Examination of Witnesses (Questions 60-79)
14 NOVEMBER 2007
DEPARTMENT FOR
CULTURE, MEDIA
AND SPORT
AND OLYMPIC
DELIVERY AUTHORITY
Q60 Mr Touhig: Offer up a prayer
then and light a big candle when you go to church next week! It
has got about as much hope as that, has it not?
Mr Stephens: Well, as I have explained,
over this period there will be an extra £5.2 billion, on
existing projections, going to the existing Lottery distributors.
The Lottery licence-holder and regulator are under an obligation
to maximise returns to good causes. The new licence, we hope,
does provide an opportunity for looking again at those projections.
Q61 Mr Touhig: So we will keep it
under review. The Chairman referred to paragraphs 30 and 31 on
page 14 of the Report. Now, Partnerships UK warned your Department
in 2004 that its estimate of £738 million raised from the
private sector was not based on any robust analysis whatsoever,
yet you still included that £738 million in your budget.
Why?
Mr Stephens: Well, at the time
of the bid, ministers were looking to ensure that there was a
significant private sector contribution, as indeed there will
be. We look to our advisers for advice, as the NAO Report records,
and the first indicative estimate from them was of more than £1.3
billion and we reduced that down to a more conservative estimate.
Q62 Mr Touhig: But you were warned
that the figure was not based on any robust analysis whatsoever
and you still included it.
Mr Stephens: We knew at the time
that there were uncertainties across the whole range in the nature
of the fact that this was not an event that was certain, that
the land was not in public ownership, that the detailed site investigations
could not be undertaken and that the detailed plans at that stage
could not practically or affordably be drawn up, so inevitably
the estimates reflected the state of knowledge and developments
at the time, but were based—
Q63 Mr Touhig: But the decision was
taken, Mr Stephens, to ignore the advice. They did warn you that
the figure was not robust and you did not take any notice of that
and they are proving to be right, are they not?
Mr Stephens: We took full account
of the advice as a whole which is set out in paragraphs 30 and
31 of the NAO Report.
Chairman: It is staggering that the Accounting
Officer could include an estimate of £738 million when he
has actually been warned that it is not based on any kind of accurate
information. That is an appalling negation of your duties as an
Accounting Officer.
Q64 Mr Bacon: I would like to start,
Mr Stephens, with your answer to a question from Mr Dunne. Can
you just clarify that you are absolutely certain, are you, that
none of the landowners who sold land to the Olympics has retained
any reversionary interest?
Mr Higgins: We can respond in
writing, but I am not aware of it. This is the land that was sold
to the LDA and the LDA was not involved in consolidating the land
of the Olympic Park, so it would be an issue for the LDA. If there
is a liability—
Q65 Mr Bacon: What would help us
if you could send the Committee a schedule of all the land involved
that has been acquired for the Olympics, each parcel, because
it would be interesting to see for each one how much was paid
for it and then to check for each of those parcels whether there
are, or are not, any reversionary interests.
Mr Higgins: There are over 2,000
parcels of land and legal rights.
Q66 Mr Bacon: But presumably it is
documented somewhere, is it not?
Mr Stephens: Well, it will be
the responsibility of the LDA, the London Development Agency,
which secured the land and owns the land, but I am happy to pass
the request on.
Q67 Mr Bacon: Well, what I would
like is a letter to the Committee confirming, and I am actually
less interested in whether there are 2,000 or 1,300 or 100 parcels
of land, but I am interested that none of them has any reversionary
interest, and you did not say that they did not.[1]
Mr Higgins: To our knowledge,
there is not. It is actually an issue for the LDA because the
LDA are the accountable body who purchased the land.
Q68 Mr Bacon: Who owns the LDA?
Mr Higgins: It is controlled by
the Mayor, by the GLA. It is not controlled by central government
at all.
Q69 Mr Bacon: It is a public body,
that is the point.
Mr Higgins: Yes, and it obviously
accounts through to December.
Q70 Mr Bacon: Mr Stephens, I would
just like to ask you about the Comprehensive Spending Review because
there was a lot of extra money announced recently. There has been
the £405 million which has been around for a long time and
in the Comprehensive Spending Review there was announced another,
I think it was, £3.623 billion. This is referred to in a
paragraph on Exchequer funding, although it does not actually
talk about the £3.6 billion as announced on 9 October because
this Report, I think, was published prior to that, but, so far
as I can see, you have now committed funding of £4.028 billion,
leaving about £2 billion or £1.9 billion still to be
committed. The Comprehensive Spending Review announcement covers
culture, media and sport, transport, communities and local government.
The £2 billion or £1.9 billion has not yet been committed.
When is that going to be announced and committed because the next
Comprehensive Spending Review, at least theoretically, takes us
to 2011, does it not, so you are expecting an announcement before
then presumably?
Mr Stephens: No, I am sorry, I
did not instantly recognise the various numbers that you read
out.
Q71 Mr Bacon: It is the amount that
is not committed.
Mr Stephens: The amount that is
not committed reflects the cashflow analysis and it will need
to be committed in the next Spending Review, the 2011-12—
Q72 Mr Bacon: Yes, that is my point,
but you are not going to wait until 2011 to announce the remaining
£2 billion of uncommitted funding, are you?
Mr Stephens: Well, it will be
committed in the next Spending Review period.
Q73 Mr Bacon: Yes, but when will
it be announced?
Mr Stephens: If the question is,
"Is the Government committed to it?", yes, it is because
it is set out in the first-year budget.
Q74 Mr Bacon: The question is: when
will it be announced? The Government announced on 9th October
a further £3.5 billion or £3.2 billion, bringing up
the total of committed funds to just over £4 billion, but
in total we are looking for £5.975 billion, I think the number
is, so my point is that there is £1.9 billion which has not
yet been committed and the present Spending Review takes us up
to 2011 and presumably you are expecting to make announcements
about the commitment of those other funds prior to the end of
the 2011 Spending Review cycle, are you not?
Mr Stephens: It is committed in
the sense that the Government is committed to the £9.3 billion
budget that is set there. It will be funded, in the normal way
of funding of public spending reviews, through the CSR process,
so the current CSR sets that out to 2010-11 and the next Spending
Review, whenever that will happen, will set out the working-through
of the £9.3 billion for the years beyond 2010-11.
Q75 Mr Bacon: You mentioned a figure
of £600 million for security. Presumably, that is not yet
covered by this money, is it? The committed funding that has been
announced so far does not cover the £600 million.
Mr Stephens: Not the figure set
out in the CSR, although, as the original statement makes clear
and the NAO makes clear, on security this is a preliminary estimate
and the detailed security strategy, plan and budget is being drawn
up under the leadership of the Home Office and through the office
of the Olympic Security Directorate, and obviously further discussions
about funding to back that up will need to be pursued by the responsible
departments.
Q76 Mr Bacon: You mentioned earlier
what an enormous problem security is and also how you cannot be
expected, fair enough, to predict many years out exactly what
the circumstances will be, but it will plainly be a big, big issue,
as previous Olympics have shown. Who is going to be in overall
charge and who will be accountable for security?
Mr Stephens: The Home Secretary
is in overall charge. She has appointed the Olympic Security Co-ordinator,
Mr Tarique Ghaffur, Deputy Commissioner, and he is supported by
a multi-agency group, the Olympic Security Directorate.
Q77 Mr Bacon: I would like to go
back to the Olympic bid in Singapore. Can you say for sure that
the Government is going to deliver on all the commitments in the
bid book given to the IOC in Singapore?
Mr Stephens: Yes, that is the
Government's commitment and those bid commitments, particularly
as far as the construction of the Games is concerned, are reflected
in the budget.
Q78 Mr Bacon: Have all those commitments
been costed?
Mr Stephens: All the commitments
in the bid book, as far as I am aware, have been costed.
Q79 Mr Bacon: Could you send us a
note, do you think, with a summary of all the commitments in the
bid book and the costs that are attached to them?
Mr Stephens: Yes.[2]
1 Ev 19 Back
2
Ev 20 Back
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