ECONOMIC POLICY REVIEW COMMITTEE

Transcription

1 S T A N D I N G C O M M I T T E E O F T Y N W A L D C O U R T O F F I C I A L R E P O R T R E C O R T Y S O I K O I L B I N G V E A Y N T I N V A A L P R O C E E D I N G S D A A L T Y N ECONOMIC POLICY REVIEW COMMITTEE VISION NINE HANSARD Douglas, Friday, 31st March 2017 PP2017/0068 EPRC-VN No. 1 All published Official Reports can be found on the Tynwald website: Published by the Office of the Clerk of Tynwald, Legislative Buildings, Finch Road, Douglas, Isle of Man, IM1 3PW. High Court of Tynwald, 2017

2 Members Present: Chairman: Mr M R Coleman MLC Mr T Baker MHK Mr J Moorhouse MHK Clerk: Mr J D C King Assistant Clerk: Ms N Lowney Contents Procedural... 3 EVIDENCE OF Mr Edward Bowers... 3 The Committee adjourned at a.m. and resumed at a.m EVIDENCE OF Mr Harvey Garton and Mr John McBride, Manx Motor Cycle Club The Committee adjourned at p.m EPRC-VN/16-17

3 Standing Committee of Tynwald on Economic Policy Review Vision Nine The Committee sat in public at a.m. in the Legislative Council Chamber, Legislative Buildings, Douglas [MR COLEMAN in the Chair] Procedural The Chairman (Mr Coleman): Welcome to this public meeting of the Economic Policy Review Committee, a Standing Committee of Tynwald. I am Michael Coleman MLC and I chair this Committee. With me are Mr Tim Baker MHK and Mr Jason Moorhouse MHK. Please ensure that your mobile phone is off or on silent, so that we do not have any interruptions. For the purposes of Hansard, I will be ensuring that we do not have two people speaking at once. The Economic Policy Review Committee is one of three Standing Committees of Tynwald Court established in October 2011 with a wide scrutiny remit. We have three Departments to cover: Cabinet Office, Treasury and DED. On 19th April 2016 Tynwald approved the appointment of Vision Nine as TT Promoter for a period of up to 10 years with an option for a further five years. On 28th November 2016 the Department of Economic Development stated in a media release that it had decided to discontinue the independent promoter tender process for the TT Races and Classic TT Races. On the same day, 28th November 2016, the Minister for Economic Development, Mr Laurence Skelly MHK, referred this matter to us. On 6th December 2016 we announced in a media release that we had decided to investigate. In our media release we invited written submissions from members of the public. We are grateful to everyone who wrote to us. Today we will hear from some of them. EVIDENCE OF Mr Edward Bowers Q1. The Chairman: For the record, could you please state your name and describe your connection with the subject we are looking at? Mr Bowers: My name is Edward Norman Bowers and I am a Chartered Accountant. I have had association with motorcycle sport in the Isle of Man for as long as I can remember. More recently, for the last 10 years I have been treasurer of the Manx Motor Cycle Club, although I am not here in that capacity today. I have taken an interest in this matter and in particular the appointment of Vision Nine as the promoter for the TT, and I became concerned about the process whereby they became 3 EPRC-VN/16-17

4 appointed, given my background knowledge of motorcycle sport and accountancy and hence my submission. Q2. The Chairman: I think at this point I have to state that I think we are a bit restricted in the fact that some issues are still sub judice so I do not think there is any problem referring by name to that organisation, but going into greater depth I think we might be a little bit restricted. What I will ask you to do is to go through your written submission to us and explain the things in there, because there are a few things that interested us, to say the least. So I think as long as we stick to your submission and refer to that, I think we should be okay. Mr Bowers: Yes, I do not know where to start really, it is quite a long submission and I think it becomes a bit technical in places. Do you want me to skip through it to what I consider to be a highlight? (The Chairman: Yes.) Perhaps just in summary I think that we ended up in a bad place and it was the development of a bad plan, really. We have to look at how we got into this position in the first place and I think there are about six steps to this. The first one was the power within the DED, or particularly within the TT Development Group, as it grew over a number of years it was the increasing loss of control over the finances and going over budget on the TT, and the desire to redress that issue. The appointment of independent consultants, people not associated directly with motorsport, was the next step Q3. The Chairman: Can I just ask: are you referring to the Sports Consultancy? Mr Bowers: Yes. That led to the expansion beyond the basic idea of the TT the TT s traditional fortnight being two weeks straddling the end of May and the start of June and expanding that idea to something which it was not; and that was to become a World Series and perhaps a Classic TT as well. When that process itself collapsed, there was no stop, there was no independent review to say whether or not this process should continue; but instead the Department pressed on with the appointment of a promoter and the tendering process. Once the recommendation was received from the Sports Consultancy then we seemed to have a series of rubber-stamping of recommendations initially the recommendation from the Sports Consultancy, and then through the Department, and then through the Council of Ministers, and then finally before Tynwald. There did not seem to be any check within that; there did not seem to be any questions asked about who were the other tenderers and were there any other better offers that were made, or even the credibility of Vision Nine themselves. I have done quite a bit of work on looking at the accounts of Vision Nine. The top company in Vision Nine is Vision Nine Entertainment Holdings plc and that company, from its consolidated accounts, has yet to make any profit and in fact showed a deficiency of assets. Furthermore it showed that its solvency was depending upon bringing in additional investors money to acquire further events. Q4. The Chairman: Can I just stop you a moment there please? If I could go back a little bit further, if we can? This whole process really began with the 2006 Scope of Government Report where they suggested that it should be outsourced. Were any of the people involved in it, such as the Manx Motor Cycle Club and the ACU, asked by the people doing the Scope of Government Report whether they thought this would be a good idea, or why there might be problems in doing this? Mr Bowers: No, not as far as I am aware. 4 EPRC-VN/16-17

5 I became a director of the Manx Motor Cycle Club in 2007 so that was slightly before my time. But no, as far as I am aware there was no invitation to submit views from anybody with interest in motorsport in the Isle of Man. There are quite a number of influential people resident in the Isle of Man who could have given a view, for example, on the viability of a TT World Series. But instead the Department saw fit to engage independent consultants, the Sports Consultancy, to give that opinion and not take local advice at all. Q5. Mr Baker: Could I just ask: do you believe there was a clear understanding of how the TT actually worked, and what was required to deliver it when the decision emerged, or evolved, to actually outsource the TT? Mr Bowers: I think the decision came originally from around about 2011 and I might be wrong on that date but, if not, it would be 2012 when Sports Consultancy were originally asked to provide advice concerning the development of the TT and selling its brand. At that stage I think things were beginning to get driven by the need to find somebody to promote the TT and generate more revenue, rather than addressing the issue of the actual spend on the TT and the routinely going over budget. Sorry, I am not sure if I answered your question there? Q6. Mr Baker: I think it is relevant background but it does not directly address the point I was trying to make. There seems to be some interlinking between the promotion activity of the event and actually the organisation and delivery of it, and it is not clear that there was complete clarity and understanding of both of those separate aspects. Mr Bowers: I think there probably was. I think we have always had this clear distinction between the organiser of the event, which in recent years has either been the Manx Motor Cycle Club itself or ACU Events, either one of those two has been the organiser of the event which delivers the racing on the day, and the promoter which deals with the commercial aspects of the event. There are obvious overlaps in interest but they are defined differences. Q7. Mr Moorhouse: Can I just ask: how do those organisations differ the ACU and the other one that was mentioned, please? Mr Bowers: The Manx Motor Cycle Club? (Mr Moorhouse: Yes.) The Manx Motor Cycle Club has its origins back to 1923 and has been organising the Manx Grand Prix in its various forms ever since then. On occasions it has organised the TT itself. So it is a local body experienced with running races on the Isle of Man Mountain Circuit. ACU Events is a subsidiary of the ACU the ACU being the original promoter of the TT Races dating back to They are not the promoter now, the promoter of the TT Races is the Isle of Man Government, but they have always had this association in some form or other and now latterly as the organiser of the TT. Q8. Mr Moorhouse: So both organisations still exist? Mr Bowers: Yes Q9. Mr Baker: But the ACU have played both of those separate roles that you referred to earlier, Mr Bowers, i.e. they have been an organiser and at times they have been the promoter as well? Mr Bowers: Not in recent years have they been promoter; they have not been promoter for a long time. 5 EPRC-VN/16-17

6 Q10. Mr Baker: So the last time they were promoting was? Mr Bowers: I do not know the details of this, but there was a deal done probably about 20 or 30 years ago whereby the Isle of Man Government bought the rights to become the promoter of the TT and develop its commercial aspects. Up until that point the ACU had historically run the TT, and indeed the TT was the UK s round of the World Championship run by the ACU up until Q11. The Clerk: I am Jonathan King, the Clerk of the Committee. Can I ask, just for the record: you mentioned that the MMCC is a local body, (Mr Bowers: Yes.) and the ACU is an international body? Mr Bowers: The ACU itself is the governing body of motorsport in England, and ACU Events is a subsidiary company which runs motorcycle races; but the only road races it actually runs is the TT. So it almost exclusively runs the TT and it does some other off-road events. The Clerk: Thank you Q12. The Chairman: Were you made aware that they were looking for a consultant to look at doing this, or was it rumoured around on the street, or anything like that, when they appointed the Sports Consultancy? Were you guys made aware or did it just happen to be a fait accompli when they had been appointed? Mr Bowers: It was a fait accompli; we knew nothing about it until it happened. Q13. The Chairman: I believe that their background did not include motorbike racing or even vehicle racing. I do not think they had experience of motorsports? Mr Bowers: Sports Consultancy? No. Q14. The Chairman: Okay, fine. Anyway, carrying on... you do not mind us working this way, do you? Mr Bowers: Not really, I did not know what the agenda was going to be, really, so I expected there would be a bit of zigzagging. My interest came when I found out that Vision Nine had been appointed the promoter, having spoken to the other bidder who tendered for the contract and who I thought was going to be an automatic choice because they were such a good fit. I was surprised and I had never heard of Vision Nine until after they were announced as being the successful bidder, which led me to ask myself questions like: who are Vision Nine? The easiest way to find out who Vision Nine are is just to do a simple company search on the UK Companies Registry which showed that Vision Nine, as I previously mentioned, was a recently formed company it was formed I think in 2004 as an amalgamation of other events companies. It had not made a profit, it had raised capital from other shareholders and it was widening its shareholder base. The holding company, as I mentioned, was Vision Nine Entertainment Holdings Ltd and there is another company called Vision Nine Arts and Entertainment Ltd, formerly known as Madam Events, and another company with the name of Vision Nine Entertainment Group Ltd very similarly sounding names that had formerly been called Madam Ventures. This led me to look at the Sports Consultancy website and I raised the question to myself, What is the connection between the Sports Consultancy and Vision Nine? If I can read a screenshot here from the Sports Consultancy s own website, where they say: 6 EPRC-VN/16-17

7 The Sports Consultancy legal team advised leading events company and agency Vision Nine (formerly Sports Vision) on their acquisition of Madame Events Madam Events and Madam Ventures became the substance of what became Vision Nine Holdings, the group company which raised all the capital to finance their balance sheet Q15. The Chairman: Can I just ask a general question? In your role as being a chartered accountant, I am absolutely certain that you have seen organisations set up in this way where they set up special purpose vehicles (Mr Bowers: Yes.) and there is nothing wrong with them doing it Mr Bowers: Oh no, there is nothing wrong The Chairman: And in fact it is quite a sensible way of doing things (Mr Bowers: Of course.) so if one domino falls the rest does not fall. Mr Bowers: That s right, it is an accepted way Q16. The Chairman: So there is nothing untoward in the way they set their structure up? 200 Mr Bowers: No, not at all. But the question was, what is the connection between Vision Nine and the Sports Consultancy? They answer the question themselves on the Sports Consultancy website which goes on to say, quote: Vision Nine have established prominent action sports and music events over the last decade, including the Boardmasters, NASS, and Freeze London. The Sports Consultancy provided ongoing strategic commercial and legal advice to the Vision Nine team during the acquisition and consolidation phase of the transaction. 205 So in other words, Sports Consultancy were very much part of Vision Nine in their growth and becoming the consolidated company that they were. Q17. The Chairman: So what you are saying, then, is that the Sports Consultancy could possibly have favoured Vision Nine? Mr Bowers: That is a question for your Committee and it is a question which I asked myself, but I cannot answer. Q18. Mr Baker: You mentioned, Mr Bowers, that you felt the other bidder was much better and was almost an automatic choice in your eyes. Can you just tell me a little bit about that bidder and what it was that led you to that conclusion? Mr Bowers: I think to a large extent I must say that you must speak to that other bidder yourself. The other bidder, I know, is currently indisposed but will be available towards the end of next month and would very much like to speak to your Committee. Having said that, I understand the process was that there were initially three serious bidders who went into the final phase, and that reduced to two as North One and the other bidder merged their bids into one single bid. So it only became two bids in the final analysis between Vision Nine and the other tenderer. Q19. The Chairman: Are you referring to the point where the International Series had been removed as an option and it went into just the TT and the Classic? 7 EPRC-VN/16-17

8 Mr Bowers: I think it is largely down to the terms of reference by which people were invited to tender but we were told that the TT World Series idea had been abandoned. But the idea of pressing ahead nevertheless with a promoter was going to continue and I remember Trevor Hussey telling us this because they had made some very interesting contacts during the World Series phase and it followed from that, that they were going to go straight into seeking to appoint a promoter for the Isle of Man parts of it, that is the traditional TT and the Classic TT. I did not think, but I was a bit surprised to learn very recently that the tender document also referred to plans which the tenderer would have to answer regarding the continuation of the TT World Series and how they could develop that in the future. I would have imagined that idea would have been dead in the water but apparently not. Q20. Mr Baker: Just to be really clear and just for the record, can you name the bidder so we know exactly who you are talking about, rather than referring to it as another bidder? Mr Bowers: The other chap that I have been speaking to is called Barrie Baxter, a person with a lot of background within motorsport in general, both in two wheels and four wheels, and a very strong business record. Q21. Mr Baker: So he is the other bidder that you are referring to here? Barrie Baxter? Mr Bowers: I have not seen his bid and I am not too sure if it was put in his name or another name, but he was certainly the person who had the money behind the bid. Q22. Mr Baker: And you referred to North One? Mr Bowers: I have not seen these documents, so I might be slightly inaccurate here, but I understand that at a later stage in the process North One joined in with Barrie Baxter and made a joint bid Q23. Mr Baker: And when you referred earlier to the other bidder i.e. not Vision Nine being almost an automatic choice in your eyes, was that Barrie Baxter plus North One at that point? (Mr Bowers: Yes.) And this was bidding for the promotion role of the TT? Mr Bowers: Yes, and the Classic TT Mr Baker: Okay, I just wanted to be really clear, so thank you for that. Q24. The Chairman: Can I ask: were you surprised that there were no big name organisations that applied to do this? Mr Bowers: Not really, because I think the TT could have been a bit of a poisoned chalice. When you are taking this on you are taking on a lot of unknown costs and there are a lot of difficulties, and there are risks inherent with the sport itself. You have got to have somebody who truly understands the event to bid for this. The Chairman: In some of the documentation that we have seen, the same question was asked of the people involved, like the Sports Consultancy, as to why didn t any big names apply and they basically said it is the risks the deaths, essentially, and they just did not want to be involved with that. 8 EPRC-VN/16-17

9 280 Mr Bowers: Yes, and I think very similar considerations would have been borne in mind for the TT World Series, but even more so. Q25. The Chairman: Okay, please carry on; I know we are dipping in and out Mr Bowers: Yes, I know! I think the things that were surprising about Vision Nine was their apparent acceptance of the contract as it stood. There were certain things that were particularly onerous regarding the key performance indicators and the visitor numbers: how could they guarantee that when they could not even guarantee that the boats would sail on time? I think at the time the bidding process was underway the boat had crashed into the end of the pier again and the ferries were out of operation for several days. So how could anybody sign up to being bound to particularly onerous key performance indicators? I have not seen the tender documents so I cannot directly quote anything but I understand there was a more rational approach to the taking over of costs by the promoter, and because North One were part of the tender process there was further consideration into how the development and the broadcasts on TV would actually happen. Given their general knowledge of motorsport in general, I thought they would be an automatic choice as the appointment for promoter. Q26. The Chairman: In some of the published documents that are there, where it estimates increase in TT to 85,000 visitors, are you aware of any due diligence done on these figures that just come out of the air? Mr Bowers: Well, I can do due diligence on the numbers and things you can get off the company's website, but as for visitor numbers they are just guesses really, and they are hope figures. I believe Vision Nine thought they could increase the visitor numbers and they had some rather impressive graphs showing the number of visitor numbers flatlining at a maximum amount all the way through from the middle weekend into the following weekend, without the dip that we see at the moment with the latter of part of Race Week. They seemed to think that they could fill up that capacity, but I think logistically that would have been very difficult to do considering most of it is Homestay anyway. Also there does not seem to be any consideration about how that would impact on other Government Departments, and the question I ask is who drafted that contract anyway? I believe it was not the Attorney General s Chambers; was it Sports Consultancy? If so, what knowledge do they have of the workings of other Government Departments and their ability to service an increased population of 85,000? Q27. The Chairman: I think on that particular point, we would have to rely on the Department of Economic Development liaising with the other Departments? Mr Bowers: Yes, but as an outsider, I was not the only one who was asking that question. Q28. The Clerk: May I ask, I think it would be useful because I noticed this in Mr Bowers written submission. You have just said, I believe the contract was not drafted by the AG s Chambers. You have told us quite a lot about what you believe: why do you believe that? Mr Bowers: Because I believe that the Attorney General s Chambers in the end were advising that the contract was not sustainable; and there are other pointers as well that it was not drafted locally. Q29. The Clerk: But you have also said in your written submission that you have not read it. 9 EPRC-VN/16-17

10 Mr Bowers: No, I haven t. Q30. The Clerk: So what are the pointers that it was not drafted locally? Mr Bowers: Because if it was, the questions would have been asked about how can the other Government Departments deliver for an increased population. There are costs associated with bringing additional visitors to the Isle of Man and anybody local would have been asking those questions. It is not just a case of, We have always got spare capacity; we can do this, because it is not just the Homestay where people are going to sleep overnight, it is the amount of traffic on the road, it is the amount of accidents that will increase, it is the pressure on hospital beds. The infrastructure itself would need to be brought in it is not just a matter of running the motorcycle races. Q31. The Chairman: I think that gives us some questions when we have DED in. Anyway, please carry on if you can remember where you were. Mr Bowers: I think that is probably all the main points which I wanted to get across, really. I think everything else is detailed within my report. I consider that the actual document itself which was put before Tynwald the Recommendation for the Appointment of a TT Promoter the financial information in that was particularly confused. I spent a lot of time trying to make sense out of that and how that would equate to any exchequer benefit. It seemed to me as if it was just numbers plucked out of a number of documents and put together into a submission to Tynwald, and that hopefully they would pass it. So I have my criticisms about that document but I do not think it would help too much to go into it because I have already detailed the main points in my submission. Q32. The Chairman: Not wishing to put any words in your mouth, because I really would not want to do that (Mr Bowers: Thank you.) Would you, in your own experience, consider that there has been perhaps a little bit of a lack of due diligence with this process? Mr Bowers: Most certainly so. There is lack of diligence in Vision Nine concerning their financial credibility; and also it was their ignorance of the workings of motorcycle sport. I met Julian Topham on two occasions, the first time it was only a bit of an introductory meeting with the members of the Manx Motor Cycle Club. But on the second meeting it became fairly obvious that he was going to be heavily reliant on Paul Phillips, in particular, to tell him how motorcycle racing worked. He did not know much about the North West 200, which was on the weekend that I met him, and he did not know anything about the Southern 100. They were all very big parts of the road racing motorcycle scene. Q33. Mr Baker: You mentioned Paul Phillips there. Do you feel that there was a conflict of interest between people within the decision-making process, other than the Sports Consultancy/Vision Nine relationship which you have already talked about, particularly some of the people within the motorsports group within DED? Mr Bowers: It is difficult to see where this starts, but within the motorsports group they were obviously involved in providing information in the process to the various bidders, and where the distinction lies within the Department I am not too sure. The financial information itself might be one thing, but the actual workings of the event itself is something else. There is a bit of an 10 EPRC-VN/16-17

11 overlap particularly within the large amount of expenditure which goes to riders and teams and the quality of the information that would come from that. During the bidding process there would be close working between members of that part of the Department the Motorsports Group and Vision Nine; and indeed people within that Department were offered jobs within Vision Nine, and if the contract had proceeded then they would have left the employment of Government and worked for Vision Nine. So there was certainly a degree of overlap there. Q34. Mr Baker: The statement you have just made that they were offered and they would have transferred across, what is that based on? Mr Bowers: I think the fact is fairly common knowledge that the three people within the Department were offered jobs within Vision Nine, and then had to be re-employed by the Government after they tendered their resignations to go to work for Vision Nine. Q35. The Clerk: Common knowledge? (Mr Bowers: Yes.) What does that mean? 400 Mr Bowers: If you think that is not true, then I think you should ask those people yourself whether or not that is true. Q36. The Clerk: The Committee does not know anything; the Committee only knows what people tell it. You have come in and made this statement: on what is the statement based? Mr Bowers: What has been told to me. It might have been secondhand telling at the time it was told to me, but it was from more than one source. Q37. The Chairman: Can I just make a point here? I think if I was going to try and do job like Vision Nine intended to do, or whoever won the bid, and I did not have in-house experience, and you knew that the people that we are talking about may well have been laid off, or made surplus to requirements, I think I would probably be very interested in having them come and work with me as well, just to see me through the difficult stage. So there are two ways you can look at this one Mr Bowers: Of course, yes. The Chairman: You can look at it a little bit suspiciously, and the other way you can look at it is it might have been just sensible business practice Mr Bowers: Yes. Sorry, going back to the previous question, I have just remembered as well. David Ronan told me that about them being offered contracts with Vision Nine and would be going to work for Vision Nine. Q38. The Clerk: Was he one of the people you were talking about? Mr Bowers: He was in charge of motorsport for the Department at the time. 430 Q39. The Clerk: Yes, and is he one of the ones who was being offered a job? Mr Bowers: No, he was not. 11 EPRC-VN/16-17

12 Q40. The Clerk: But he was in the Department and he told you that three of his colleagues in the Department had been offered jobs? Mr Bowers: Yes. (The Clerk: Thank you.) Sorry, I didn t remember that the first time round. And going back to your original question: yes, of course it is understandable that they would need to buy in expertise; that is understandable. The Chairman: I was just trying to make the point that it is not necessarily nefarious. It could be regarded as good business practice. Mr Bowers: Yes, but there was a close working relationship for a period between Vision Nine and the Department. Q41. Mr Baker: And just to be really clear because you have said who was not part of that three and you have mentioned Paul Phillips name as being one of those three, could you name the other two, please? Mr Bowers: Bruce Baker and Sophie Lowney. Mr Baker: Thank you The Chairman: I know we have not stuck to the script, but you are the first person that we have spoken to, and I have never been on two wheels, ever apart from a motor scooter in Brighton, many years ago, which I regret! Mr Bowers: Mods and Rockers? Q42. The Chairman Yes! Is there anything you would just like to add at the end? Any points you would like to make? Mr Bowers: I would say that I am not negative about the TT by any means. I think the TT is a fantastic event and I have followed the TT all my life, and I look forward to it this year as well. But its position within Government and being run within a Government Department is difficult. I can see the desire to take the management outside of Government and properly control its finances, but I think this approach of selling it to the highest bidder was very illconceived. It needs a more qualitative approach to find a suitable person within a suitable structure to run this event or that is to say a suitable person, or suitable persons, within a suitable structure to run this event. It does not sit comfortably within Government. Q43. Mr Baker: So just picking up on that point. One could argue that your view there is entirely consistent with the desire originally to outsource it, so it would seem that your main criticism is around who the selected partner was? Mr Bowers: No, I think it is not just where we ended up, it is a case of how we got there. In the end it was a case of selling it to the highest bidder, and the highest bidder was most unsuitable. As I said, it should have been more of a qualitative process to make sure that we ended up with the TT being run within a structure, perhaps outside of Government, but as it would be reliant on Government finances for at least several years, it should be accountable to Government. There are models of public-private partnerships which do work and which could be adopted for those circumstances. 12 EPRC-VN/16-17

13 Q44. Mr Baker: But again, one could interpret what you have just said has not been wildly inconsistent with where the Vision Nine arrangement was going to go. Mr Bowers: No, I would disagree with that. I think that the Vision Nine was really a case of, Right, we have got this problem, we ve got an event which is costing us an enormous amount of money and it is costing us more each year; let s see if we can get rid of the problem and in the process get a big cheque. It does not really work that way. If we are committed to running the TT we must manage it within a structure which is accountable to the people who run it, and accountable to Government who funds it. But running it within a Department is not very suitable. Q45. Mr Baker: So you would see it remaining, effectively, largely controlled by the Isle of Man but sat outside a Government Department structure? Mr Bowers: Yes, it could be wholly or partly owned by Government I think that is detail. But as far as management is concerned you would need professional management, accountable ultimately to its shareholders and run within the norms of corporate governance. Q46. The Chairman Do you mean something like a motorsport statutory board or something like that? Mr Bowers: I have not really got experience of statutory boards, so I cannot really comment on that, I am sorry. I had more in mind of a public-private partnership, such as is run by housing associations and the like. Q47. The Chairman: Can I just ask a question? We had four or five bidders at the first stage, when the expressions of interest were for the TT World Series and TT and Classic TT. Are you aware if there was another document of expressions of interest when the TT Series was ruled out and essentially two people from the original list seemed to be considered for just the TT and the Classic? Was there an expression of interest for the revised remit? Mr Bowers: I am sorry, I do not really know what the process was then, all I really know is what was made public by public statements. The Chairman: Okay. Q48. Mr Baker: You did in your report, though, refer to a short tender process I am just trying to find it within your document (Mr Bowers: Yes.) as though it had emerged from the stopping of the World Series. Yes, you refer to it on page 3: After four years of uncertainty, in October 2015 DED announced that the TT World Series project had been shelved but immediately opened a short bidding period for a Promoter for the 2017 TT and Classic TT races. 530 Mr Bowers: Yes, I think the end date for that was February the following year, so there was only a matter of about three or four months for anybody coming in to do all their diligence it was very short. Q49. Mr Baker: You are quite specific about your dates: was that based on seeing documents from? 13 EPRC-VN/16-17

14 Mr Bowers: Yes, I think that is just what is publicly available. I think the October date was the date on which it was publicly announced that the TT World Series had been shelved, and I think the February date was the date which was the closing of the bidding process. Q50. Mr Baker: Are you suggesting that was an inappropriately short period (Mr Bowers: Yes.) or impractical? Mr Bowers: I think it was, for anybody who wanted to Quite possibly people might have been interested in the TT but most certainly were not interested in a TT World Series. For them to come in November or December and start picking it up and working over the Christmas period and trying to put in a proposal, and getting all the information and the financial information from Government to put a submission in by February, was quite a tall order. But it would favour people who had already made bids for the TT World Series. Q51. The Chairman: In fact in the documentation that we have, for the second phase the date for the pre-qualification questionnaire to be returned and the tender date are just one day apart. Mr Bowers: Yes, quite The Chairman: I think I am right in saying that Q52. Mr Baker: Clearly something as short as that is on first principles inappropriate; but with the three-month period you suggest even that end-to-end was too short? Mr Bowers: Yes, and I certainly gathered the impression that there was already a favoured bidder. I was in attendance at a meeting I think it was in late December in that year, at which Trevor Hussey said that the TT World Series tendering process had not been a waste of time, they had learned some valuable lessons and they had met and spoken to some people who had shown great interest in running the TT itself. So infer what you like from that. Q53. The Chairman: Do you have any questions for us, by any chance? You can see the route we are going. Mr Bowers: No, thank you very much and thank you for giving me the opportunity to appear before you today. The Chairman: Thank you very much. The Committee adjourned at a.m. and resumed at a.m. EVIDENCE OF Mr Harvey Garton and Mr John McBride, Manx Motor Cycle Club 575 Q54. The Chairman: Can I welcome you to this meeting of the Economic Policy Review Committee. Can you just ensure that your phones are off; if you were not here for the beginning of Mr Bowers session, please make sure your phones are off because it interferes with the recording. 14 EPRC-VN/16-17

15 Could you please state your names and your connection with the subject that we are looking at here, which is the contract process and history of the failed outsourcing of the TT promotion and Classic promotion? Mr Garton: My name is Harvey Garton, not Gorton there is an a where the first o is! I am the Chairman of the Manx Motor Cycle Club and I am an ex-chief scrutineer at the TT and the Manx Grand Prix. I currently scrutineer for all the events on the Island and I am part of a huge band of volunteers which ensure that the TT and the Manx Grand Prix and the Southern, and even Jurby, continue to survive. Just before I hand over to John to introduce himself, I would like to make a brief introductory statement here that our input into this is obviously based on the Vision Nine scenario and therefore is historical. I am pleased to report that relationships with DED in recent months are now very much different to where they were, and for the first time in some little while we see that perhaps there really is a future. Q55. The Chairman: Can I just ask: what caused the disaffection between you? Mr Garton: I think it started back in 2012 when it was announced that the Manx Grand Prix was going to be dead in the water and that coincided at the time I think with the suggestion of a Classic TT, a rebranding of the classic Manx Grand Prix, which we had introduced back in That proposal looked like it might carry some weight except that there was a massive public reaction which resulted in a very well-attended meeting up at the late lamented Mount Murray, where we even had people come over from the UK to input into that meeting. That was livestreamed around the world, and I think that Government got the message that it had a real problem on its hands if it really did kill off the Manx Grand Prix. You can imagine from that time onwards, although the Manx had survived, we were always wandering around looking over our shoulders at where the future really was. Q56. The Chairman: Was any consultation done with you before the proposal was announced? Mr Garton: No Q57. The Chairman: If I may, can I just ask you a couple of questions? How many people from your organisation help with the running of the Races? Mr Garton: We have a committee of 18, (Mr McBride: It s 18, yes.) who are, in the main, all senior officials, or Heads of Department as we call them, at not only the Manx Grand Prix but at the Classic TT and indeed the TT itself. Although the TT itself is run by ACU Events Ltd, effectively that is the Clerk of the Course from ACU Events, plus the Manx Motor Cycle Club. Members of the Manx Motor Cycle Club occupy other roles at lesser levels right throughout the organisation, although it has to be said that obviously the largest volunteer base is of course the Marshals Association who will provide something like 1,200 to 1,400 signed-on Marshals for each of the events. Perhaps also, just to revert back briefly to the Manx Motor Cycle Club, it has to be said that all of the people occupying those roles occupy them on a volunteer basis and none of these events could go ahead and this was always one of the major worries with the concept of handing it out to somebody who was going to be making money out of the project or potentially making money out of the project that the volunteers could start to turn round in numbers and say, Well, hang on a minute, if they are making money out of it, why can't I? 15 EPRC-VN/16-17

16 If you lose that volunteer base, and it does not matter how important the TT is, it will never ever continue, nor will any of the other events continue if you have to pay everybody. Even if you are paying below the minimum wage it just would not work! Q58. Mr Baker: Can I just clarify, because clearly within the organisation structure of the TT and ACU Events there must be people being remunerated the Clerk of the Course, etc. and ACU Events must be getting some return for what they do. Is that correct? Mr Garton: I understand that ACU Events have a contractual arrangement currently with DED and I presume that some money changes hands, but I am not aware of that. Q59. Mr Baker: But the volunteer base, which is clearly integral to the operation of the event, finds that acceptable but would not with a more overtly commercial operator. Is that the basic principle? Mr Garton: Yes, I imagine that if I am correct in making the statement that money changes hands between DED and ACU Events, that money is basically covering the expenses of ACU Events for their people being on the Island, effectively covering their wages for the period. I do not know that as a fact, but I can imagine that; but that is not handing an arrangement over to an external organisation particularly if it is an off-island organisation who are there only because they think that they are going to make money out of it. Q60. Mr Baker: Irrespective of the financial arrangements, ACU Events are seen as part of the custodianship of motorcycle racing, I take it? Mr Garton: Well, ACU Events are the organisational arm of the Auto Cycle Union who are the governing body for motorcycle sports within the UK and they set up all the rules and regulations under which all the events are run and under which all of us who are officials at events have to comply with those regulations. ACU Events, as I say, is the operational arm and they organise various motorcycle events in the various disciplines of motorcycling throughout the UK. Q61. The Chairman: Can I ask if any of the potential bidder, or the Sports Consultancy, came to speak to you about your feelings about this? Mr Garton: No. Mr McBride: No, and I think this is one of the key issues, really, that we have got a historic event which is now 94 years old, which is quite vulnerable and at the end of the day nobody has actually made any attempt to discuss the future. In fact, prior to the 2012 incidents, there was never a conversation around how can we improve or enhance the Manx Grand Prix to our mutual benefit it was basically a fait accompli. Q62. The Chairman: Not even the motorsport people within DED? They did not come to you? Mr McBride: No. Mr Garton: No. 675 Q63. The Chairman: Okay. Carry on. Mr Garton: Where was I? 16 EPRC-VN/16-17

17 Obviously what became very clear in the single meeting that we ultimately did have with Vision Nine when it looked like they were about to be appointed and this was immediately prior, I think, to it going to Tynwald as a recommendation. In that meeting it became very clear that Vision Nine had no knowledge whatsoever of the Manx Grand Prix, they just did not understand it. They did not have any knowledge of motorcycling and they went to great lengths to explain to us that their only real interest in terms of moving the whole thing forward was in putting on events that would add to the whole show. So they were not going to impact in any way on organising and the way the actual motorcycling was organised, but they were going to organise things alongside the event which I thought was all a bit strange really. If they are there to be the promoter of the event but do not know anything about motorcycling and are going to some lengths to explain to us that they are not going to impact on anything that we are doing, then how on earth was this actually going to work? If you put that on top of the claims of 85,000 people here, when everybody is saying, Well, heck, we have enough of a job getting the Is it 45,000 that we get at the moment for the TT? We have enough of a problem getting 45,000 people here by boats and planes, but how are we going to virtually double that figure? And ultimately if you get them here, where on earth are they going to stay? They are not all going to want to camp. A heck of a lot of those people will have spent a lot of money to get here, paying the peak fares. They are going to be people who are going to be wanting decent hotels, decent accommodation. I think the whole thing was just to quote Mr Bowers, it was a figure plucked out of the air that looked impressive. Q64. Mr Baker: You refer, Mr Garton, to events being organised alongside the motorcycling. Do you have a sense of what those were going to be? Mr Garton: I am making a leap in the dark here, but as most of their experience seemed to be based on music events in and around the London area, which is what they told us, then I presume that is the sort of thing and that perhaps they were looking to arrange various music events around the Island. But I do not really know, they did not go into any detail on that at all. Q65. The Clerk: Can I ask? It sounds to me like they were at pains to say, We won t interfere with what you are doing. (Mr Garton: Yes.) Was it your position that they should have interfered with what you were doing? Mr Garton: The way we see it in the Manx Motor Cycle Club, what we are looking for is a clear partnership with all the people who are involved. So at the moment that would be DED and ourselves, working together to say how can we make this event better? And, by better, I mean how can we make this event attract more people to the Island for a longer period of time than is currently the case. One of the knock-on effects of the move away from the Classic Manx Grand Prix to calling it a Classic TT and squeezing it into the Bank Holiday weekend is that yes, the numbers are going up, but they are here for a shorter period of time now. What I found interesting recently was the Government s own figures on tourism visitors, drawing up Those figures clearly show the number of people who arrived in 2016 was actually higher than 2015, but they are staying for a shorter period and therefore, by definition, spending less money. If you look at the Classic TT, if you want to come over on the Friday you spend all Saturday at the racing, you spend all Sunday up at the Jurby Day, and you spend all the Bank Holiday Monday at the racing, and then you go home. You are not going around the Island spending money in cafes, restaurants, pubs or whatever. That has been the tradition, particularly at the Manx Grand Prix. The tradition generally was a 17 EPRC-VN/16-17

18 fortnight s stay and I know, because that is where I started years and years ago. A fortnight s stay, and you went around the Island when you had your spare time and you spent money. And you went home on the last possible boat you could go home on. We have got to get back to that stage and I am sure we can get back to that stage but we really do need to work together, all of us, and work together with the people who can assist in bringing a greater knowledge of the event. The figures that we are getting here now for the Manx Grand Prix element I think we quote something like 11,000 there is absolutely no reason with this event, the mix of the two, the classic and the modern no reason whatsoever, in my view, why we could not be attracting similar numbers to the TT, none at all. But all that we have seen in recent years, since the Classic TT, we have rebranded the whole event the Festival of Motorcycling so you have effectively disappeared the Manx Grand Prix title and the Classic TT is the only thing that gets advertised at all. I had an experience two years ago when looking after the guests on one of the race days up in the Grandstand and I was sat alongside two guys who I had never seen before who were from Switzerland. We got talking and at one stage in the conversation a comment was made to me, What is this Manx Grand Prix? We came here for the Classic TT, we have never heard of this Manx Grand Prix. Now, that is an event that has gone on, as John said previously, for nearly a hundred years. In 2023 we will celebrate 100 years, God willing, and here is a guy who had come over for a Classic TT event, picked up in advertising, and yet had never, ever heard of the Manx Grand Prix. The Manx Grand Prix ultimately is a huge feeder to the TT about 60% of the entry in 2016 had their first rides on the Mountain Circuit in the Manx Grand Prix. They are intertwined and in my humble opinion they are two jewels in the crown of the Isle of Man. Q66. The Chairman: So you would like to see the Festival of Motorcycling, particularly the Manx Grand Prix, in advertising? It is including the Manx Grand Prix so whatever they sell it as they should also be selling it as, Including the Manx Grand Prix. Mr Garton: Yes, equal billing Mr McBride: In previous generations the Manx Grand Prix has been the precursor to the TT and it has always been in partnership with the TT. It has always been the breeding ground for future talent and it still is. That is where a lot of the recent stars have come from. But it would be better to get back to that and have a proper working relationship with the TT and the TT organisers. The two events go hand-in-hand, they complement each other. The Clerk: Just to follow up on your little story, Mr Garton: the Swiss gentleman who asked you what the MGP was, you presumably told him? Mr Garton: Oh, absolutely. 770 Q67. The Clerk: So he now knows. Was he attracted to the Isle of Man by the use of the word TT in the Classic TT branding? Mr Garton: I think that is it, yes Q68. The Clerk: So it works? Mr Garton: But what you do not really know is how many people you are missing by not using the Manx Grand Prix brand as well. You are absolutely right and there is no denying that the TT brand, mainly because of TV coverage in recent years, is enormously well known. I know through my regular motorcycling in Europe when we are on our travels and somebody spots us pull up and they see the three legs, 18 EPRC-VN/16-17