Examination of Witnesses (Questions 208-219)
RT HON
TESSA JOWELL
MP, MR GERRY
SUTCLIFFE MP, MR
DAVID GOLDSTONE
AND MS
NICKY ROCHE
9 DECEMBER 2008
Q208 Chairman: For the final part of
this morning's session I welcome the Minister for the Olympics,
Tessa Jowell, the Minister for Sport, Mr Gerry Sutcliffe, and
Mr David Goldstone and Ms Nicky Roche from the Government Olympic
Executive.
Tessa Jowell: Chairman, before
we begin in order to help the Committee perhaps I may say that
I spoke to the Mayor in the past hour. Both he and I have had
a email from Mr David Ross indicating that he intends to resign
from all his Olympic-related positions given the difficulties
over his business.
Q209 Chairman: I understand. In due
course you will be seeking a replacement?
Tessa Jowell: Yes. I should like
to place on record our gratitude to him and recognition of the
very significant role he has played both in relation to the work
of the Olympic lottery distributor and in setting up legacy planning
for the Olympic Park.
Q210 Mr Sanders: Had we known what
we know now would we have put in a bid for the Olympics?
Tessa Jowell: Yes, we certainly
would and the reasons now are even stronger than they were when
the Government decided to support a bid in May 2003. Obviously,
you are referring to reported comments of mine in the context
of a speech I gave at a business, industry and leisure dinner.
The single observation I made was in the context of a 25-minute
speech on why investment in the Olympics was precisely the kind
of investment that the economy needed at a time of unprecedented
downturn. I am very happy to elaborate on the economic benefits
that derive from the Olympics.
Q211 Mr Sanders: Even though it will
cost significantly more than expected and the public sector will
have to make a much bigger contribution than expected at the time
the bid was being considered there were reports that the Prime
Minister was told the economic benefits were not that great. Therefore,
if you had known it then can you justify why you still went ahead?
Tessa Jowell: As to what we knew
then, I commissioned the Game Plan report to assess the impact
on levels of participation and legacy from staging world-class
sporting events and a report from PricewaterhouseCoopers to make
an assessment about the likely economic impact. Both reports were
published and made clear what happens in a "do nothing more"
scenario. There is no inevitable legacy of sporting participation
or economic benefit that derives from hosting sporting events
which is why all our planning over the past five years since 2003
has been focused on being proactive and purposeful in realising
the maximum economic benefit—I can go into the detail in
relation to that—and maximising both the legacy in terms
of sporting participation but also elite excellence. I think that
the facts bear out the argument that if you take the initiative
and drive this very hard it is possible to see the kind of progress
that comes only if you are purposeful and proactive.
Q212 Mr Sanders: The 1948 Games were
known as the austerity Games. Given the present financial situation
what would you call the 2012 Games?
Tessa Jowell: I hope that the
2012 Games will be everyone's Games and that there will be an
opportunity for people wherever they live to be part of the Olympics
and their impact on this country. Although the 1948 Games hosted
just after the war have been described as the austerity Games—they
were staged for what now seems like an extraordinary low budget—the
austerity did not refer then or now to the quality of welcome
to visitors, athletes and others, from around the world. I was
thinking about it in preparation for the hearing this morning.
"Austerity" means sternness or severity of manner of
attitude. That will not be what visitors to London will experience.
I hope they will find an open city and a whole country that is
celebrating its opportunity and privilege to host the Olympic
Games, but beneath those big ambitions a lot of detailed planning
is taking place to make sure that they are realised.
Q213 Rosemary McKenna: I hope that
the same ambitions will be realised in Glasgow in 2014 because
I believe that the two are inextricably linked and the benefits
from 2012 will flow to Glasgow. In a Written Answer on 26 November
you said that the Deputy First Minister had declined the offer
of regular quadripartite meetings to discuss Glasgow's preparations
for 2014. Has the situation improved at all?
Tessa Jowell: I understand that
certainly at official level there is contact, but we are very
clear that there is help and advice on "dos" and "don'ts"
that we can provide by way of support to Glasgow. We would like
to be able to do that and hope that the politicians involved will
accept our invitations.
Mr Sutcliffe: We meet as a Sports
Cabinet. I meet with my equivalents in Scotland, Northern Ireland
and Wales to discuss many issues. We discussed 2014 at our previous
meeting in Belfast and it will be on the agenda again. There has
been a letter from the Scottish Minister for Sport asking for
the return of lottery money. That is wholly inappropriate and
was not part of the bidding process for 2014. We are happy to
meet, discuss and help in any way we can.
Q214 Rosemary McKenna: It is really
important that lessons are learned. Have you been in touch with
the leader of Glasgow City Council, Steve Purcell, who is very
keen to have good relationships with you?
Mr Sutcliffe: I think I have mentioned
to the Committee in the past the decade of sport and the events
that we want to attract to the UK over the next 10 years starting
next year with the cricket World Cup. Every year there is a major
event. Clearly, we want to maximise the benefits of those events
of which 2014 is a major part. We shall talk to whoever whenever
required. As I understand it, things are going well in terms of
the development of the aspirations for the Games in 2014 and we
are happy to work with Glasgow as we have been working with the
Indian Government on the Commonwealth Games in 2010.
Q215 Chairman: In the past we have
explored the funding package, in particular the size of the contingency
built into it. At the time we expressed surprise that it was so
large. It may turn out that it is just as well that it is so large.
Perhaps you would update us on your hopes for private sector money
for the Olympics. As to the IBC/MPC, is it correct that essentially
we have given up any hope that that will have a private sector
contribution?
Tessa Jowell: No, we have not
given up. First, at the moment there is no private sector contribution
on the table and that is a change from when the contract was first
signed, but the venue has to be built. The second point is that
this is not a good time to pursue private sector investment, but
remember that there is a three-year build and development schedule
so just because now is not right does not mean that in two or
two and a half years conditions may not be better and more sympathetic
to getting private sector investment. As to the Olympic Village,
we continue to negotiate with Lend Lease. As always I am very
happy to provide the Committee with an in confidence update on
commercial negotiations that it would be prejudicial to make public
at this stage.
Q216 Chairman: That would be helpful,
but you will be aware that the majority of economic forecasters
do not foresee a rapid emergence from this recession and that
in two or three years' time the situation may still be pretty
dire. There must now be a possibility that we will not raise any
private money?
Tessa Jowell: Of course there
is a possibility, but that does not mean we will give up on the
possibility of private sector investment or investment from another
source beyond government. In relation to the IBC/MPC, negotiations
are very intense and active at the moment. We have to begin construction
on site in the spring of next year. Similarly, in relation to
the construction of the Village we are keen to reach a conclusion
on heads of agreement, but it is fortunate that we have a substantial
contingency. In saying that I want to make it crystal clear at
this stage that I do not concede that either of these will be
wholly publicly-funded projects.
Q217 Chairman: It is still your hope
that the majority of the contingency will not be spent?
Tessa Jowell: So far the project
is in time and on budget. You will know that we are to make quarterly
publication of the figures. That will make clear that headroom
is being created within the contingency because risks that were
costed are those that have not at this stage materialised. The
judicious use of contingency, on which the NAO has complimented
the programme, is something that we shall continue to do, but
at this stage I would not revise down our expectation of the final
cost, nor should the use of contingency—the Committee is
very sophisticated in its understanding of these things—be
seen as any kind of failure. It is very often the means by which
the trade-off between time and cost can be properly accomplished.
Q218 Adam Price: The IPPR has just
produced a report saying that in its view the vast majority of
construction jobs on Olympic projects will go to migrant workers.
Do you agree with that analysis?
Tessa Jowell: No, I do not agree
with that analysis. I should say that I have not seen the report
but only the press reports on it. I do not want to cause offence
to any of the researchers. Last week the ODA published a breakdown
of the composition of the workforce which is now at just over
3,000. It showed that 26% of people working on the programme came
from the local area; 10% were previously unemployed; and more
than 50% come from London. By virtue of the nature of the five
Olympic boroughs and London not all of them will necessarily be
British born; they are people who, subject to the ODA's scrutiny,
are entitled to work here, and we are delighted that they are.
One of the very important achievements of the programme so far
has been the employment opportunities created in the five boroughs
and the efforts made to offer skills training so that local people
who may be a very far away in terms of competence in the labour
market have an opportunity to get a job there. Last week I was
out at what is called the digger academy, that is, the Construction
Skills Academy on one of the days it was introducing young women
to the prospects of a career in construction. That has a very
important practical impact because construction is an ageing industry:
45% of people who work in it are aged 45 or over. Therefore, it
is of vital importance to broaden the pool of recruitment and
get more young people working in the industry. In line with Mr
Sanders' first question, we are being highly purposeful in shaping
the achievements which will leave a lasting legacy for that part
of London.
Q219 Helen Southworth: If you define
a local worker as someone who has a local address then anyone
who is on anything other than a short-term contract will have
a local address and by definition he is a local worker.
Tessa Jowell: First, the LDA at
the moment is looking at commissioning a tracking survey. The
question you ask is an extremely important one, so that will help
us to firm up that information. Second, it is my understanding
that the ODA asks for alternative addresses. In order to assess
whether people really are local they are asked whether they have
one or two addresses. If they have just one my understanding—you
may want a detailed paper from the ODA—is that they are
counted as local; if they have two, in other words the one where
they live because they are working in the park and another to
which they go home, they are not counted as local workers.
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