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and outdated information, meaning that the dome's own cashflow -reconciling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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