London Olympics

Andrew Smith Excerpts

Tuesday 21st February 2012 Westminster Hall

[Barry Gardiner]

The Minister will make the response that he wishes to make.

[Mr Andrew Smith (Oxford East) (Lab)]

I congratulate my hon. Friend on securing this important debate. His concerns are shared more widely in the House. Will he also take it that those of us who do not intervene agree with the facts that he is presenting?

[Barry Gardiner]

Yes indeed. I am grateful to my right hon. Friend for his intervention.

First, I will raise my concerns about the chronology, openness and transparency of the Olympic wrap procurement process. I understand that just three months after Dow was confirmed as an official partner of the International Olympic Committee, LOCOG chose the Olympic stadium wrap as one of the areas of the Olympic budget that would be cut. I accept that that was a perfectly proper response to the spending review, but reports from LOCOG at the time estimated savings from the wrap at £7 million. It was also reported at the time, by the tenacious Sunday Express journalist Ted Jeory, that the Secretary of State for Culture, Media and Sport had been informed that finding a private sector partner for the wrap was highly likely—that was in an e-mail from the Department on 16 December. We now know from Architen Landrell, a UK company based in Chepstow, that it was appointed under a tier 3 contract by Sir Robert McAlpine, the main contractor for the stadium’s construction. Architen Landrell was asked to produce eight test panels and give a final costing for the stadium wrap, which it did, at a price of approximately £1.5 million.

Two questions arise from that. Why did the Secretary of State believe it was highly likely that a private sponsor would be found for the stadium wrap? Why were the media given the figure of £7 million as the projected saving, when the actual saving was known to be only £1.5 million?

On 8 February 2011, it was reported that the tendering process for a company to sponsor the wrap would go ahead, with expressions of interest due by 18 February. That was an extraordinarily short time in which to source a major supplier. The public might consider it inconceivable that only 10 days were allowed for such a major tender, unless there had been clear and ongoing discussions with potential partners before the announcement. In a recent response to a written question to the Department, I was told that the shortest period that the Department had allowed in the previous 12 months for any tender where the contractor would be paid more than £1 million was 28 days, yet LOCOG allowed only 10 days for someone to bid to pay a sum, publicly estimated to be £7 million, to sponsor the wrap. Does the Minister think that LOCOG would have set the tender window at a mere 10 days if Dow Chemicals had not already been lined up as a sponsor?

In his letter to London assembly member Darren Johnson, Lord Coe said that the Government took the decision to ditch the wrap in order to achieve the announced saving. That prompts several further questions. What discussions did the Department, the ODA and LOCOG have about the decision to put the wrap up for sponsorship? Did the International Olympic Committee put any pressure on LOCOG to provide a niche for Dow as a sponsor of the London games? If the Government simply wanted to achieve savings in the original budget, why did they not press on with the Architen Landrell wrap, which would have shown a saving of £5.5 million against the original budget and given the project to a British company?

The ODA procurement policy on the Olympics states:

“As a public body the ODA is required to operate in the procurement framework set out by European Union Procurement Legislation and UK Regulations.”

Was that the reason why the procurement of the wrap was passed from the ODA to LOCOG—LOCOG is not a public but a private body and was therefore not obliged to follow the standard EU and UK procurement rules?

Another company, the Nottingham Textile Company, is adamant that it submitted an expression of interest before the deadline of 18 February. It heard nothing for a long time and eventually inquired why it had received no response. The company was told by LOCOG that its submission had been too late. Will the Minister undertake to check the date on which Nottingham Textile Company’s submission was received by LOCOG and whether, in fact, it was in time?

Let me be clear: I believe that the Government quite properly wish to achieve savings in the cost of the Olympic games. I also believe that Dow Chemicals was putting pressure on the IOC to find a way for it to become a key sponsor with sector-exclusive marketing rights for the London games. I believe that LOCOG wished to assist the IOC in that endeavour and therefore suggested that £7 million could be saved by taking the wrap away from Architen Landrell and procuring it under a sponsorship deal with Dow. I believe that the Government knew that a sponsorship deal was being negotiated and were content to collude with the IOC and LOCOG to facilitate a major IOC sponsor and to pretend to the public that in doing so, they were saving £7 million. In short, the procurement process was rigged in favour of Dow Chemicals. It was a sham.