Dome's missing 129 contracts

Report reveals further evidence of financial bungling

David Hencke, Westminster correspondent
Saturday March 30, 2002
The Guardian

New evidence of financial shambles and incompetence at the ill-fated Millennium Dome is to be revealed in a damning national audit office report, which will reveal that paperwork for 129 contracts has vanished.

The report, to be published in April, expresses alarm at the disappearance of documents relating to contracts worth up to £50,000 each. This means that the New Millennium Experience Company had no idea of whether it got value for money or whether any of the deals were fraudulent.

The disclosure comes after police have already arrested people in connection with two fraudulent contracts and a court case is pending.

It adds to the damaging evidence that the dome was over-budget and the project was based on over-optimistic attendance estimates - it had 5.5m visitors instead of the 12m expected. The dome had to be bailed out twice to prevent it going bankrupt.

The report will also disclose that 60 contracts were given without competition - contrary to Whitehall and European Union rules on competitive tendering. Some 20 of these contracts were let after the Millennium Commission had warned the company to stop the practice because it broke the rules.

The disclosures come in the NAO's second report on the running of the dome covering the wind-up of the company and the decision to hand back the site to the quango, English Partnerships. A third report, covering the still incomplete sale of the dome, is expected to equally critical - particularly over the collapsed £125m sale to former Labour donor, Robert Bourne.

The first report has already pointed out that the financial management of the New Millennium Experience Company was in chaos, with some £5.4m of liabilities discovered by auditors which the dome owners did not know even existed.

Some £77m worth of purchasing invoices were also found to contain duplicate and outdated information, meaning that the dome's own cashflow -reconciling debits and credits - was mistated.

The new report reveals that the final total cost of the dome - including taxpayers' cash, lottery money and private finance - came to £789m.

In addition, because of the failure to sell the dome, the taxpayer is now paying another £7.4m to English Part nerships to maintain the empty site.

There is, however, praise in the report for the management of NMEC under David James, its former chairman and chief executive, for the smooth way they liquidated the company and how they saved taxpayers' cash. Closure of the dome is said to have been completed on time, on budget, and without the blunders that accompanied the running of the attraction.

As a result some £25m of taxpayers' cash which was held in reserve to bail out the firm has not had to be handed over and is earning interest in the Millennium Commission's accounts. The money is still being held in case any further unforeseen problems arise. The Commons public accounts committee is to summon Mr James, Sue Street, permanent secretary of the Department of Culture, Media and Sport, and Mike O'Connor, director of the Millennium Commission, to discuss the report on May 1.

MPs are also likely to press the culture ministry to explain why there has still been no apology by Whitehall for not informing them that it had secretly indemnified the directors of NMEC from millions of pounds of losses should the company have gone bankrupt before the dome opened.

Guardian Unlimited © Guardian Newspapers Limited 2002

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