Press Release - Winding-up the New Millennium Experience
Company Limited
17 April 2002
Winding-up the affairs of The New Millennium Experience Company
Limited (NMEC) was handled in a professional way, Sir John Bourn,
head of the National Audit Office, told Parliament today. Getting
NMEC into the position where it was able to go in a solvent state
into voluntary liquidation on 18 December 2001 was a major
task.
Before disposing of the Dome’s contents, NMEC had to compile a
comprehensive asset database because the company’s systems for
maintaining detailed records of assets had been overwhelmed by the
amount of material and equipment delivered in the final months
before the Dome opened. NMEC received £4.5 million from its sales
of assets.
Over 1,350 contracts had to be reviewed with the aim of ensuring
that they were all logged and closed in a beneficial way for NMEC,
and of reducing contractual liabilities to a minimum prior to a
solvent liquidation. But the task was complicated by the absence of
adequate records and took over 12 months to complete.
NMEC, with the assistance of a team from PricewaterhouseCoopers,
conducted a review in the light of fraud allegations. Most of these
allegations and cases have since been closed, but Police inquiries
continue. There were also instances of poor or ineffective
compliance with internal controls, especially on work awarded
without competition. This means it was doubtful that some purchases
were good value for money.
In addition, the unusual step of placing a public sector body
into liquidation, and ensuring this was done with NMEC in a solvent
state, raised complex accountability issues which the Department
for Culture, Media and Sport, the Millennium Commission and NMEC
worked together to resolve.
On entering voluntary liquidation, NMEC was in better shape than
when the National Audit Office last reported. It was solvent and
forecasting that £25 million of the £628 million lottery grant
would not be required, although this cannot be guaranteed.
The biggest difference in NMEC’s overall financial situation has
been the increase in its income which was forecast in December 2001
to be £189 million (down from the £359 million budgeted in May 1997
but up from the £168 million forecast when the National Audit
Office last reported). This is mainly due to increased visitor
numbers towards the end of 2000, together with the proceeds from
the sale of the Dome’s contents.
NMEC’s expenditure was forecast in December 2001 to be £789
million (up from the £758 million budgeted in May 1997 but down
from the £793 million forecast when the National Audit Office last
reported). During 2001, running NMEC and the Dome cost £16
million.
Sir John Bourn said today:
"The process of winding-up the affairs of The New
Millennium Experience Company was extremely challenging,
particularly given the complexity and scale of the operation. But I
am pleased to say that the preparations required before the
appointment of the liquidators were accomplished successfully and,
on entering voluntary liquidation, NMEC was in better financial
shape than when I last reported."
Notes for Editors
- The Millennium Dome was built, fitted out and run by The New
Millennium Experience Company Limited and funded from the National
Lottery by The Millennium Commission, and through visitor income
and commercial sponsorship. The New Millennium Experience Company
Limited is both a limited company governed by the Companies Act,
and a non-departmental public body subject to public sector control
and accountability requirements. The company is wholly owned by the
Government, and the Shareholder is a Minister of the Crown. The
liquidation process used for NMEC, a ‘Member’s Voluntary
Liquidation’, is based on an assessment by the directors of a
company that there are sufficient assets to pay all the company’s
debts. If at any time during the liquidation the liquidators form
the opinion that there might not be sufficient assets for
distribution to the Company’s creditors, the liquidators must
convert the process into a ‘Creditors’ Voluntary Liquidation’,
essentially a procedure used in the case of insolvency. This report
does not cover the sale of the Dome, which has not yet been
completed. Sir John previously reported on the Millennium Dome in
November 2000 (HC 936 1999-2000) focusing on the financial problems
experienced on the project. Today’s report examines how the company
subsequently went about winding-up its affairs following closure of
the Dome.
- Press notices and reports are available from the date of
publication on the NAO website at http://www.nao.org.uk/ Hard copies can
be obtained from The Stationery Office on 0845 702 3474.
- The Comptroller and Auditor General, Sir John Bourn, is the
head of the National Audit Office employing some 750 staff. He and
the NAO are totally independent of Government. He certifies the
accounts of all Government departments and a wide range of other
public sector bodies; and he has statutory authority to report to
Parliament on the economy, efficiency and effectiveness with which
departments and other bodies have used their resources.
Press Notice 33/02
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