Economic Policy Review Committee

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Economic Policy Review Committee 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 DEPARTMENT OF ECONOMIC DEVELOPMENT HANSARD Douglas, Thursday, 3rd December 2015 PP2015/0168 EPRC-ED, No. 1/15-16 All published Official Reports can be found on the Tynwald website: www.tynwald.org.im/business/hansard Published by the Office of the Clerk of Tynwald, Legislative Buildings, Finch Road, Douglas, Isle of Man, IM1 3PW. © High Court of Tynwald, 2015 STANDING COMMITTEE, THURSDAY, 3rd DECEMBER 2015 Members Present: Chairman: Mr M R Coleman MLC Mr G R Peake MHK Mr J R Turner MLC Clerk: Mr R I S Phillips Contents Procedural ........................................................................................................................................ 3 EVIDENCE OF Hon. L Skelly MHK, Minister, and Mr C Corlett, Chief Executive Officer, Department of Economic Development .......................................................................................... 3 The Committee sat in private at 3.37 p.m. .................................................................................... 19 __________________________________________________________________ 2 EPRC-ED/15-16 STANDING COMMITTEE, THURSDAY, 3rd DECEMBER 2015 Standing Committee of Tynwald on Economic Policy Review Department of Economic Development The Committee sat in public at 2.30 p.m. in the Legislative Council Chamber, Legislative Buildings, Douglas [MR COLEMAN in the Chair] Procedural The Chairman (Mr Coleman): Good afternoon. Welcome to this public meeting of the Economic Policy Review Committee, a Standing Committee of Tynwald. I am Mike Coleman MLC and I am the Chairman of this Committee. The other Committee members are Juan Turner MLC and Mr Ralph Peake MHK. Also with us is our Committee Clerk, 5 Mr Roger Phillips. If we could, first of all, ensure that mobile phones are switched off, as they interfere with the recording equipment. Also, for the purposes of Hansard and the Tynwald Listen Live facility, I would kindly ask that we do not have two people speaking at the same time. The Standing Committee is taking evidence today on matters relating to the Department of 10 Economic Development. We have with us from DED the Minister, the Hon. Laurence Skelly MHK, and Chief Executive, Mr Corlett. This is a special session, as we will be covering two topics. The first topic is the shelved TT World Series initiative, and this will take place in public. The second topic is banking facilities available to commerce in the Isle of Man, and this will be held in private. The last time the Department of Economic Development gave evidence to this 15 Committee was on 16th September 2015, which was the scheduled annual catch-up session. So again, welcome, Minister and Mr Corlett. The Minister: Thank you. EVIDENCE OF Hon. L Skelly MHK, Minister, and Mr C Corlett, Chief Executive Officer, Department of Economic Development Q1. The Chairman: Before we begin, I would like to express my concern that the information 20 requested by this Committee on 19th November was only made available to the Committee late yesterday afternoon. We now have the minutes of the 29th, but the minutes of 29th September were not included originally, even though it was so vital. That was the date of the meeting which decided to shelve the project. We now have it and are happy. Late delivery of papers without leaving the Committee Members sufficient time to read them 25 and omission of an important minute at that time could be regarded as discourteous to this __________________________________________________________________ 3 EPRC-ED/15-16 STANDING COMMITTEE, THURSDAY, 3rd DECEMBER 2015 Committee and thereby Tynwald. I was advised to change the original word that is now ‘discourteous’. I actually had put down ‘contemptuous’. The minute of 29th September ... As I have said previously, we are prepared to guarantee that this minute will not be published, bearing in mind that this Committee has also dealt with 30 the Sefton and matters like that where private information was given to us and it was not declared to anybody. At our annual session on 16th September your comments regarding the TT World Series were, to say the least, bullish, and left us with an impression that the initiative would come to pass. Thirteen days later, on 29th September, the TT Series was discussed at a Department 35 meeting and the project was shelved after incurring a cost of £332,049.22. It behoves this Committee to determine, amongst other things, if an earlier go/no-go decision would have been possible, which could have reduced the project cost. Minister, what happened between 16th September 2015 and 29th September 2015? 40 The Minister for Economic Development (Mr Skelly): First of all, may I apologise on behalf of the Department for the late submission of the information that you requested. That, very simply, was our failing; however, we did have some critical absences in our Department, most notably one of our colleagues having a bereavement in the family and one of our senior management in hospital. So I do apologise for that. I would have wanted it much earlier for you 45 to digest and I want to make that unreserved apology. What has happened in those two weeks is a very valid question, but I think what we must do is put things in context first and foremost. We are talking about a project here that had its start back in 2010 – two Ministers ago, and a previous Chief Executive who is not here now as well. There were a number of commitments, particularly financial commitments, and different phases 50 of the project that were ongoing, and at all the particular times in the Department, whether that be the existing Department or the Department as back in 2010, both politically and executively, the information that was drawn from the evidence, from the feasibility study all the way through to the tendering process, said we must test the market. What we did do, finally, on 29th September, is we made a political decision that was, as 55 stated publicly, to shelve the TT Series. That journey, which clearly was a long journey and clearly gained an awful lot of evidence, gave us, really, the knowledge, and we believe – and I say ‘we’ believe as a Department, both me and the Members – that we made the right decision at that particular time. The principal reason for that was that we felt that the TT Series still had merit; however, what we wanted to do was to focus solely on the local events. 60 Through the various pieces of evidence that were amassed over that period of time we believe there is still significant growth to be obtained in both the TT event, the classic event, and obviously going into the Festival of Motorcycling. At that particular stage we started out looking for a TT Series that would be global. At the end, we decided that we wanted to still subcontract that out: put it into a private promoter’s hands to take it to the next stage of growing the event, 65 we believed, substantially and significantly. That is why we had to make the decision to no-go with the TT Series and start a new procurement process, which we have just begun. That is principally the decision that was made on 29th September by the Department. Q2. The Chairman: At that time you received, what, two major bids for the thing? 70 The Minister: When we shortlisted, we had three shortlisted companies that were coming forward. One fell by the wayside for a number of different reasons, and we were left with two principal tenders to review, which we did review extensively. It was done most clearly from an executive level and also the consultant level, which we did at two different stages, and then of 75 course there was the presentation to the Department, i.e. the political Members, on 29th September. __________________________________________________________________ 4 EPRC-ED/15-16 STANDING COMMITTEE, THURSDAY, 3rd DECEMBER 2015 We had, I would suggest, a very robust debate within the Department to review exactly what the options were in front of us, and, as I stated, we made that decision not to proceed with either of those particular tenders but to actually go back to market for a private promoter to 80 grow the local event and focus on the local event. Q3. The Chairman: This is rather sensitive: I am led to believe that the two bids included names of your own staff. 85 The Minister: That would be speculation. I think it was recognised ... What I could say is that not just those two bids but probably several other bids would recognise that we had expertise within the Department that would be valuable should one of the tenders be successful. Of course, that would only be speculation and any agreement I have absolutely no knowledge of whatsoever, but it was identified that we had expertise within our Department that would be 90 probably critical for anyone if they were successful. The Chief Executive Officer (Mr Corlett): If I might add – if I may – part of the intent of this was always to transfer part of the activities for running the TT to a private party. That was always part of the intent, and so this would provide continued employment for a number of the 95 staff by transferring to that private organisation, because they have amassed, as the Minister says, a great deal of knowledge about the detailed operation of the TT.
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