right. Caradon?

  Mr Vinson: No, not practically speaking. As I mentioned, with regards to marketing, as a function, we cooperate with the county level, so it is done by the county rather than us.

  Q96  Chairman: Blackpool, are you talking to DCMS in a constructively engaged way?

  Mr Weaver: On specific projects, I would say, rather than as a structure in terms of tourism generally. Largely, our contact is through the RDA. I would say that I do believe there is an issue in terms of the remit of DCMS and the capacity it has to be able to give tourism the level of support that it needs. I do not think I would be critical of the people in DCMS or DCMS as it is. I think its capacity within government needs to be looked at and the view of government about tourism as an industry needs to be considered. I think that point has been made before, but perhaps I could add something to that: I think that within tourism there is a kind of differentiation. Heritage/cultural tourism, and probably, after foot and mouth, rural tourism, have a kind of hierarchy and the kind of fun-based tourism is regarded with even less seriousness, although in fact they all make an equal contribution in terms of the economy, in terms of jobs. I think that is an issue for government as a whole rather than DCMS.

  Mr Hampson: In DCMS's defence, they are about to launch a destination charter which is aimed at local authorities. There is a lot of work going on but it is all work that is being done without a structure and without funding, and it is all about virtual activity. There is a tourism forum being brought together, which is going to meet twice a year, which is great—the opportunity to talk is always helpful—but it is not the same as a properly funded strategic body that gives direction for tourism in England.

  Q97  Chairman: It was suggested in our previous session that DCMS need not devote a lot of staff resources to tourism because it created the body which should have that lead role and which should spend the money, which is VisitBritain. How much contact do you have with VisitBritain? Do you feel engaged with them?

  Mr Weaver: We are engaged but I would not say it is in any deep way. I would not accept that proposition because I think that DCMS have a very clear role within government, which cannot be delivered by a body on their behalf, which is to influence the other government departments and priorities and strategies to make sure that government as a whole reacts. Without that, I think the changes that are needed in many areas in order to maximise the benefits of tourism simply will not happen. That cannot be passed on. Certain remits of tourism can be passed on to a body like VisitBritain but they cannot do the job that I believe is necessary within government.

  Ms Malcolm: We are quite engaged with VisitBritain, particularly on the marketing side. I would commend VisitBritain for the work that they do on the marketing side, given the resources that they have as an agency. But I would agree with the point made by Peter earlier about the strategic direction. VisitBritain do not see that as a role and it indeed is not their role to deliver a strategic direction for UK tourism. I think we are lacking in that influence at a local level.

  Mr Vinson: With respect to marketing, VisitBritain is doing a good job. We would say that it would be more on their link-up with local-based websites, so that you could see some feedback and results in that way, where there is room for improvement, but, in general marketing terms, very good.

  Mr Hampson: The point about VisitBritain, though, is that when DCMS created the new system that we are all living with, they left VisitBritain with the funding and said, "But you will now spend it on marketing. Your role is as a marketing organisation." You have a fairly small DCMS department who have an agency who do not have a strategic role. VisitBritain are trying to develop a strategic role. It is difficult to speak for them but I suspect they would quite love to have the role to help them to develop the product that they are trying to market, but they cannot do it without resources. We come back to this business of the cake needs to be bigger and divided. There is another issue for VisitBritain if I might touch on it. VisitBritain do a fantastic job promoting this country abroad and it can only be done by a national board. You cannot have a system where every little guesthouse in the world ends up producing an advert that gets to the international market. It just cannot happen. You have to have a national board. The problem with VisitBritain—and I think they may be their own worst enemy—is that they have been quoting a figure of £28 to £30 for every £1 invested in them and DCMS have taken the view: "If that is the case, we do not need to invest money. Let's get the private sector putting money in." There is some argument that the private sector should put a percentage of money in. The problem with it, in my view, is that VisitBritain have been given too high a commercial target. They are told that for every pound that they spend abroad they have to bring in so many pounds of private sector money. The only people who are capable of putting that money up are the big operators, so you end up with VisitBritain working with the likes of British Airways, et cetera, all worthy companies and all the people who should be working with them, but of course those companies want to have a return from it, so the kind of marketing VisitBritain are doing, are allowed to do and can do is being distracted. They should be saying: "Britain is a wonderful place, come to it," not "Britain is a wonderful place—oh, and, by the way, how about flying with x airline or when you are here how about hiring your car from x or y hire car company?" There has to be some thought about how a national body markets the country. Should it be done purely as a brand image marketing activity—as I believe it should—or should it be done as a commercial activity, as DCMS appear to want it to be done?

  Q98  Chairman: If it is done as a brand image marketing operation, essentially that can only be done with public money in your view.

  Mr Hampson: Correct. That is the problem. That is where I think VisitBritain's activities, which are brilliant, have been going wrong. Exactly the same is being replicated with VisitEngland—and to a degree it is even worse because they are being told that their marketing must bring in money. Organisations like mine cannot find the cash for promoting their promotions because the Blackpools of this world cannot see direct response to it. If you put money into a national advertising campaign, you need to have some sort of payback for that and you cannot build national brand campaigns on that basis. It becomes a really difficult issue. I have a document that fell out of my Sunday paper. It is a great document. It is done by VisitEngland and it promotes "Enjoy England itself"—East of England, South of England, Yorkshire and Best Western Hotels. That is a great piece of print, it is a really good marketing tool, but is that the role of the English National Tourist Board to promote three of its sub-regions and a business? I am not sure that it is.

  Q99  Mr Sanders: Are we not missing the point here. The real costs of tourism that fall on the people who live in the tourist resorts is not met by central government grant. If your business is widget manufacture, it is not the same as if your main business is tourism, where you have to have more parks and gardens and to maintain them, you have to have more street cleaning, you have to have more bins for people to put their rubbish in, you need more public toilets. Your Health Service does not get recouped the cost of people who go to A&E because they went out and got drunk on a Friday and Saturday night but were staying in your area because it has clubs and pubs and is an attractive place to come. You have all these costs that fall on people who live in these areas, either as council taxpayers or general taxpayers, that central government is not meeting. The tiny little bit of taxpayers' money that goes to marketing tourism is actually irrelevant. The real costs are these costs, the costs of having to maintain, which the central government grant system does not recognise. Discuss!

  Mr Weaver: You are absolutely right. The cost for us could vary anywhere between £5 million and £8 million per year—without taking into account the impact on the Police Service or the Health Service or other public bodies—over and above what we get through the Revenue Support Grant and the Formula Grant. Certainly a concern for us is that, in the reviewing of the Formula Grant which is taking place at the moment, one of the areas they are looking at is the weighting given for visitors into an area, and if the wrong option is chosen for areas such as ours then that impact will be considerably worsened: it will not just be £5 million to £8 million additional cost on top of what we get from grant, it will be significantly more than that.


 
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