Dome Focus: Millennium Commission

Leaving aside the question of whether the UK’s undoubted need for an overhauled health service is a fair way to measure the success or failure of this or any other project, the fact that the Dome will end the year some way short of the 12 million paying visitors anticipated in the original business plan makes the #758m initiative something of a sitting target.

Added to the shortfall in visitors, however, come the New Millennium Experience Company’s much-talked-about applications for financial aid. In January, the Millennium Commission agreed a #60m grant. In March it faced a further application and forwarded #29m. And this month the commission agreed to advance #43m on the understanding that the NMEC would repay #53m directly to the commission at the end of the year when the Dome is handed over to buyer Nomura.

But for the Millennium Commission, the grant giving body established by the National Lottery Act to distribute cash to individuals and projects relating to the UK’s millennium celebrations, the Dome represents only a part of the story.

The millennium celebrations, of which the Dome is the focus and the centrepiece, represent 20 per cent of the commission’s #2bn budget. There are some 200 capital projects across the UK on 3000 sites and a quarter of these are visitor attractions.

‘It’s a hugely diverse and rich picture,’ says Millennium Commission director and accounting officer Mike O’Connor. ‘We have 10,000 individual award winners so far, we have the Dome, we had the Millennium festival – there were 22 different cities around the country which had a celebration at New Year. Throughout the year there are another 400 events going on throughout the country and many smaller grants still to make.’

The commission’s latest announcement last week is that an additional #6m for the next new year celebrations. As a short-life body set up to specifically address year 2000 celebrations, it has to allocate all of its resources before the year end.

So the Dome isn’t the only visitor attraction that the Millennium Commission has had responsibility for. The Eden Project in Cornwall, the Earth Centre in Doncaster, a environmental centre in Edinburgh called ‘Our Dynamic Earth’ and the Tate Modern on Bankside have all been recipients of Millennium Commission money.

Our Dynamic Earth opened last July. To date it has exceeded its visitor expectations by 48%, drawing in just over half a million as opposed to the 350,000 budgeted for.

The Eden Project in Cornwall is a huge glass bio-dome being constructed over a disused clay pit. Due to open next spring, it will house a whole array of plants and plant systems, the idea being that people will be able to look at the sustainability of different eco-systems.

In the meantime, the project has opened a visitor centre. The project’s management was expecting about 60-70,000 visitors to the end of June but the centre has now drawn in well over 100,000.

Tate Modern, which received a #50m grant from the commission, has drawn in 1.7m since its May opening.

According to the commission very few of its attractions were failing to meet visitor targets this summer. Only four were below target, three of which are outdoor attractions, which suffered from bad weather.

But one of the problems is arriving at realistic expectations. The NMEC famously predicted 12 million visitors over the year – a figure that external consultants agreed was possible and which the commission accepted. In March, the figure was revised to seven million.

As a Millennium Commission spokeswoman points out, permanent attractions opened up and down the country have time on their side. They can bring on longer-term planning for special events and adjust marketing plans to include or expand on corporate strategies.

Dome Europe, the Nomura-backed consortium that has bought the Dome from the NMEC has made some mixed claims for the future. On the one hand the consortium says it envisages a string of domes across European capitals including Frankfurt, Milan and Madrid, with perhaps two more in the UK.

On the other, it predicts only four million visitors next year, rising to six million by 2004.

It is likely that Dome Europe will expand on the Greenwich site, retaining many of the Dome’s original attractions but introducing other features including an indoor adventure playground.

The Nomura-backed consortium gets to build on the experiences of the NMEC and the commission. It gets to exploit a derelict site already decontaminated by someone else and take advantage of the existing structure and regenerated transport links.

O’Connor says that because the commission goes in first on projects, it has to address different issues to a private sector investor, while always bearing in mind its public sector remit.

‘One issue we struggle with is the concept of risk,’ he says. ‘Because we’re using public money we are risk averse. However, because our mission is to fund projects which look forward, it means we have to invest in some innovative ideas. People all over the country play the Lottery so we feel we have a duty to spread the money all over the country. Those two factors taken together, investing in innovation, spreading the money around, means you have to take risks.

‘And therefore we’re funding science centres, centres around environmental sustainability, we’re investing in places like Doncaster and inner city areas like Digbeth in Birmingham – which are not tourist honeypots. And therefore we’re not totally risk averse. If we were to be totally risk averse we would invest in white-knuckle rides in London and Edinburgh – places where tourists already come.

‘We try to minimise the risks but there is an element of risk about our work. And I’d go so far as to say, if we didn’t take any risks we’d be letting people down. We’d be doing the dull, the predictable, the safe.

However, we will be criticised if every one of those risks don’t pay off.

So we have to balance prudent risk taking with the need to innovate.

‘From a public sector point of view, we’re on a hiding to nothing.

‘You model all these things as best you can. But it doesn’t matter how much work you do you won’t come to an answer that is risk free – or the private sector would have been in there doing these things already. But the private sector wouldn’t do the things we do. If the return is not there then the risk is too great.

A lasting judgement on the Dome will probably have to wait beyond even the National Audit Office report (see overleaf). And it remains to be seen if Dome Europe will in turn deliver on its early plans.

In the meantime, Lottery money has helped decontaminate the largest derelict site in southern England.

‘Unless public money goes in there and makes a start,’ says O’Connor, ‘it won’t get done.’

THE MILLENNIUM COMMISSION RECEIVES #1M A DAY BUT TURNS DOWN 90% OF GRANT APPLICATIONS

The financial management of the Millennium Commission is a relatively straightforward matter. The commission is a short-life body now in its sixth year.

It will stop getting Lottery money from the end of this year, but will then enter a three-year wind down process as it continues to bring projects to launch stage.

There is very little public interest in its accounting beyond the attention-grabbing figures of its more high-profile projects.

What is important is the size of the numbers involved. The commission receives a daily income of #1m. As a grant-giving body, by definition, its outgoings equal that, which means that in some weeks, finance director Helen Booth will be authorising payments of much more than #1m. The issue is one of scale.

The commission’s capital projects make up #1.25bn of its #2bn budget.

Payments to capital projects range from #200,000 upwards. Typically the commission grants some 50% of a project’s capital needs. But it does so on condition that it must assess business and operational plans for all projects.

Each project is monitored by an internal case officer and in many cases by external assessor: surveyors and architects for build projects, for instance plus firms of accountants who carry out financial assessments or investigations as appropriate.

Like the payment and monitoring system, the initial application system also has to be visible and accountable. ‘We go through a lot of detailed work with the applicant, testing all the assumptions, before we put our recommendations before the commissioners,’ says Mike O’Connor.

The commission turns down some nine out of 10 applications for grants, but each applicant receives a visit from the body’s unpaid commissioners in order to assess the potential of the project.

The overall commission budget from the Lottery – #2bn – was guaranteed by government.

MIKE O’CONNOR: ‘IT’S MY RESPONSIBILITY TO MAKE SURE THE JOB IS DONE’

As director of the Millennium Commission, Mike O’ Connor is also its accounting officer, which means that he is personally responsible to parliament for securing value for money, avoiding waste and using the commission’s #2bn fund properly.

‘When the Public Accounts Committee looks at what we do, I personally have to go there and explain – not the commissioners. So it’s my personal responsibility to make sure the job is done properly. But I don’t make the decisions, the commissioners make the decisions,’ he says.

Of course, being responsible, but not having the power to make or veto decisions is problematic. If accounting officers do not agree with their instructions, they have to formally request a ‘direction’ or instruction in writing. This is forwarded to the National Audit Office, which then puts together a report on the situation.

‘That’s my protection,’ says O’ Connor.

O’ Connor took the unusual step of requesting a direction from Culture Secretary Chris Smith in May when the commissioners approved a #29m grant to the NMEC.

It was this move that prompted the National Audit Office’s investigation into the NMEC.