A cash-guzzling life of controversy

ON 15 DECEMBER 1999, Prime Minister Tony Blair visited Greenwich and declared: 'I defy anyone who sets foot in the Dome not to be awed by its sheer scale, variety or range of attractions. Like anything new in Britain, the Dome has had to see off the cynics; those who lack confidence in the British people, who despise anything modern, who are made uneasy by success.'

How hollow the words sound now, as the country watches the last death-throes of a project which has eclipsed all other recent political schemes in terms of its ambitions, its hype and its sheer expense.

The beginning

NINE commissioners were appointed by Michael Heseltine, then Deputy Prime Minister, in 1994 to look at a 'fitting way to mark the millennium with lottery funds'. They wanted bidders to come up with something 'fun, forward-looking and creative'.

As early as May 1995, there was a warning. A study concluded that 'a project of such global significance cannot be brought forward on the basis of an incoherent collection of glamorous concepts'. But the committees pushed on, and it was decided half of its funds would come from the Millennium Commission, the rest from the commercial sector. Out of a shortlist of four sites, Greenwich won the deal.

When Tony Blair came to power in May 1997, one of the first decisions he had to take was whether to go ahead. Gordon Brown, Alistair Darling, David Blunkett and Frank Dobson were all against. John Prescott felt it should go ahead, as did Peter Mandelson. Blair came down in favour, in spite of his concerns about the financial controls. He also expressed concern that no-one seemed to have a clear idea of what they wanted to put in the building.

Various people, including Michael Grade, were drafted in to give their advice, and Bob Ayling, then head of BA, was made the chairman of the New Millennium Experience Company, set up to run it.

Mandelson was put in charge of the project. When he resigned from the Cabinet in January 1999, Lord Falconer, a friend of Blair's, took on the poisoned chalice. He took much of the blame for escalating costs but he inherited an army of advisers and bureaucrats with no clear management structure, a lack of oversight and poor accountability.

The opening

ON New Year's Eve 1999, the great Dome was unveiled, amid a PR fiasco as VIPs were left shivering in the cold at Stratford Tube station as they queued to collect their passes. The Dome was already virtually bankrupt. Almost all of its contingency fund, some £90m, had been spent on its attractions in a last attempt to 'jazz it up'. One of the greatest errors lay in the target figures. NMEC had forecast 12 million visitors for that year - in fact, the Dome attracted fewer than four and a half million visitors.

The subsidies kept pouring in. In 2000, the Dome cost £179m in extra funds, provoking a succession of rows in the Commons. In August 2000, NMEC was advised it was insolvent and, in the view of David James, an expert in company rescue, had been since February. Grants of nearly £100m had to be made in order to keep the attraction open for the next three months.

The closure

ONCE the doors were shut forever, the problems over the sale of the Dome became clear. The site, with its 150 acres of adjacent land, was prime territory for housing or retail development. But Labour wanted the Dome itself to be kept intact.

The efforts to sell the Dome to the private sector for around £125m collapsed twice - the first time when the Japanese bank Nomura, pulled out after it discovered the accounts were in chaos. Robert Bourne, a Labour party donor and property developer, put forward plans to turn it into a business park but ministers effectively scrapped that deal in February this year. There was a further setback this October when two key players in the Meridian Delta consortium pulled out blaming the economic downturn. Quintain Estates and Lend Lease pressed ahead.

Meanwhile, the National Audit Office will hold another inquiry into the attraction after NMEC goes into voluntary liquidation. The Conservatives also want to look at how much money the Government will have lost on the scheme over its lifetime. In this current year, since it has closed, it has cost at least £21.5m of taxpayer's money but overall will have taken £628m of public money. Some put the price as high as £1bn - not including the embarrassment factor for the New Labour project.