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Jonathan Stephens has got form

Jonathan Stephens, the permanent secretary at the Department for Culture, Media and Sport (DCMS), told a select committee that he would neither confirm nor deny his alleged role in allowing Adam Smith, Hunt's special adviser, to speak to James Murdoch's office. Later, the DCMS issued a statement saying Stephens was "content" with Smith's role.

Appearing before the public accounts committee (PAC), Stephens was asked by the committee's chair, Margaret Hodge, whether he knew that Smith was acting as a channel of communication between the department and Murdoch's office.

"He [Hunt] has made it clear that he's providing full written evidence and is looking forward to providing oral evidence to the Leveson inquiry. There was a statement by the special adviser yesterday that made it clear that he accepted that the nature and content of those contacts was not authorised by the secretary of state or by me and I think that that is the right forum for those matters," said Stephens.

He was then asked another nine times to clarify his role in approving Smith's position as a go-between, but declined to do so. At one point, Labour member Nick Smith accused him of "stonewalling" on these issues..

Jeremy Hunt's top civil servant refuses to back him over BSkyB, Rajeev Syal, Guardian

In the discreet hinterland of informal discussions between Ministers and corporations, particularly in the rapidly developing industries of media and sport, Jonathan Stephens has shown before an exceptional ability to be economical with the truth when under scrutiny from select committees. He was amongst those whose role was scrutinised over how nobody wanted to take responsibility for not knowing beforehand that the Olympic bid price of £2.4bn was a gross understatement of the 'final' cost of the Olympics at £9.3bn.

Some more fascinating evidence about how the original bid costings were £5bn too low emerged from the House of Commons Public Accounts Select Committee deliberations on 14 Nov 2007.

Mr Marius Gallaher, the Alternate Treasury Officer of Accounts, HM Treasury, gave evidence.

Mr Alan Williams is the Labour MP for Swansea West

Jonathan Stephens is Permanent Secretary, Department for Culture, Media and Sport.

[Extract from uncorrected transcript begins]

Mr Gallaher: The bid was estimated at the time based on the facts available to those who were constructing the estimate and the bid at the time. In the light of London winning the Olympics there was going to be a clear re-evaluation of those estimates to take account of contingencies.

Q170 Mr Williams: That may be so, but why not do it at the beginning so we had a clearer idea what they needed? That is what the Treasury guidance is about.

Mr Stephens: What I can say is that in all the considerations and expert analysis, as far as I am aware no suggestion was made that a specific amount for programme contingency should be provided over and above the contingency that was already included project-by-project within the bid estimate.

Q171 Mr Williams: What contingency was already in?

Mr Stephens: There was an existing contingency built into the various projects at varying levels up to 20%.

Q172 Mr Williams: In paragraph 62 we are told at the time of the bid that no provision was made for contingency on the Olympic bid as a whole. You have agreed to that, you have signed up to that.

Mr Stephens: Yes.

Q173 Mr Williams: That contradicts what you have just told me.

Mr Stephens: That is for the Olympic programme as a whole. That is the programme contingency. Elsewhere, at paragraph 61 the report makes clear that it did include contingency provision at the level of individual projects.

Q174 Mr Williams: It goes on to say: "During the course of the budget review process, however, the Department and the Olympic Delivery Authority concluded that it would be appropriate to increase the budget to include programme contingency..."

It needed this because - these were great surprises that you discovered - "because of the general risk of 'optimism bias'", in other words an underestimate of what happened on building costs.

You were unaware of that risk before, obviously. "...and more specifically because of the complexity...", perhaps no-one had drawn your attention to the complexity of the project, "..and scale of the Olympic programme", you must have noticed the scale of the Olympics.

It gets worse: "...the interdependencies of different elements of the programme, and the immovable deadline for delivering the Games. These factors bring significant risks of cost pressures...", which my colleague, Mr Mitchell, referred to.

Are you saying that you were not aware of all of these dangers at the beginning, they came as a surprise to you, a revelation, partway along the route that suddenly you needed to do something that the Treasury had been saying you should have done at the outset anyway?

Mr Stephens: I return to the point that the estimates at the time of the bid were compiled on the basis of the knowledge and advice on developments available at the time of the bid. The expert advice that has been published is fully available and reflects the risk factors.

Q175 Mr Williams: Sorry, let us come back to that. The advice at the time was unaware of complexity, unaware of scale, unaware of the interdependencies, unaware of the danger of cost escalation in the building industry. On all of these things you were naïve and innocents in the economic world and you did not realise these things went on, but suddenly it dawned on you and you made provision which the Treasury should have been insisting on you making from the outset.

From: Collusion or cock-up

See more at: Rising Olympic costs slammed as catastrophic, Paul Kelso


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