London 2012 Olympic and Paralympic Games - Culture, Media and Sport Committee Contents

Examination of Witnesses (Questions 1-)

LORD COE, MR PAUL DEIGHTON, MR JOHN ARMITT CBE AND MR DAVID HIGGINS

15 DECEMBER 2009

  Q1 Chairman: Good morning. This is the Committee's annual session at which we take evidence on the preparation for the London 2012 Games. I would therefore like to welcome the Chairman of the London Organising Committee, Lord Coe, and the Chief Executive, Paul Deighton, and the Chairman of the Olympic Delivery Authority, John Armitt, and the Chief Executive, David Higgins. If we could start off with LOCOG: the LOCOG budget was intended to be fully funded with only a very small public sector contribution covering the Paralympics. Are you confident still that you will be able to meet the budget without further recourse to public funds?

Lord Coe: Chairman, I think I will ask the Chief Executive to report on our sponsorship progress.

  Mr Deighton: Good morning everybody. In terms of our budget, yes, you are absolutely right; the financial model for the Organising Committee is for the expenses and the revenues to come in together around about the £2 billion mark. £2 billion continues to be our target for both revenues and expenditure. On the revenue side, our principal activity in this early part of our lifecycle is on our domestic sponsorship programme, which I have updated you on in previous sessions; and our target for that, as originally set, was between £600-£700 million: with the announcement of our 25th sponsor approximately two weeks ago, we are virtually at the £600 million mark, so the bottom end of our original range. Our target for the remaining just over two and a half years is £100 million and I am confident that we will be able to come in at the top end of that range, because we have identified the specific sponsorship categories. I think the programme has been very, very successful so far; and I think as we get closer to the Games people's anticipation and willingness to be associated with the biggest event that is going on in the country will be very, very strong. We also have approximately £700 million of procurement to use as an enticement for people to become sponsors. In other words, one of the conditions for getting some of those big contracts will be that they also become sponsors; and that is a very powerful piece of leverage in these relatively difficult economic times as well. So perversely, even though the economy is having a relatively hard time, if you are offering contracts alongside the sponsorship that, strangely, works to your advantage; because many companies have excess capacity both in terms of their production capacity and their people, and so the marginal cost of providing them to us in terms of value in kind in return for the sponsorship is actually quite a powerful economic case for them. That is where we are on the principal revenue exposure. The biggest item of revenue that we have yet to contract is naturally our ticketing revenue; and of course we do not begin to sell tickets until 2011, so that is to be expected. We are confident in the work we are doing on ticketing; that our target for that sector, which is approximately £375 million net of VAT, is a realistic target. Again, on the revenue side, we are in good shape. On the cost side, which of course is the other half of the equation which we similarly have to keep under control, there are the three most significant components of expenditure: what we spend on workforce; what we spend on technology; and what we spend on venues and infrastructure, which is really the temporary facilities we put in place and the overlay we add to existing facilities to turn them into Olympic facilities. We are very focussed at the moment on driving down the costs in each of those three areas as we move into our delivery programme.

  Q2  Chairman: So there has been no escalation in projected costs of staging the Games?

  Mr Deighton: On both the revenue and the cost side there are both risks and opportunities, which we monitor in a very aggressive way to continue to try to bring them into balance. So there are risks on both sides and opportunities on both sides. There are things we will absolutely have to manage as we go through these last two and a half years.

  Q3  Chairman: What do you see as the principal risks?

  Mr Deighton: The principal risks on the revenue side are that we will fail to collect the amount of money of between £600-£700 million; because that is a lot of sponsorship money that we will have gathered over a five-year period, in a period of economic recession; but, as I say, I think we have targeted the sectors very effectively. There is always a risk on ticketing revenue because, again, we are in a difficult period. We have to make sure people want to come to the Games. We will be selling tickets for sports where there has never been a ticket sold before, for example handball; so we have to get our marketing programme right; we have to get the excitement about the Games right. On the cost side, our challenges will be around managing our workface, so we can absolutely keep within our workforce budget; and there is always a need for more people, so we have a very, very clear discipline on how many people we hire. On the technology side, we have to deliver quite a complicated technology system, particularly with respect to how we record results, how we do timing, for example; and delivering that, together with the existing Olympic partners, is a significant technology project. As you know, technology projects always have some risk of overrun if not managed tightly. On the venues and overlay, just as the ODA have done in their budget, some of these venue projects present considerable delivery challenges. Again, project by project, we have a strict budget and will look to drive it down; but those I think are the balances of the risks and opportunities.

  Q4  Chairman: Thank you. I am sorry, I should perhaps have asked you, Sebastian, whether you wished to say a few words at the start. Before I bring in Adrian just to explore some of the more detailed elements of revenue projections, perhaps you would like to give us a quick overview.

  Lord Coe: Chairman, we did actually have some opening statements—

  Q5  Chairman: Which you have now lost!

  Lord Coe: —which are now buried! Would it be for the convenience of the Committee to take you through a quick romp across the landscape?

  Q6  Chairman: Yes.

  Lord Coe: I was literally going to thank you, Chairman, for the opportunity to meet with you and give you a progress update. We are now just 955 days until the opening of the Games, that is 988 days until the opening of the Paralympic Games; and our teams at LOCOG, as Paul has quite rightly said, are keenly aware of the challenges that we face to stage two of the largest sporting events in the world. If there is anything I guess I would like the Committee to leave with before Christmas it is the nature and scale and sheer complexity of this project management. We open on 27 July in 2012; we stage 26 simultaneous world championships; we take about two weeks working day and night to transfigure, transform London from an Olympic into a Paralympic city and then we do pretty much the same with 20 Paralympic world championships. Our progress and our momentum have been, to date, extremely strong. Since winning the bid, as Paul as just said, we have raised nearly £600 million in private funding; we have 25 domestic business partners in place; we continue to recruit a world-class team as the organisation, bid-time, has grown from 70 to, Games-time, just over 2,000. We have informed our preparations by our learnings from Beijing, and next February from the Vancouver Games; and we have focussed our operational planning and delivery in over 50 venues across London and the UK. Millions of people are now benefiting being inspired by or delivering this project. You will hear from John in a moment about the progress being made—extraordinary progress being made—in the Olympic Park. As we finalise our plans, we at LOCOG now move centre stage. 2010 is a critical year; the decisions we make now will, in large part, shape the Games that we deliver to this country. We will submit over the course of the coming year 117 planning applications; we lock-down our venue operational plans; we will recruit over 400 new staff to build the capacity of the teams, as Paul has said; we also go to the marketplace as an Organising Committee with £700 million worth of business opportunities that will resonant within businesses the length and breadth of the UK. We will continue our planning for LOCOG's in-venue security responsibilities, while working in partnership with the Home Office, the Metropolitan Police and other agencies who lead in London and across the UK security at Games time. We will also be introducing what I have always considered to be the face of the Games next year, the volunteer programme; and a new face in the form of a mascot—yes, I thought that would raise an eyebrow; and we continue to finalise our ticketing strategy. During this time it is a very simple process really: we plan; we refine costs; we make savings; we raise the money; in 2012 we deliver; and then we dissolve. I will hand over to John to just give you a quick overview of the development in the Park.

  Mr Armitt: As Seb has just indicated, we have made good progress in the last year in partnership with Seb and his team. The photographs I think you have got in front of you give you some sort of images to show the progress that has been made in the way that the Olympic Park is starting to take shape. Today in fact we are announcing that the cable net roof structure for the main stadium is now up and in place; and that is against backgrounds of some not particularly helpful weather over recent weeks, but we remain on-track and will next be putting the lighting towers on top of that cable net structure, so that will protect the stadium up to its full height in the new year; and then after that we will put the fabric covering on the structure. The infrastructure across the Park is continuing to take place: bridges, utilities, underpasses and so on; landscaping has now started; power is now on in the substation across the Park. Indeed, it was particularly pleasing to have Her Majesty the Queen on-site recently to plant the first of the trees, and that is being followed up by a number more being planted. In a sense, what we see ourselves doing with this infrastructure is creating the first phase of Legacy—75p in the pound. I have said it before but I think it bears repeating, what we are spending is long-term infrastructure for the benefit of that part of London; and of course we have now got the Olympic Park Legacy Company established under Margaret Ford, which is a further step forward in ensuring the long-term legacy. When we were here last year, last summer, we were still facing the difficulty of the credit crunch and its impact on the Olympic Village and the Broadcasting Centre; that was resolved. It was resolved by using some contingency but also by taking savings which we have been able to make elsewhere across the other aspects of the project. We continue of course to put a high level of emphasis on containing costs, particularly in the current environment; but I remain confident that we will continue to complete within our overall budget. Part of what is happening of course is that we are filling order books up and down the country for suppliers and many thousands are involved; and, again, part of the benefit I think of us hosting the Games is that that work and contract opportunities are happening at this particular time. We have got companies from Belfast to Bolton, and Perth to Poole, participating in the project. A lot has been achieved, but we are not complacent; we have still got a lot to do; a good few challenges yet to come, I am sure; but I remain confident that we can continue as we have started and we have got a solid foundation in place.

  Q7  Chairman: Thank you. We obviously wish to explore some of those aspects in more detail. Before I bring in Adrian Sanders, I cannot resist: how are you going about choosing the mascot?

  Lord Coe: This is understandably a long and detailed process; it includes various discussions the length and breadth of the country; it involves our creative teams; it involves our commercial teams; it involves a good chunk of our communications team as well; and, as it says on the tin, a mascot is something that people of all ages, of all backgrounds, can feel some affiliation with; and of course, as Paul will tell you, it is a chunk of our revenue as well in terms of our merchandising proposal. Watch this space!

  Q8  Chairman: How much are you spending on the mascot?

  Lord Coe: I think that is all, at the moment, being scoped-out in terms of what it is we are actually finally going to deliver to you.

  Q9  Chairman: You will presumably have in the front of your mind the controversy of the choice of the symbol a few years ago?

  Lord Coe: Yes, but I also have to say that the controversy you talked about has now placed that symbol not only as one of the most recognisable features of this Games but one of the most recognisable global symbols as well.

  Q10  Mr Sanders: I am intrigued. Is it going to be animal, vegetable or mineral?

  Mr Deighton: I will take that as a rhetorical question!

  Q11  Mr Sanders: Too much detail! Are you still pursuing sponsorship deals with a supermarket, given the problems with Coca-Cola and their complaint that such a deal might damage their own promotional campaigns?

  Mr Deighton: This is a very interesting question. The essence of every sponsorship agreement is that each company seeks exclusivity within its own category. Our role is to protect their rights around that exclusivity in that category. The complexity comes from when you introduce potential retailers, because of course we have a number of existing sponsors who sell products and they sell products through different retailers. If we create a retailing category of course those retailers also sell the products of competitors to our existing sponsors. What we have to establish is a transaction which protects our existing sponsors yet would also allow the retailer to be able to activate its rights with the Games. We continue to have discussions to try and make that a possible compromise. Our primary objective is to make sure that the rights of our existing sponsors are properly protected, because of course that is what they have paid for.

  Q12  Mr Sanders: In this instance, Coca-Cola is already the sponsor; so the difficulty is negotiating a supermarket and protecting the interests of the existing sponsor?

  Mr Deighton: Correct.

  Q13  Mr Sanders: In terms of doing that is there not a danger that you might lose the sponsorship of the supermarket; and, if that was so, where would you then go, because that could be quite a big gap?

  Mr Deighton: When I discussed earlier the risks and opportunities, the chance of doing a deal in this category is what I would regard as an opportunity; and therefore we are working very hard to try and come up with a structure that will work both to protect our existing sponsors and one that could work effectively for a potential grocery or retail partner.

  Q14  Mr Sanders: Every little helps, as they say?

  Mr Deighton: We are very focussed on that opportunity.

  Q15  Chairman: Just whilst we are on top-line sponsors, they do appear to exert quite a lot of power. Can you assure us that we will not have a repeat of Beijing where the only food outlet anywhere in Beijing Olympic Park appeared to be a McDonald's?

  Mr Deighton: I can absolutely assure you, and this was a primary part of our food strategy which was only recently released, that there will be a wide range of food available in the Olympic Park and at our other venues; and that wide range of food will include many fine examples of British cuisine.

  Q16  Chairman: Are McDonald's comfortable with that?

  Mr Deighton: They are absolutely comfortable with the concept that the catering experience for all people who attend the Games should be an outstanding one; that they are an important part of it but so also is choice.

  Q17  Chairman: But it is the case that the only branded food will be McDonald's?

  Mr Deighton: They will be the only branded restaurant food there, yes, but there will be very significant unbranded food choice.

  Q18  Philip Davies: Before I move on to ticketing, and following on from Adrian's theme, I want to explore how many of these tickets will be sold at Asda price. Back in 2005, Paul, LOCOG submitted to the Committee that of the 9.6 million tickets that would be sold for the Olympics and Paralympics, 4.3 million would be available at £20 or less at 2005 prices—we have got negative inflation at the moment so presumably they will be even cheaper than that!—with 6.2 million priced at £30 or less, and 7.6 million at £50 or less. However, not long ago, a couple of months ago, at a conference to confirm Thomas Cook as a LOCOG sponsor, you said that a pricing strategy would not be in place until 2010?

  Mr Deighton: Yes.

  Q19  Philip Davies: Is that an indication that you are slightly backtracking on what you said in 2005?

  Mr Deighton: No, it is not an indication that we are in any way backtracking. Our plan on ticketing has always been that we will begin to sell tickets in 2011, and that we will announce our full ticketing strategy in 2010. We have always said that and we are precisely en route to do that. We are absolutely committed in our ticketing strategy with respect to pricing to making sure that significant numbers of tickets are available at highly affordable prices. Indeed, if you are trying to sell 9.2 million tickets to such a range of sports, a number of which are not that well known in the UK, the only way we are going to get full stadia, full of enthusiastic fans, is to make them highly affordable, and that is our objective. It is our objective; it is certainly the objective of the Olympics Minister; it is certainly the objective of the Mayor of London; and those stakeholders are actually defining our final pricing strategy over the months ahead. The only reason it is difficult at this point to talk in such specific terms, as we have with our bid promise, is that of course back then the Games actually had a different portfolio of sports: we had baseball and softball, where you would have had 700,000 tickets at the very low end of the pricing. We just want to make sure we have got a very precise grip of the supply side of the tickets. What we have been working on is our competition schedule, so we know exactly what sport is going to be when; what is in the morning; what is in the afternoon; how many sessions we have. Just last week the IOC confirmed for example the format of the cycling competitions—where they redistributed some events towards the sprints and equalising events between men and women. You have to know what events you are putting on before you know what tickets you have got to sell. We are also looking very specifically at the seating bowl, so again I know how many seats I have to sell. We are working with the broadcasters, for example, on camera positions. If you have lots of camera positions you have fewer seats left to sell. All that work, on the schedule, the seats, is what you need to know for how many you have got; and then on the demand side, we are building up a sport-by-sport plan for who the fans are, and who is going to come and watch these sports. It is a very different proposition to get somebody to come to the final of the 100 metres in the main stadium, compared to someone to come, as I mentioned earlier, to the preliminary rounds of the handball competition where handball has not been regularly played in the United Kingdom. We need a sport-by-sport analysis of where that demand is. When you have got that supply and you have got that demand we will then be in a position to very precisely define the pricing we think we need to fill those stadia and to meet our commitment to provide a very significant number of highly affordable seats within that 9.2 million tickets.

  Q20  Philip Davies: Republic of Ireland football fans might disagree with your fact that people have never paid for tickets to watch handball in the past! I am still puzzled really by your answer, because all of those issues that you went through, and complications, they were all issues and complications back in 2005; but back in 2005 there was a clear commitment that 4.3 million tickets would be available at £20 or less, 6.2 million priced at £30 or less. That seems to me like a very descriptive ticket pricing strategy, as far as I can see. I do not think anyone could really ask for much more than that in terms of a pricing strategy. I still get the impression from what you have just been saying that you are actually backtracking on those figures. Just for the avoidance of any doubt, will you reiterate today that 4.3 million tickets will be available at £20 or less?

  Mr Deighton: I will reiterate today that when we take you through our pricing strategy next year we will be able to demonstrate to you that we have fully met our commitment to making these tickets highly affordable.

  Q21  Philip Davies: So that is, no; you are not going to make that commitment?

  Mr Deighton: No, it is not. We are not comparing like with like, because we have different tickets available. We have got dollars; we have got constant prices; there are current prices; the ticket will include a free travel pass in London; so when you put all those things together I think we need to have a proper understanding of what you are getting for the ticket. This team, together with our stakeholders, are absolutely prepared to stand by the commitment that when you see those prices you will say, "These people have lived up to the commitment of making sure they are affordable". At this point, two and a half years out, we really do not want to get more specific about pricing. You would not set prices with that degree of specificity with the changes in the economy, this wide range of sports, this far out—it would be a mistake.

  Q22  Philip Davies: You set them seven years out, so why would you not set them two and a half years out?

  Mr Deighton: Because we want to get this absolutely right.

  Q23  Philip Davies: How are you going to enforce the law preventing ticket touts at the Olympics?

  Mr Deighton: I think the first thing is in the next one and a half years or so anybody presenting themselves as selling new tickets we want to make quite clear to the general public that cannot be possible, because tickets only go on sale in 2011. Any attempt by anybody—and this is something I think we would like the Committee's help on—if you are hearing about this in your constituencies where they think they are being offered tickets, let us know; we are trying to be as public as possible saying, "Anything that happens pre-2011 before our formal ticket launch can't be possible". Anyone trying to do that is effectively trying to take advantage of the public. I think that is the first thing. Secondly, of course, with Olympic tickets, like Premier League tickets, the law is very, very clear; they cannot be resold at a profit. We will be working with the police to follow up on any instances where we think that is happening; whether it is tracking it down on the internet, or whether it is happening in practice. I think the other thing that is really important, as I suggested earlier, we are very keen in our business plan for ticketing to make sure that we get those tickets initially into the hands of the people who most want them, so the opportunity to create this kind of secondary market is as limited as possible. That is why we are really building a very carefully constructed book for each sport, so once those guys have got that ticket it is not going to come back onto the market. If they do want to resell the ticket, we have a plan to develop a London 2012 ticket exchange so they will be able to resell it through us, so they will have no excuse. For whatever reason they cannot go, we will be able to resell it for them; not at a profit but we will be able to take care of their original purchase price. That again is a small facility which should constrain the supply of potential tickets that could represent a touting risk if not controlled.

  Q24  Philip Davies: So everyone would be able to get a refund if they could not go?

  Mr Deighton: If we can resell it.

  Q25  Philip Davies: What if you cannot resell it?

  Mr Deighton: Then we will not buy it off them; but if we cannot resell it I cannot imagine someone else is going to pay ten times as much for it. So that should not leave us with a touting risk.

  Q26  Philip Davies: The ban will undoubtedly stop people like ebay selling them and that kind of thing. I am not entirely sure what you are going to have in place to stop some spiv in a raincoat around the corner from selling them on. Is there going to be any technology used to try and prevent ticket touting, or are you going to be expecting a police officer stood on every corner around London?

  Lord Coe: Raincoat protection!

  Mr Deighton: There is obviously the risk that that kind of activity could certainly happen, just as it does with the Premiership football tickets; which is why we are focussed on getting these tickets in the hands of people who are not going to resell them; providing liquidity for those who do; and we will work with the police to determine how active they can be about preventing that kind of activity.

  Q27  Philip Davies: Seb, have you found the medals that I read you had lost?

  Lord Coe: It does seem to have raised a few eyebrows, but I genuinely am now busy tracking them down, with any number of promptings from Sunday newspapers!

  Q28  Philip Davies: You have mentioned about volunteering in your opening piece. I just wanted to ask where you are in ensuring that every part of the country gets the opportunity to get a fair lick of the sauce bottle in terms of sending volunteers down to participate in the Olympics?

  Lord Coe: We are pretty advanced actually in that area. As I said, we launch our recruitment programme next year. You are quite right it is a key principle; that volunteering is something that we looked at very, very strongly actually. Even as far back as the bidding process we recognised this was a huge opportunity to engage people the length and breadth of the country in that. We have a volunteering team based at LOCOG headed up by our Director of HR, Jean Tomlin, who again has worked extremely closely not just with our LOCOG needs but also across some of the other groups that we need to work closely with for our volunteer programmes obviously within London and our venues around the UK as well. That is ongoing work.

  Q29  Philip Davies: Will there be any provision for paying people's expenses to go down to London to volunteer?

  Lord Coe: No, we cannot. As an Organising Committee—and no organising committee has ever done that in the past—we are not in a position to pay people to volunteer; nor are we in a position to contribute expenses to housing. What we do think will take place, and we are looking at this in terms of a sort of home-stay approach, is that actually the experience of volunteering in cities is that people go to cities and link up with friends, sleep in houses, even on floors, to do this. We will provide proper facilities for them during the day—regular food, shelter and all the other things you would expect us to provide—but we cannot be responsible for dealing with them outside of their volunteering hours.

  Q30  Philip Davies: So if you do not know anyone in London, poorer people need not apply, is that the case?

  Lord Coe: No, that is not true. The very nature of volunteering—choosing my words carefully here—they do tend to be slightly more enterprising people; and I have little doubt at all that if you want to volunteer and you are based in Sheffield, and you are really keen to do that, this will happen; this will work.

  Q31  Mr Sanders: Is there not an opportunity here for a sponsor, perhaps a transport company, coach, train, A N Other, to actually help with tickets for volunteers to get them to and from London? Has that been explored?

  Lord Coe: Paul talked about the ticketing strategy a few moments ago; the price of a ticket is one important aspect; actually the ability to get to that city; to find the right kind of accommodation; that is why we are delighted that we have got an organisation like Thomas Cook on board; so we will be looking at opportunities, as you have said, Super Savers, all those sorts of things, to make sure that we can get our volunteers to London in the most cost-effective way.

  Mr Deighton: Of course there are some venues around the country. The football tournament in particular, as you know, is distributed around the country so there will be some local opportunities there, and down in Dorset for the sailing of course. The volunteer opportunity is not solely restricted to London.

  Q32  Adam Price: Moving on to broadcasting and particularly the Paralympics, one of the very positive developments in recent years has been a rise in public interest in Paralympic sport. I am sure one of the shared objectives is to use the Olympic Games to leverage that even further. Philip Lane, the Chief Executive of the British Paralympic Association, has laid his cards very clearly on the table that he wants to see the Paralympic Games available free-to-air, the same way the Olympic Games will be. What is your view on that?

  Mr Deighton: Yes, indeed. We talk to Phil Lane of the BPA, a great partner of ours, and we hope they deliver as many medals in London as they did in Beijing; that would be very helpful for us, particularly for our TV viewing figures. We are currently conducting a tender to sell the Paralympic broadcast rights, as I think you know. The criteria we will use for selecting the winner are really twofold: firstly, it is all about the amount of coverage; and the quality of that coverage. I think your observation was spot on: there has been significant emerging interest in the Paralympics. This is a great opportunity because it is coming home—Stoke Mandeville having been the origins of the Paralympics. We have a brilliant team; and really now is the chance to take it to another level in terms of generating broader interest, and TV is key to doing that; both the breadth of the coverage—how much of the Games we can get—and how good the coverage is. You need to get people interested in the Paralympics—both the sport itself and the stories behind some of the competitors—and that is what will make people watch. We are also seeking commitments from broadcasters to do a lot of work leading up to 2012—not just at Games time—to create that opportunity. I am absolutely confident that we will have a level of coverage of the Paralympic Games which is quite unprecedented in its range and quality. I am happy to tell you that. The second component—there is a value component, of course there is—traditionally with the Paralympic Games the cost of the broadcast production is not covered by the revenue that anybody is prepared to pay for it; so it is a net cost to the Organising Committee. Of course that impacts your point of view on the range of coverage. If the revenue is not covering the costs it impacts your view on the amount of investment you are prepared to make in that coverage. Of course our job is to protect the taxpayers' purse by raising as much money through the LOCOG organisation as we can—balancing everything else we have to balance. I do not think money is the primary objective here but it is always an important consideration. Those are the things we are balancing. I think we are in a position to do a really, really good transaction which will provide exactly the kind of boost and coverage to the Paralympic Games which you would like, which I would like, and which Phil Lane of the BPA would like too.

  Q33  Adam Price: What are you saying, that the overriding objective has to be to maximise the audience figures et cetera? If Sky, for example, produces a better proposal in terms of creating excitement and viewer interest then that will score heavily?

  Mr Deighton: Making the Games a spectacular success; generating as much interest as possible; building that audience for the long-term; giving their athletes and their sport as much exposure as possible is absolutely our objective.

  Lord Coe: I think also it was absolutely central to our vision that there were a number of legacies we really wanted to drive towards; clearly improvements in the levels of sporting participation; but in the Paralympics, not just an improvement in the level of Paralympic participation but actually using the Games to change public attitudes towards disability. Paul is quite right to say that the amalgam of issues for me weighs very heavily on the ability to actually not just create great coverage around the Games, but the kind of creativity that enshrines the original concept of the vision as early as possible. I think that is not just the BPA, but that is also something that is really sacrosanct for the International Paralympic Committee based in Bonn.

  Q34  Adam Price: To what extent do you think that having the Paralympics there as part of the core really of the Games helps you to get another wider message across, which is that sport is for all?

  Lord Coe: I think it is absolutely central. We have just appointed Chris Holmes, the champion Paralympic swimmer, as Director of Paralympic Integration. We are the first host city to have the Olympic Games and the Paralympic Games legally enshrined. We are fully integrated. I chair the Organising Committee for the Olympic and Paralympic Games; Paul is the Chief Executive of that organisation. We see no difference at all in the way we go about our daily business in bringing both of those to the table. For us, this is just the way we do it. We would be open about this too—if you look at some of our business partners that we have brought to the table, those business partners, particularly organisations like British Telecom, are actually activating much of their sponsorship in the Paralympic platform; so for us this has been the right thing to do. Organisationally it makes much more sense; and actually commercially there are some big advantages in this too.

  Q35  Adam Price: Could we move on to the venues and the ODA. You mentioned the progress that you have made—the substation was the first building to be completed. As you complete more and more venues, who will fund their maintenance through to 2012?

  Mr Armitt: The ongoing maintenance and basically looking after any of the venues and the Park is something we have always recognised is part of the activities which we have to undertake. Between ourselves and LOCOG we have sufficient money within our budgets to cover that. At the moment we are just finalising with them the details of precisely who looks after what in the run-up to the Games. As I have said, it is an issue which we have always recognised as something which will be there because we always planned to actually complete venues well in advance, in order that LOCOG would have the opportunity to run trial events.

  Q36  Adam Price: So those discussions are still ongoing?

  Mr Armitt: Yes, they are not difficult ones; it is just a matter of refining the detail.

  Q37  Adam Price: You are not having a fight over it?

  Mr Armitt: No.

  Q38  Adam Price: If we go to the other end of the calendar, at what stage will the Park be handed over to the Olympic Park Legacy Company?

  Mr Armitt: Again, that is something which we have to finalise with the Legacy Company; but it is likely to be 2013. The ODA itself is expected to cease by 2014 so, again, it is just a matter of refining the time which suits them as the Legacy Company, when they have got the resources and organisation, to pick things up. There are alterations to be made; transitioning the Park as it is for the Games time; transitioning it towards something which is ready for the Legacy Company to take over; and, as I say, that will take us a year or so post-Games to complete.

  Q39  Adam Price: With land value still falling, they have got a debt to repay. It is a bit of a hospital pass to be Chair of the OPLC, is it not?

  Mr Armitt: It is four years away. I think we all are (and need to be) optimistic about the economy; and therefore one would hope that by then land values would certainly be picking up.

  Q40  Adam Price: I admire your optimism. When will the public have free access to the Park so they can enjoy the investment they have put in?

  Mr Armitt: Again, that will be post the Games and it will depend on particular locations, particular venues, and the degree of alteration which we have to make to them in order to prepare them for public use. The velodrome probably will be one of the earlier ones, because we do not have significant changes to make; whereas on the aquatics there are more significant changes to make it ready for legacy use.

  Q41  Adam Price: You mentioned, and Seb mentioned as well, the opportunities that will still be there next year for companies the length and the breadth of the UK. I saw the latest figures—and it was a question by Pete Wishart, my SNP colleague—with a breakdown of the direct suppliers by nation that you have engaged on construction, and there were a whole range of contracts. Up until the end of October this year, of the 1,063 businesses then that had won contracts only four came from Wales. It is a pretty poor showing, is it not?

  Mr Armitt: That is four of the main contracts which the ODA have let—and I could probably recite which four they are—and I know they are all quite substantial contracts. Equally, you will find that where we have, for example, placed a contract with somebody in Manchester, they in turn will let subcontracts to people in Wales. All you are seeing is the tip of the iceberg really with the ODA direct contracts—about 1,100 compared with the tens of thousands literally which would sit below those prime contracts which we let. There is no doubt that different parts of the country have taken different levels of business interest. The key thing is that the opportunities are open in the way that they should be for public contracts let by ourselves. At the end of the day you deal with the people who come forward; the people who put forward competitive prices.

  Q42  Adam Price: Will it be possible for you to do some kind of supply chain analysis. If what you are saying is right maybe there are companies lower down, so we can get a sense of whether we have had value for our £100 million of Lottery money we have lost in Wales?

  Mr Armitt: We have done an analysis, particularly for the main stadium. These analyses are quite difficult. You are relying on information coming through from several tiers of subcontracts; and it is quite a costly business to just keep pursuing different companies and saying, "To whom have you let contracts?" In the case of the McAlpine Team Stadium contract for the main stadium, there are more than 100 sub-contracts flowing from that which are across the country. We published a map a few weeks ago of contracts around the UK which showed several thousand; but it is not our plan to try and do a detailed analysis of the whole of the development of the Park to identify whether Yorkshire had had more than Wales or whatever.

  Q43  Adam Price: Of the contracts that you are yet to offer in the next year, will they become smaller, do you think? Will there be more opportunities for smaller companies, because presumably you have let the major construction tenders? Will there be other opportunities for servicing companies?

  Mr Armitt: Yes, they are more likely to flow through LOCOG. We are getting towards the back-end of our contracts now. The next phase of procurement is essentially a LOCOG one.

  Lord Coe: We are going to market with about £700 million worth of business next year.[1] In reality that is about 75,000 business opportunities. We have just appointed a Head of Procurement, so this is a big part of what we do over year 2010.

  Q44  Paul Farrelly: I always seem to get landed with the boring figures section—or land myself with it! Beforehand, just following up on Adam's points, one of the issues that I raised with all of you in regular meetings as we have gone on was the importance to local areas, that actually it is a Games of nations but which is felt on the ground. I think it was LOCOG who said there was a contract that was given out for an initial 1,000 mugs for LOCOG to use and it was given to a company that actually imported them from China.

  Mr Deighton: No, that was not true.

  Q45  Paul Farrelly: Could I follow up separately from this session—with your £700 million worth of business you are going to place—how are you looking at the ceramics industry in particular in Britain and helping it make the most of the Olympics?

  Mr Deighton: Actually it will not simply be in the £700 million procurement; I think the ceramics industry will also have an opportunity to participate in our licensing programme. If you look at the precedents within our licensing programme you will find that we have been really focussed on using the best of British, so the licensees we have signed up—for example, for our diary and personal organiser, some are giving out diaries with "2012" on them, we are using Letts which is in Scotland; that is the kind of licensing deal we are doing. In ceramics I am sure that we will come up with licensing arrangements which allow us to present the best of the British ceramics, because that is what people want to buy when they come to the UK to celebrate 2012

  Q46  Paul Farrelly: Indeed, but not just for the commemorative opportunities, but your own opportunities. I think I have said before, I was really pleased to see in Vancouver and at Google in Seattle that the companies there value the quality of British products so much that if you turned the cups over they were made by Steelite or Dudson; it happens in the House of Commons; it happens on Virgin trains when I travel back up from London to Stoke-on-Trent. I would hope that every time that someone turns a cup or a plate over at the 2012 Olympics it is going to be made in Britain, made in Staffordshire. Can you give us that promise?

  Mr Deighton: We will take you through how we are procuring everything that will have an impact on Staffordshire ceramics. I do not have all that information in my head.

  Q47  Paul Farrelly: Fantastic. I will take you up on it. Before numbers, I do not think any discussion of Legacy is going to be complete without you being able to say where you are on the future use of the stadium?

  Mr Higgins: Clearly the stadium now is the responsibility of the Legacy Company.

  Q48  Paul Farrelly: I thought you might say that.

  Mr Higgins: We did have it until the end of 2007 but, given that we do not own the land, we were unable to sign a 20-year lease with any club or any organisation because it is not ours to give. We have a short-term lease that runs out in 2013. What we did design, the white structure you see there, is very flexible. That can have a roofing structure there for 20,000, 30,000, 50,000 or 80,000 seats and I think it is inevitable it should remain there; and therefore it gives a capacity that in 50 years' time if they want to bid for the Olympics again, once again they can reconstruct an 80,000 seat stadium and rebuild it again. The great thing about that is that it is very flexible. The seating is the same: we can take it back to what it was planning approved for, which is back to athletics, a 25,000 or 30,000 seat bowl in the ground, or you can have flexibility as multipurpose sports. The biggest thing we did was to leave that and the 700 rooms that are underneath built into the stadium with sufficient flexibility for the Legacy Company then to determine the use. They are working on it; and we have done further studies over the last few months for them, so there is no point in me giving my personal opinions—they are worthless—it is really up to the Legacy Company and their Board to make a decision.

  Q49  Paul Farrelly: Prior to the incorporation of the Legacy Company, who was conducting negotiations with football clubs, with the Saracens Rugby Club?

  Mr Higgins: We were; that was us. That was in 2006 and 2007. It was a lot more interesting than what we are doing now.

  Q50  Paul Farrelly: Who was conducting negotiations between 2007 and May 2009?

  Mr Higgins: The ODA took over in January 2008, and now the Legacy Company—which is a joint venture between the Department of Communities, local government and the Mayor—has been established in the last few months; so a combination of the ODA and now the Legacy Company.

  Q51  Paul Farrelly: Are the people who are conducting these negotiations the same, or have they all changed?

  Mr Higgins: Some of them are similar.

  Q52  Paul Farrelly: Some of them are similar?

  Mr Higgins: But there is of course a new Chair in Margaret Ford and a new Chief Executive in Andy Altman.

  Q53  Paul Farrelly: What legacy is handed over from one set of negotiations by one body to another body?

  Mr Higgins: We can assure you there are files everywhere, stacks of files, and stacks of consultants' reports. The main thing is, the Legacy Company commissioned the ODA to re-look at the design in the last six months and come back to convince them that there is the flexibility built in the stadium to be able to handle multiple sports, which we have done.

  Q54  Paul Farrelly: Do you know where we are on Legacy?

  Mr Higgins: No, we finished that report a couple of months back. They are only having their first Board meeting this week, so they have just been established. It is not going to be on the first meeting, I am sure; but soon after I am sure they are going to be coming back with a recommendation.

  Paul Farrelly: Chairman, are we seeing the Legacy Company?

  Chairman: Yes, we are.

  Q55  Paul Farrelly: Just on figures, the main stadium, how does the final anticipated cost compare with the original baseline budget?

  Mr Higgins: In our November 2009 report, our quarterly report, we say the forecast is around the same; it is 537, so we do not see that changing.

  Q56  Paul Farrelly: The aquatics value?

  Mr Higgins: Again, the aquatic centre comes in at 245; and again, since July that has only changed a million, so we do not see major changes on that.

  Q57  Paul Farrelly: That is with the roof back in?

  Mr Higgins: The roof has always been on there. Of course, that is with the temporary roof taken away.

  Q58  Paul Farrelly: On the final budget, am I right in saying—and I am sorry to go back over old ground but we keep refreshing the numbers—within the original 8,099 maximum available budget there were no anticipated receipts from the Olympic Village in that original figure?

  Mr Higgins: That is right. The Olympic Village is going to be privately financed, as was the Media Centre. The Media Centre was going to be partially privately financed.

  Q59  Paul Farrelly: There were no anticipated receipts from the Village in that baseline figure?

  Mr Higgins: That is correct.

  Q60  Paul Farrelly: To just compare like with like, we should be ignoring the 324 million?

  Mr Higgins: The 324 million of course is a net figure, because clearly you can see the Village construction on that figure there, the 664, from which then the 324 is taken away from that to give a net cost for the Village. There are a number of receipts coming in because part of the Village deal is the pre-sale of the affordable housing to Triathlon Homes, which is money that is coming in to help fund the Village. The total cost of the Village is clearly above 664 million.

  Q61  Paul Farrelly: I am concentrating on the 324; you say that is a net figure?

  Mr Higgins: That is a net figure; that is right.

  Q62  Paul Farrelly: Net of, what?

  Mr Higgins: It is a figure from private sector sales, and it is private sector sales that we have built into this budget that we expect to be able to return to our funders. There will be some other sales revenue we will expect to come in to help finance the fit-out.

  Q63  Paul Farrelly: That is a gross figure from private sector sales?

  Mr Higgins: There is a gross figure that is higher than the 324. The 324 is a net figure we expect to be able to return to funders from the sales.

  Q64  Paul Farrelly: In terms of just assessing the figures like-for-like, 324 is not in the original baseline decision?

  Mr Higgins: Correct, and neither was the 664 in there either.

  Q65  Paul Farrelly: No, but the contingency was, which you are using?

  Mr Higgins: Correct.

  Q66  Paul Farrelly: Which you are using. If we include the £324 million, we are then adding on an extra amount of contingency as a quid pro quo for using contingency, if you see what I mean.

  Mr Higgins: Some of the contingency is drawn down to fund the village, because you draw down £664 million and then credit £324 million.

  Q67  Paul Farrelly: I understand that, but the contingency we are using was in there.

  Mr Higgins: That is right.

  Q68  Paul Farrelly: I am not misunderstanding that.

  Mr Higgins: No, that is right.

  Q69  Paul Farrelly: John, you are nodding.

  Mr Higgins: The original budget of £8 billion and £99 million included two pots of contingency: one of funders around £1 billion; one of programme around £1 billion. Money was drawn from both those pots of £1 billion to cover the cost of the Village.

  Q70  Paul Farrelly: In the table that is in my briefing notes that has been very helpfully provided, we have a figure of £683 million for assessed programme risks. What is that?

  Mr Higgins: That is on the third line from the bottom. Programme risks are risks outside the direct project risks, so they cover issues from cost inflation or industrial disputes or co-ordination costs or planning risks that may come through. They are the remaining risks in the project to complete the project.

  Q71  Paul Farrelly: Costed risks.

  Mr Higgins: They are estimates.

  Q72  Paul Farrelly: They are estimates.

  Mr Higgins: They are estimates.

  Q73  Paul Farrelly: That is an estimate like in future use of contingencies.

  Mr Higgins: Yes.

  Q74  Paul Farrelly: To completion.

  Mr Higgins: Correct.

  Q75  Paul Farrelly: With no particular timing when they fall.

  Mr Higgins: That is right.

  Q76  Paul Farrelly: How much of the original contingency of £1.972 million is still not allocated? By my calculations, I make it £534 million. Is that correct?

  Mr Higgins: Certainly in the funders that sounds the right figure.

  Q77  Paul Farrelly: That takes you to £683 million. Then £53 million for net future cost pressures and what has already been allocated, so there is £534 million left.

  Mr Higgins: I think that is the figure, of remaining funders contingency that has not been allocated.

  Mr Armitt: I would simply draw a distinction between allocated and released. In terms of budget, contingency which has not been released, then it is still £1.2 billion.

  Q78  Paul Farrelly: I am just trying to get a picture of your anticipated headroom towards the end, before the mechanical and electrical engineers go awry.

  Mr Armitt: Yes, the emphasis on those M&E risks will be in the £643 million.

  Mr Higgins: Our best estimate, which is the forecast to complete, is the £7,241 million, which is a forecast at the end of the project, after receipts have come in from all quarters.

  Q79  Paul Farrelly: If you wanted like for like, it would be £7,241 million add £324 million, presumably, because you would have taken out what was not there before. It would be £7,565 million.

  Mr Armitt: Before the £324 million receipts, that is correct.

  Mr Higgins: Yes.

  Q80  Paul Farrelly: How much are you anticipating that CLM is going to be paid by the time we have finished the project?

  Mr Higgins: We have not put in our details, our forecast. It was released in the annual report. I think the figure was £140 million that has been paid to CLM in the last period. I do not have the exact figure, but we could certainly come back to you on those.

  Q81  Paul Farrelly: Yes, it would be interesting to see what your anticipated payments to CLM are by the end of the project, how they are compared with what you forecast at the beginning.

  Mr Higgins: We let the work orders with CLM in stages. We are just in the final stages of negotiating one of the last tranches of that work order. CLM would bid competitively. They were chosen on value and expertise, but they also coincidentally happen to be the cheaper of the various international consortiums that came in and bid for that. That original tender process set their profit margins. As we set each work order, we then have it externally validated by external auditors and consultants. All of our payments to CLM are signed off by the National Audit Office.

  Q82  Paul Farrelly: A final figure against what you anticipated in the future, and if there is any difference, whether that is going to add contingency, what—

  Mr Higgins: A reasonably substantial part of their final payment will be dependent on performance—final performance on cost in particular.

  Q83  Paul Farrelly: We have discussed with CLM whether they are getting bonuses on like for like costs or whether get a bonus by reducing the costs because you take a big item out.

  Mr Higgins: If we have taken substantial scope out—there were some savings on inflation, for example, which then, taken away, reduced their available headroom. There are adjustments for scope within the contract.

  Paul Farrelly: If you could let us have some figures that would be helpful.

  Q84  Chairman: You will be aware of the comments of the Mayor of Newham that the borough has not seen great benefit in terms of the skills and jobs, and that although 21% of the workforce (the figure you quote) come from the five boroughs, a lot of these are transient workers. How do you respond to that?

  Mr Armitt: I have some difficulty with it. As you say, 21% of the workforce—which is a higher percentage than we expected—are coming from the boroughs. Newham has a substantial proportion of that. We have put several hundred people already through training courses. Nearly all of them were local people, people who were previously unemployed. We have established a new construction training school, not just for the Games but for the longer term in Newham. If you look not only on what is happening on the Olympic Park but the Westfield development, which is clearly going to create thousands of jobs in the longer term within the shopping centre there, and we have worked very closely with the various Newham organisations whose job it is to help people into work. As I say, we have exceeded the expectations, so I would have to disagree with the Mayor's interpretation that Newham had been particularly ill served, as it were. I think they have been well served.

  Q85  Chairman: Have you done any research into the extent to which the workforce from the host boroughs are genuine long-term residents or temporary residents?

  Mr Armitt: We rely on the permanent address which they give in the same way as any other public sector body determines where people are living. The more important thing is that people are living there, and therefore the income which they receive is being spent locally, so that local businesses and so on are benefiting from their expenditure for the period which they are there. That, in a way, is the important point and the jobs are open to anybody who is legally entitled to seek a job on the Olympic Park. As I say, we are pleased with the proportion and the diversity of the people who have come forward. The diversity statistics also demonstrate that they are very much in line with the general diversity of the local boroughs.

  Mr Higgins: The other point we would make is that 631 of the jobs on the site have come through the job brokerage programme. The people that are put forward are put forward by the local borough, so Newham have selected these people from their community and put them forward and said, "We want you to offer these priority jobs to these people." It is up to Newham to decide whether they think they are permanent, short term, or whatever in terms of their residency status.

  Lord Coe: From a LOCOG point of view, we have an education programme within the organisation called Get Set. We have 70 schools in the borough of Newham at the moment taking part in that. We have 14 pre-Games training camps in the borough as well. Of course Newham is the focus for the extraordinary venue legacy that London will be left with and all the skills potential for the future management of that as well. This is a very good story.

  Chairman: The Committee is considering having a public meeting in the borough, so we will hear whether that is confirmed by local residents.

  Q86  Paul Farrelly: Do you have similar statistics for all the boroughs?

  Lord Coe: Yes, we do.

  Q87  Paul Farrelly: Including Hackney. Could you let us have them?

  Lord Coe: I am very happy to do that, yes.

  Q88  Alan Keen: Paul has talked about the Village, but what about the press and broadcasting centre? What forecasts do you have for that?

  Mr Higgins: With the press and media centre, there are two main buildings there, one being in media, which is essentially an office building, and then there are the broadcast facilities, which is a large two-storey structure. Originally the plan was to get around £160 million worth of private investment into that project, but, as we approached the end of 2008, the Government and the ODA board took the decision that we were just chasing the market down and that it made no sense, that it was much better to focus on building a fit-for-purpose facility for the Games, making sure that structurally the building had enough investment in it that was flexible enough for legacy. That is what has been built now. The building has been built on land owned by the LDA, which we expect to be transferred to the Legacy Company. The building will be transferred to the Legacy Company without any debt and with a 1,500 car park next to it. I would have thought that with a car park, next to the A12, with those sorts of facilities and without any debt, it should be attractive. We have had a number of potential tenant users who have approached the ODA, but once again, like the stadium, we are unable to sign long-term leases. We have passed those leads onto the Legacy Company and I know they will continue. There is also the chance to take the advantage of the substantial fit out that LOCOG and the Olympic broadcaster and BT will put into both those buildings.

  Q89  Alan Keen: It sounds optimistic. Are you optimistic?

  Mr Higgins: I would have thought there are not going to be many buildings of that size and scale built in London, East London, in the next few years. Also, if you look at occupation, this is a building which will be occupied end of 2013/early 2014. You are not going to get someone to commit to that today, but you start doing the work now, particularly if are going to leverage that investment by LOCOG and BT.

  Q90  Alan Keen: I am sorry, I missed Desert Island Discs, and this is more of a question that you could have been asked there, but if you had recorded a graph of happiness, I am sure it would have been ten when we won the bid—and we were dancing in the tearoom here at lunchtime—

  Lord Coe: I thought we did that all the time!

  Q91  Alan Keen: We will be tomorrow especially! Then it is going to be on ten at the beginning of the Games itself and all the way through—maybe even 11. Have you had any downs, when you were down to two or three or even zero during these first few years?

  Lord Coe: What has been comforting for me in this whole process is that we have escaped in large part the famous curve of unhappiness that a lot of cities go through. As you would remember, we did come off a peak quite quickly because of the awful events in London the following day.

  Q92  Alan Keen: Yes.

  Lord Coe: But there are a number of things that have been significantly different. First of all, we have maintained extraordinarily high approval figures. Some of those approval figures are at their highest the further you get from London. That may beg other questions, about some of the creativity that we are seeing in communities which know London is not in their backyard, and therefore they really do have to make these Games relevant. Some of the highest approval figures we get consistently are from Northern Ireland. There is something else that is fundamentally different as well. Usually at the time when people are really beginning to question all sorts of things about the Games you are about to go into the proceeding Games, and often, on top of that, you get people saying, "We don't have any medals to show for it, so why are we doing all this in four years' time." Of course, we did. We came out of Beijing with an extraordinary medal haul, both Olympic and Paralympic, and it got people on to a very positive agenda. Most people I spoke to immediately after Beijing just could not wait for this all to take place in our own backyard, with all the potential and legacy benefits that we have talked about. That is in large part due to the quality of our communication teams as well. We view communication not just as something you do during the bidding process but as part of the daily DNA. You have to go on explaining with transparency what you are doing and why you are doing it and when you are doing it—and, yes, sometimes where the disruptions are going to occur—and I think we have done that well. It is also in large part due to the fact that we do not genuinely view this as simply a London Games. I spend and Paul spends—as do David and John—a lot of our working month out of London, explaining what it is we are doing and visiting projects that I know would not be taking place had we come back empty-handed. We have done very well in that. We have three years to go. We are, by nature, slow-burn people, I do not think we get there quickly, but I recognise in communities now that there is a greater understanding than there has ever been that there is something in this for everybody.

  Q93  Alan Keen: I was present when the Speaker helped in handing over the torch for the Commonwealth Games to India. Over 25% of my constituents originated in the Punjab, so I was thrilled to hear that they are going to take the torch around all the villages and then put funding for sport into the villages—villages which probably have nothing at the moment as far as sport is concerned. What are we doing around the regions? Apart from your visiting them and obviously thrilling them when you go there, what else are we doing practically?

  Lord Coe: We are using our programmes in a very smart way. I talked a moment ago about our domestic education programme, Get Set. That now has 10,000 schools in the UK signed up. That is millions of students now involved in our education programme, where they learn about the Olympic and Paralympic values and make them relevant in their own schools and colleges. We have what we call our Inspire brand. We are the first host city to recognise that we want to be able to inspire organisations, particularly in the non profit-making sector, to be able to tap into that. As a very good example of that, I went to Northern Ireland not long ago and witnessed an extraordinary programme called the Pied Piper, driven by a messianic figure Brian Irvine. He brought five schools from across the sectarian divide together to create what in essence was an Olympic Opera. When they had their public demonstration of this, it virtually brought Belfast to a standstill He was able to use the Inspire brand in order to bring sponsors that were not in conflict with the sponsors and partnerships that we bring to the table. He got the Ulster Orchestra, local support, political backing. These are the things we are now beginning to witness. John quite rightly talked about the impact, in a very difficult economy, of some of these contracts that we will be letting next year and John is currently letting. We have 600 or so pre-Games training camps, we have a budget to support National Olympic and Paralympic Committees coming to use those pre-Games training camps in all our regions. That is important, because that is not just about driving some local revenue; it is also about bringing world-class competitors into venues where our local young people can be inspired to watch top judo players, top swimmers. Paul witnessed the Australian swimming team up in Manchester the other day. They were preparing for the World Championships in Rome but at the same time coaching youngsters in swimming. This is a very, very good story.

  Q94  Alan Keen: I have mentioned this a few times in the past, the great relationship that still exists from 1966 between my own team, Middlesbrough, and North Korea, because they played their three games there and knocked the Italians out. Different from those days, we have masses of people in this country now whose families originated from places all over the world. It is thrilling. We want them to be UK citizens but we want them to have their own roots as well. Are we doing anything special to engage those people in supporting those nations from which their roots come?

  Lord Coe: Yes. It is a good opportunity. Last night within our own organisation I spoke to what we call our community advocates, from communities certainly London-wide and more broadly. We are working on engaging those communities in wherever it happens to be, North West Lancashire, the West Midlands, but also through our international inspiration programme, which is our commitment to get 12 million more young people involved in high quality physical education and sport in 20 countries by 2012. I was in India literally a week ago to look at some of the projects that we are funding in conjunction with the British Council and UK Sport and Unicef, but, also, if you look at the Indian community in London, 6% of London now is an Indian community, so there are opportunities both domestically through our engagement and advocacy programmes and internationally through our international inspiration. When I was in Africa not long ago I was asked by a head of state what it was I wanted out of the Games, and I said, "As far as I am concerned, sitting here, I want your athletes when they walk in to our venues to feel they are competing in front of a home crowd." This is an important part of the process.

  Mr Deighton: I was in Middlesbrough a couple of months ago. The training pitch for Middlesbrough is a pre-Games training camp for football, and of course St James' Park is a venue. The opportunity to rekindle some of those links with themes from around the world is very much alive in the North East.

  Q95  Alan Keen: I always ask these questions in these sessions. You have been struggling with costs, and I think doing a great job. Obviously you could not match the forecast that was made when we decided to bid for the Games by a long, long way, but you are struggling with costs. You must know how much we could have saved had it been a national Olympics, so that we did not have to build a new centre completely in East London. Then it would have involved people around the regions and nations in the UK. Does the IOC listen and look towards adapting? My main problem is not the money we could have saved but the fact that nations less well off than us would never be able to bid for a city Olympics and spend what we are spending, but we could save a lot of money if it was a national Olympic bid. South Africa, for instance, have facilities around the whole country, but to build anything in Cape Town or Johannesburg would cost an awful lot. Is the IOC continually thinking about adapting?

  Lord Coe: It is fair to say that the International Olympic Committee recognises that for the maintenance of a global brand you have to be able to take that brand into countries and continents that have not had the Games before. Rio is an extremely good example of that. This is a country that has never had the Games and a continent that has never had the Games, which has the potential to impact and imprint on 180 million young South Americans through the Olympic Movement. The movement is fully conscious that you cannot keep taking it back to hotspots and clusters; you do have to broaden this out. In doing that, you would probably need in some ways to change the approach to the way you support those countries which may not have, on the face of it, the technical expertise, and which may not have entirely the commercial wherewithal. For this to happen, most governing bodies of sport recognise that a handholding process is probably likely to be more in evidence as we go forward, if we are to maintain that interest.

  Q96  Alan Keen: On the way to the Grand Prix Athletics at Crystal Palace the previous year, I was astonished to see the Herne Hill cycle track. I was there at the 1948 Olympic Games, watching the cycling events—all of them. Is somebody looking at the history of the 1948 Games and incorporating that into this?

  Lord Coe: Yes, there is. I should know the answer to this. I met an organisation the other day that is trying to chronicle this. There is the official report from the 1948 Games anyway that the IOC has. I have a copy of it at home; probably alongside the medals, wherever they are. This is an interesting point, because in the course of the next three years we also want to be able to celebrate some of the achievements in 1948 that were there, and many of those competitors are living today.

  Alan Keen: Thank you very much.

  Q97  Paul Farrelly: Alan started with some questions on the broadcast and media centre and also the Village, and before we move off I wanted to ask a couple of questions on that. With respect to the broadcast and press centre, who is leading the legacy negotiations and up until when?

  Mr Higgins: The legacy negotiations on the press centre are clearly being lead now by the Legacy Company, the Olympic Park Legacy Company, and prior to that the LDA. We do not control the freehold of that land there; we are just building it. Up until 2008, towards the end of 2008, the ODA was negotiating. We were then out to tender and we were hoping to bring in a private investor, but it proved not to be value for money at that stage, at that particular time, with the way banking sector was and the risk concerns that private investors had, but I am sure that in a year or two's time it will be an appropriate time to get back out and seek to find another private investor.

  Q98  Paul Farrelly: These pictures are very helpful of progress. So that we are not unfair, it would be quite useful to have a parallel brochure in terms of final design and what they all will look like. At the moment I clearly cannot see the finish of the broadcast and press centre, but it looks to me like a very big double-decker shed.

  Mr Higgins: That is it. I cannot describe it better myself.

  Q99  Paul Farrelly: I may be being unfair to the finishing off. Hackney borough's original ambitions were to have, shall we say, a Shoreditch East. I cannot see that this is going to be attractive to many media or arty types, to come and work in a village feel.

  Mr Higgins: There are three items. There is the big car park, which makes it a very attractive area to invest in, because you do not get approvals for large car parks next to motorways within a mile of Canary Wharf nowadays. The media centre itself is a traditional office building. It is a column-free space. It will be well serviced with lifts and fire rated. It will be a conventional office building and already there are media companies, one in particular, which are thinking of taking space in there. It is years away, of course, but there are organisations that have expressed interest.

  Q100  Paul Farrelly: ITV have been mentioned.

  Mr Higgins: It is early days. As to the broadcast centre, you are right, it is a large tin shed, insulated. The roof structure is built to be part of building regulations, so it is built so it can remain there, but the structure on the outside is designed so it can be split into three different blocks. You can hang a different façade on it, so if you want to put more windows in it is designed so that you have enough flexibility in the structure to allow either officer storage or warehouse or other industrial usages, as may come.

  Q101  Paul Farrelly: If the demand was there, it could be the next distribution centre of Amazon Books or Screwfix.

  Mr Higgins: I suppose it could be all of those things.

  Q102  Paul Farrelly: It could be any of them.

  Mr Higgins: That is right.

  Q103  Paul Farrelly: It could be a world away from what was envisaged.

  Mr Higgins: In the end, you have to work with the market. The market will determine what usages are. The big thing that will deliver it is that it is flexible structurally; it is very well located in terms of transport; and it does not have any debt attached to it, so it is really up for working in the market and with potential tenants.

  Q104  Paul Farrelly: We have a picture of the Olympic Village, which looks like a set of high-rise blocks. How are you managing—because this has changed over times—the architects and the design process and the teams that are involved?

  Mr Higgins: The original master plan, which was approved in 2004, was modified over the last three or four years to better integrate it into the local community groups and to create more public squares and more open space. We have done that, and that amendment was approved 18 months ago. Then each individual block has its separate independent architect, who is an international or leading UK architect, as well as international landscape designers. That allows for the quality. The most crucial thing, having put a lot of time and effort into the design and buildings and public space, is maintenance of this area now. It is really very important that we set aside the money and put the agreements in place to ensure it is done.

  Q105  Paul Farrelly: How many architects are involved at the moment?

  Mr Higgins: At least 12.

  Q106  Paul Farrelly: Who is the lead?

  Mr Higgins: There are lots of different architects. Patel Taylor did the one you are looking at there.

  Q107  Paul Farrelly: Could we have a note on how that has changed and who is involved at the moment?

  Mr Higgins: Yes, of course.

  Q108  Paul Farrelly: Finally, what is the total anticipated outturn cost to the Village?

  Mr Higgins: £1.1 billion.

  Q109  Paul Farrelly: How much of that was involved in your original baseline?

  Mr Higgins: If you go back to the original bid documents that were lodged in 2005, they say the Village would cost around £1.1 billion.

  Q110  Paul Farrelly: Is that in your baseline figures?

  Mr Higgins: No, because originally—and you can go back a long, long way—the Village was going to be privately financed.

  Q111  Paul Farrelly: Exactly, so the Village was not in the baseline figures at all.

  Mr Higgins: That is right. The Village was never in the original bid, it was going to be privately financed. In the baseline project the infrastructure was there, which is the bridges and the roads and the utilities, but the vertical build of the Village was going to be privately financed.

  Q112  Paul Farrelly: I am trying to get to a cost. In the figures I have, I have Village contingency released so far of £587 million. That is the funding for the village so far.

  Mr Higgins: Yes.

  Q113  Paul Farrelly: Of the £1.1 billion, where is the extra £513 million?

  Mr Armitt: We were always going to fund the infrastructure; for example, the railway has been covered over and put into tunnel. All those costs were in our original infrastructure within the Olympic Park, but allocated to the Village because it was part of the Village, but it was never going to be funded by the private sector. The private sector was going to fund the vertical build, and it is therefore the £600 million or so of that which we had to find from contingency and savings.

  Q114  Paul Farrelly: Of the contingency that has been released at the moment, the £587 million, that takes it to the final conclusion.

  Mr Armitt: Yes.

  Mr Higgins: And you need to then allow for the sale of the social housing, which is the £268 million figure, as it brings in receipt, and that helps finance the—

  Q115  Paul Farrelly: Is that including the £324 million?

  Mr Higgins: Perhaps we should send you a summary.

  Q116  Paul Farrelly: Perhaps you could break it down, so we do not get the wrong end of the stick and people do not shift in their seats and get bored.

  Mr Higgins: We will send you a summary.

  Q117  Mr Ainsworth: Alan Keen was asking you about your happiness quota just now. I do not want to reduce it in any way, but I think we have to mention Greenwich Park and the equestrian events and the controversy over the venue there. It was reported in the Evening Standard on 9 December that the cost of staging those events in Greenwich Park with temporary facilities has increased from £12 million to an estimated £42 million. Is that correct?

  Lord Coe: (a) that is not correct, and (b) you will understand, given the commercial sensitivity of purchasing and overlaying all the other things, that those are not figures we would want to state at the moment. But that is inaccurate.

  Q118  Mr Ainsworth: Are you quite sure there is not an alternative venue that you could be using for this?

  Lord Coe: Let me go back to the beginning here. The recognition that we wanted to put the equestrian events in as close to the Olympic Park as possible was an important one. I speak from some experience here. When we started bidding and I became Chair of that bid, pretty much most of the senior riders in this country came to me and said, "Look, do not do what we have always been lumbered with in the past, which is venues that have been a long way from the Games where we felt little or no part of those Games." In fact Beijing was a good example, but for quarantine reasons: the equestrian events were in Hong Kong. For legacy reasons, a way of encouraging a group of people into a sport which is particularly unfamiliar to them was, for us, a very important part of that process. Greenwich Park will be a stunning backdrop. It has been signed off by the domestic federation, the international federation, the television values are extraordinary, and we have worked very, very closely with all the community groups within Greenwich.

  Q119  Mr Ainsworth: What is the legacy for Greenwich Park? What do they get out of it in terms of long-term benefit?

  Lord Coe: First of all, it is encouraging Londoners who are probably not that familiar with equestrian sport, to get involved. Second, there is a large attraction because Greenwich is an extraordinary place to visit anyway. But let us be very clear about legacy in equestrian sport. I have often heard the argument: Why do not take it to Badminton or Burghley or Bramham or wherever? There is no legacy in three-day eventing. All these other venues are often working farms. Badminton House is a good example. His Grace the Duke of Beaufort in his munificence might open the park, but I am not sure that he would want a 23,000 seat permanent arena adjoining the West Wing. We have to be very clear that when we are talking about legacy this is not a bricks and mortar legacy. There are proposals, there are plans within the London Borough of Greenwich, to look at leaving a legacy for Londoners in a riding facility. There is a scheme called Hoof which is currently underway to encourage more Londoners into that, but this is not a straightforward legacy story; this is a much softer legacy story and in our view Greenwich serves as many of those finely balanced judgments as we have had to make.

  Q120  Mr Ainsworth: Your planning application, which is a huge document—and I have to confess I have not read it in the detail which no doubt it deserves—

  Lord Coe: You surprise me!

  Q121 Mr Ainsworth: —does admit that there will be some damage caused to what is a World Heritage Site.

  Lord Coe: Let us be very clear about that. The cross-country section of the three-day event was held on a golf course in Hong Kong and people were playing golf back on that course four days afterwards. We have consulted widely with Natural England, with English Heritage, with the Royal Parks. We have modified our plans in some cases to take into account the concerns of local people: there are no residential road closures; the deer park itself will be closed for only one day (that is the cross-country course); we have maintained the opening of the playground. We have worked extraordinarily closely with all stakeholders. We have a big communications programme going on in Greenwich. It started over a year ago and we are now into the planning applications. This is absolutely the way that it should be proceeding.

  Q122  Mr Ainsworth: Are you concerned that the Metropolitan Commons Act 1861 is going to interfere with your ability to use Blackheath?

  Lord Coe: I am not going to pretend to you that I am an instant expert on 19th century legislation, but I am advised that this has been misinterpreted. The planning application for Greenwich Park is quite rightly driven by Greenwich Council. The consent for the use of Circus Field rests with the secretary of state, but these two issues should not be conflated.

  Q123  Mr Ainsworth: You will not be asking Parliament to revisit the 1861 Act.

  Lord Coe: I think it is very unlikely.

  Q124  Mr Ainsworth: Good.

  Lord Coe: Certainly not before recess, anyway.

  Q125  Paul Farrelly: In a parallel inquiry we had occasion to visit the Bill of Rights recently. We thought we were experts on that, but it turned out not.

  Lord Coe: I do not wish to intrude on private grief, but I think it is unlikely we will be taking you down that road.

  Q126  Paul Farrelly: I love Greenwich Park and this is the only reason for asking this question. It is the London Borough of Greenwich that is the planning authority.

  Lord Coe: Yes.

  Q127  Paul Farrelly: When do you anticipate it going into committee?

  Lord Coe: The process started two weeks ago or three weeks ago.

  Mr Deighton: Yes. I think it will go into committee in March next year.

  Lord Coe: Yes, probably at the end of the first quarter.

  Q128  Paul Farrelly: Planning committees can be fairly unpredictable in my experience. Do you think it is a formality?

  Lord Coe: No. We have 117 planning applications and I do not think we would consider any of them to be a formality, but of course it does have the advantage of the complete support of the local authority in helping us put this through.

  Q129  Paul Farrelly: If planning members for whatever reason—because sometimes they can behave perversely—decided not to follow that advice and recommendation, what contingency plans do you have if it does not run smoothly?

  Lord Coe: We certainly do not take anything for granted. Having sat on your side of the table for a few years, I know that planning is at best an uncertain process. That is something we would visit as and when, but we do not envisage any long-term difficulty.

  Q130  Paul Farrelly: If you were to ask for it to be called in, there might be a role for a secretary of state in the future.

  Lord Coe: That is, by implication, the planning process, yes.

  Q131  Chairman: Whilst we are on venues, you would expect me to mention Woolwich. As far as you are concerned, is that matter now settled absolutely?

  Lord Coe: Yes.

  Q132  Chairman: There is no obstacle to the use of Woolwich for the shooting?

  Lord Coe: No—subject, of course, to local planning.

  Q133  Chairman: Have the shooting community signed up to that?

  Lord Coe: The international federation thinks it is an extraordinary site.

  Q134  Chairman: British Shooting have not yet reached that conclusion.

  Lord Coe: I wish not to intrude on private grief here: British Shooting is a fractured organisation. But we are driving ahead with a venue that has been signed off and will serve its purpose.

  Q135  Chairman: There are no safety problems.

  Lord Coe: No. It meets all the requirements.

  Q136  Chairman: Having examined all the alternatives, you have now completed that process.

  Lord Coe: Yes.

  Q137  Chairman: No further work will be done.

  Lord Coe: No—and with great clarity.

  Q138  Chairman: To return briefly to the Olympic route network, what do you think of the Mayor of London's concern that as many officials as possible should use public transport?

  Lord Coe: The reality of it is that where public transport is the best option, in the past we have seen officials, whether they are members of the Olympic family or even occasionally IOC members, opting for that. It is very important that we do not depart from one place too quickly. The delivery of Olympic and Paralympic Games is a very complex process. The ability to move 10,500 competitors, 4,500 paralympians, 20,000-odd people involved (what we call the Olympic family: their coaches, their officials, their drug testers) around a city Games in a way that allows the Games to operate with no reputational damage to that city going forward—and not all cities have escaped that in the past—is for me acute. That is why the Olympic route network, which I tend to view as a route network to allow people to work on the Games, is absolutely essential.

  Q139  Chairman: Would you accept that once Londoners discover that major thoroughfares are reserved for Olympic traffic, it may dent the enthusiasm for the Games that Londoners currently have.

  Lord Coe: Only on the assumption that that is not done with a proper consultation and communication process of letting people know exactly what we are doing, when we are doing it and why we are doing it. I think most Londoners will understand that they live in one of the most global cities in the world. It is staging an Olympic Games and that is an important part of making sure we come out of this with a great Games, no reputational damage and having been great hosts.

  Q140  Chairman: When will you start trials of the network?

  Mr Armitt: We have recently published the latest iteration of the network for consultation. That consultation over the next few months will then, next year, be publishing another version of that. Clearly, in the year before the Games we will be going through a significant process of telling people what is going to be operating during the Games, how it is going to be operating, the impact potentially at peak hours of Olympic traffic and Olympic spectators combining with people going to work, so that people can have a clear understanding of what is going to be happening. It is quite difficult to create the particular circumstances of the evening of the Opening Ceremony, for example, and try to dress rehearse that prior to the Games, but London is constantly having major events and we have seen time and time again London's ability to cope with these major events. A couple of years ago, for example, we had the first stage of the Tour de France; we have marathons every year here; we have events regularly such as Trooping of the Colour, which take place in the centre of London and therefore potentially must create more difficulties than simply moving people across London to go to particular events at Stratford, Wembley, Earls Court or wherever it might be. The key to this is that it is being thoroughly planned. It is being planned across all the different organisations involved, from TfL to Network Rail and other train operators, with the Metropolitan Police and British Transport Police. There will be a dedicated control centre at which all these organisations will be involved, with a team of people overseeing the whole thing and able to make minute-to-minute, hour-to-hour alterations in conjunction with information which is coming through from LOCOG about timing of events and so on. There is a lot of work going into this. We have had an across-the-board committee chaired by Chris Garnett, who used to be the head of GNER, making sure that everybody is understanding the issues that their particular contribution to this has to deal with, so that at the end of the day you have a very well planned approach ready to go and in July 2012.

  Q141  Paul Farrelly: I have an add-on or supplementary in relation to this public relations challenge. Clearly there is an ongoing disagreement between Transport for London and the US Embassy about payment of the congestion charge. How are you approaching your preparations for the payment of non payment of the congestion charge?

  Mr Armitt: The congestion charge is the responsibility of the Mayor, not us, but I have never heard anybody suggest that the congestion charge is going to be a particular impediment or otherwise to the Games. I would expect it to operate in the way that it normally does.

  Lord Coe: Marathon runners will be exempt!

  Q142  Paul Farrelly: You know the point I am making, that there is nothing more certain to press lights than an ambassador or an official using, say, a non designated car, which might or might not be exempt from the congestion charge, refusing to pay his £8 whereas Londoners have to pay it.

  Mr Armitt: Yes.

  Paul Farrelly: We will leave it here.

  Q143  Mr Ainsworth: I would like to touch on the question of security and the arrangements that you have in place now. Who is responsible for those arrangements and what plans do you have going forward to the opening of the Games and the Games themselves—and of course post-Games too, I guess.

  Mr Higgins: Day-to-day site control is under the responsibility of the ODA. That being said, we have had people from the Metropolitan Police embedded in our organisation for the last four years, including people from the Ministry of Defence. There is close co-ordination on that. The site has recently gone to biometric testing for all of our workforce. We have put 5,000 or 6,000 people through that recently. We continue to escalate the security of the site. We have finished the Olympic fence around the Olympic Park. We take accountability for securing the Olympic Park and Village up to the Games time, and then, post-Games, to hand over to the Legacy Company. During Games time, clearly it becomes the responsibility of the Home Office, Met Police and LOCOG.

  Q144  Mr Ainsworth: Is the site secure?

  Mr Higgins: Yes.

  Mr Armitt: Yes.

  Q145  Mr Ainsworth: And it is patrolled.

  Mr Higgins: Four hundred people on rosters 24 hours a day secure the site internally and externally. We have police based in the site itself as well.

  Q146  Mr Ainsworth: How are your relations with the Metropolitan Police?

  Mr Higgins: Excellent. We have had Met Police based in the middle of our main operation centre in the Park for three years now.

  Q147  Mr Ainsworth: You are happy that everything that needs to be done is being done and will be done.

  Mr Higgins: Yes, we have had Borders and Immigration embedded in our organisation for three years, so they have been there helping to secure people coming into the site as well.

  Q148  Mr Ainsworth: I will move on to the Cultural Olympiad. £16 million worth of Lottery money has gone into this. Is there much to show for that yet? Is it being measured and monitored in any way? We had a note from the National Audit Office saying that there was not really any system in place to monitor the effectiveness of how that money was being spent.

  Mr Deighton: The £16 million of Olympic Lottery distributed money that has gone into the Cultural Olympiad was only awarded a few months ago. That money is being applied to the ten major projects which form part of the overall Cultural Olympiad. The whole process for determining the quality and the impact of those is something that we will be working on over the next 12 months. We have put in place since being awarded that money a Cultural Olympiad Board. We asked Tony Hall, the Chief Executive of the Royal Opera House, to join our LOCOG board and to set up the Cultural Olympiad Board, which comprises a number of luminaries from across the creative sector, to make sure that we absolutely have a set of projects which really do hit our aspirations for the impact the Cultural Olympiad can have. If you look at what has happened already, of the ten projects, three have already launched and are in really good shape. One was Artists Taking the Lead. That was in March 2009, with just over £5 million worth of investment. It was not from the OLD but from the Arts Councils around the United Kingdom. We have a Major Commission which has now been chosen in each of the nations and regions. There are some wonderful, wonderful ideas that are now being brought to life, which will be finished in the main in 2012. We have had a marvellous series of exhibitions in the museum and libraries sector called Stories of the World. It is in 50-odd museums around the country and is already up and running. Earlier on this year, I think in October, we launched a projected called Unlimited, which is the biggest disability arts commission this country has ever seen. Those three are already underway and we have some brilliant things coming. The Royal Shakespeare Company is working on a Shakespeare Festival. That is one of the primary beneficiaries of the OLD money. We have had a carnival proposition, which again will be worked into more detail. The next one to launch will be a music festival, together with the BBC, which will probably be called something like Sounds. If you think that each of the strands of the creative sector has been represented in these major projects, that is where the money is going, and we have had the governance around it that will ensure that it is effectively controlled and the impact of it meets those aspirations.

  Q149  Mr Ainsworth: There is fairly low awareness at the moment of this programme, it seems to us. There was some research done recently which showed that only 4% of people were aware of any Cultural Olympiad activity in the area in which they lived.

  Mr Deighton: First, it is relatively early. Second, think of the Cultural Olympiad as leading up in a crescendo to 2012 when we have the torch relay which sets the country alight, with the opening ceremony and everything going on and these events coming to life. I would also say we are not particularly trying to brand the activity as the Cultural Olympiad. We are trying to use the inspiration of the Games to get people to be involved in activities in their community who would otherwise not be involved: things to do with welcoming the world, things to do with getting young people involved, things that are inspired by the Games. For example, we have something like between 250 and 300 Inspired By projects around the country, many of which are culturally driven. We have London 2012 Open Weekend held on the countdown to the Olympic Games, four years to go and three years to go. Four years to go was something like 650 projects, and three years to go we had nearly 800. That is all sponsored by BP, and, again, right around the country. People would not necessarily think of the term `Cultural Olympiad' but they would think, "I just went to a great event/participated in a great event which was inspired by the Games coming here."

  Q150  Mr Ainsworth: The whole thing then builds and we have the Opening Ceremony. Who is in charge of the creative side of that?

  Mr Deighton: That is our organisation.

  Q151  Mr Ainsworth: You cannot manage a creative event by a committee really.

  Mr Deighton: No.

  Q152  Mr Ainsworth: It takes inspired and experienced people.

  Mr Deighton: Absolutely. After we came back from Beijing, our creative team spent the best part of a year meeting with a great variety of cultural brains around the country to discuss what our Opening Ceremony should be about, what the themes should be, a very open creative process. We are now privately talking to the small number of individuals who have been identified as the potential creative controlling mind for the Opening Ceremony, and we would expect to finalise that appointment next year.

  Q153  Mr Ainsworth: A single appoint. A head honcho to run the thing.

  Mr Deighton: It is not inconceivable that the result might involve aspects of partnership, but we are certainly talking about a tight creative control not a process that is run by committee, absolutely. I think everybody shares your concern that something run by a committee might not produce the best outcome.

  Q154  Mr Ainsworth: I have vivid memories of the Dome. Anything you can do to keep Peter Mandelson out of your creative thinking would be good news. Also, like so many others, I just hope when the night comes it has an amazing wow factor and is not just a total embarrassment. Are you convinced that you are going to deliver something good?

  Mr Deighton: Yes.

  Q155  Mr Ainsworth: On a different issue I would just like to give you the opportunity to say whatever you wish to say on the sustainability of the Games, in terms of impact on the environment and what you are doing to ensure that you meet those promises which were made at the time of the Bid.

  Lord Coe: I will not speak for John or David here, but this was a very important part of our bid. It is a very important part of what we have committed to do. I suppose we can define that by what we are doing, but also by some of the market-led initiatives that I have always believed would drive some of these legacy values. For instance, EDF, our sustainability partner—it is one of four or five, but the lead sustainability partner—within their own activation have set a target of their client base reducing their own carbon footprint, their own household emissions, by 15% between now and 2012. I fancy that has more of a chance of getting there than some other organisations that have been in that same field. In simple practical terms on the Park, 60% of the material that we are bringing in now comes by water and by rail. That, in simple terms, takes 600,000 to 700,000 lorry journeys off London roads. We have widened rivers, not just for legacy purpose but to enable that material to be brought up. 90% of the material we are using on the Park is recycled. We have set very tough standards, both in waste management control and in our own carbon footprint. We are independently monitored by the Commission for a Sustainable London 2012. It is a very important part of our process.

  Mr Armitt: The Olympics provided an opportunity for an exemplar project. Seb has just referred to the London Sustainability group led by Shaun McCarthy, who, together with us, established a series of objectives. For example, 20% of the energy used on the Park will come from renewable sources, so we have a combined cycle power station which is capable of burning biomass. We have planning consent for our first wind turbine. We are ensuring that we make maximum use of rainwater; for example, for flushing urinals. As Seb has said, we have recycled all the waste materials from the site, and we have done the same with the contaminated soil. The Village is being designed to what is called BREEAM level 4,[2] which is the highest level at the moment to which anybody would be designing a similar housing community. Our objective all along, as I say, has been to use it as an exemplar to pull forwards the expectations of future projects as to what can be achieved in this area.

  Q156  Paul Farrelly: As a rider to Peter's whole prospect of managing a creative event by a committee, I recoil at memories of the moments that Liverpool went through in organising its Capital of Culture events. They had a few prima donna moments during that. It has to be clearly managed well, whoever is the creative force behind it.

  Mr Deighton: I would certainly agree.

  Lord Coe: We do not dissent from that.

  Alan Keen: In defence of Peter Mandelson—

  Mr Ainsworth: Why?

  Q157  Alan Keen: I was on this Committee all the way through when it looked at the preparations of the Millennium celebrations. The job that Peter did was to antagonise the press right from the beginning, and he did not have to do anything to antagonise it.

  Lord Coe: Would you like us to stay or...?

  Q158  Alan Keen: You have obviously learned lessons from somewhere, if not from then. There is no doubt about it, the person who does a fantastic job delivering the building and everything else should be the last person to deliver the cultural aspects.

  Lord Coe: This is a very particular skill set. We are very conscious of that.

  Mr Armitt: We are happy to pass the responsibility elsewhere.

  Alan Keen: Anybody who is good at building trenches and putting up structures is not the person best to deliver the culture. My mind is set at rest by your answer.

  Chairman: That is all we have. Thank you very much.

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1   Note by witness: Which will lead to thousands of business opportunities. Back

2   Note: Building Research Establishment Environmental Assessment Method (BREEAM). Back

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Prepared 29 January 2010