T in the Park

Good morning and welcome to the 22nd meeting in 2015 of the Education and Culture Committee. I remind everyone present to keep their electronic devices switched off at all times, because they interfere with the sound system.

Agenda item 1 is an evidence-taking session with the Scottish Government on the funding of this year’s T in the Park festival. I welcome to the meeting Fiona Hyslop, the Cabinet Secretary for Culture, Europe and External Affairs, and her accompanying officials. Good morning to you all.

I invite the cabinet secretary to make some opening remarks.

Thank you very much, convener—

Hold on a second, cabinet secretary.

That discussion took place in private. As has been said before, John, discussing in the public domain matters that the committee has discussed in private is not an acceptable way to behave. You should know that by now.

I ask the cabinet secretary to continue.

Thank you, committee members and convener.

I am pleased to have the opportunity this morning to speak to the committee about the Scottish Government’s support for the T in the Park festival. On 14 August, I provided a detailed account to Parliament, in response to a parliamentary question lodged by Liz Smith, on my decision to provide funding support for the festival. Members of the committee should have the text of that answer along with a detailed timeline of the decision-making process, indicating that we published information on the grant on 28 July, almost immediately after the grant’s payment.

In my opening remarks, I want to highlight the motion that was agreed to by the Parliament in April, which recognised the

“key role that”

our

“festivals”

and

“cultural events ... play in making”

Scotland

“a great place to live, work, study and visit and in enhancing”

our

“international reputation.”

Indeed, members from across the parties spoke of the economic benefit of T in the Park in particular.

The T in the Park festival plays just such a key role. It is one of the most popular and successful cultural events in Scotland’s annual events programme. Since it was first staged in 1994, T in the Park has become a rite of passage for many of our young people, and each year it delivers significant economic impact, drives additional tourism and supports jobs. Last year, it generated £15.4 million for the Scottish economy.

I first became aware that T in the Park’s organisers were expressing concerns over the event’s longer-term viability in May and, as cabinet secretary with lead responsibility for major events, I met the chief executive officer of DF Concerts and Events to discuss that serious situation. It was clear to me that the organisers faced a number of unanticipated additional costs in staging the event as a result of the requirement to move from the previous site at Balado and the three-year-only time-limited condition attached to the planning consent for use of the new site at Strathallan.

Following a detailed consideration of options, I approved funding of £150,000 from my major events budget for operational costs associated with the transition to the new site, subject to a number of conditions, including the successful delivery of this year’s event, with a clawback clause should the event not be delivered in 2016 or 2017. That was done in order to seek to protect the future of an important and iconic event and its economic, cultural and reputational benefits for Scotland.

I am happy to answer any questions that committee members may have.

Thank you, cabinet secretary. Mary Scanlon has a question.

The committee asked for information, and the information was supplied to the committee. The information that was issued last night was released as a result of the number of freedom of information requests. As the member knows, information that is commercially confidential would be redacted, as information that concerns security would be.

The vast majority of the information that was released following freedom of information requests concerned transport issues, which, as far as I am aware, this committee is not looking at. The committee wants to know what was paid out and why and, indeed, when the information was provided.

In relation to the parliamentary question that I answered on 14 August, I point out that Liz Smith asked specifically about how much money was involved and about dates. I took an early opportunity to ensure that the answer that I gave was much fuller than that, because I wanted to provide that information. That answer was published earlier than the final date by which it was required.

On the decision-making dates, you have the information in the papers before you. The budget information that was supplied to us in relation to the additional and extra costs that were being met by T in the Park with regard to the transition is commercially sensitive information and has not been supplied to the committee or in response to the freedom of information requests.

I thought that it was courteous to ensure that information that has been provided to people who had submitted freedom of information requests was also provided to the committee. As I said, the vast majority of the information concerns transport issues, which is separate from the matter that the committee is concerned with in its inquiry.

The timeline takes you through what decisions were made—

It gives you the information about what was requested and when. It gives you—

Mary, if you let the cabinet secretary answer, I will let you come back in.

It provides you with a systematic distillation of what happened and when, and what decisions were taken and when. To me, that gives you clarity about what happened and when it happened. I wanted to ensure that the committee had that clarity. We could have given you a range of transport information that you or your clerks would have had to work through, but I thought that it was much more beneficial to the committee to have everything laid out in a systematic way, driven by dates. That is the trail of the dates and the decisions that were taken. In addition to the written answer that I provided on 14 August, it gives a comprehensive description of what happened and when.

There are two issues. The committee will be aware that the Scottish Government provides funding for profitable companies to safeguard jobs and support the economy in all the sectors that are key to the Government’s economic strategy. There are seven sectors, two of which are the creative industries and tourism sectors. The situation is therefore not unusual.

In relation to T in the Park, DF Concerts has given information that a seven-figure amount was required to provide for the costs—and, in particular, the unanticipated costs—of the transition from Balado to Strathallan. The seven-figure costs and the severely reduced revenues that the company anticipated—information as provided to us in its budgeting in relation to the event—meant that the event this year certainly, and possibly in future years, would not be in a position that it would want to continue. The shareholders of the companies that Mary Scanlon cites indicated to them that, if there was no profitability for the event, it would be preferable to move from a multiday, multistage festival that brings economic benefits to rural Perthshire to single-day, single-stage events, possibly in a city such as Glasgow, as has been done recently, or, indeed, to move the festival away from Scotland. That would mean that the £15.4 million-worth of economic benefit that comes to Scotland would no longer be in Scotland. With the difference between profitability and the interests of DF Concerts with regard to the event, it could make the decision not to continue the event at Strathallan.

As members might appreciate, that is why the clawback clauses exist, particularly if the event should not go ahead in 2016 or 2017. Indeed, the grant was given only after the delivery of the event in 2015.

Mary Scanlon is right to cite the company’s profits. That also means that it will make decisions about what events it will support or not support or continue with.

I urge caution about the use of that language and ask that you be careful.

Convener, I am sure that you will guide the committee very carefully in terms of the language that is used and the allegations that are being made.

The terms of the grant were published on 28 July, and the grant application itself was also published. The committee will be able to identify that information.

The applicant, Geoff Ellis, has, as far as I am aware, no associations with the SNP. It was Geoff Ellis I met with and Geoff Ellis I had the discussion with. Geoff Ellis is the chief executive of DF Concerts.

In relation to the application itself and the terms and conditions, I was quite clear at my meeting with DF Concerts in May that I thought that it would be a challenge to identify what could be done in terms of support because of other funding that DF Concerts had already received.

For example, Glasgow City Council had provided £200,000 over 2013-14, which is more—

It does, convener. If I can continue with my point, in terms of the different types of state aid, de minimis state aid was not applicable in this case because of the other public money that had gone into that company. De minimis would have been under £200,000, which was applicable to DF Concerts because of the money that it had received from Glasgow City Council. Investment in infrastructure was also not available under the state-aid rules.

Operational state aid could be provided for the transition—specifically for venue hire and costs that were particular to the transition in the form of planning consultants’ costs. That was how the grant that was provided operated; it was also what was applied for.

In order for the Scottish Government to provide a grant, particularly where the situation relates to state aid and where exemptions have to be identified to allow such a grant to be paid, and for the grant to achieve accountable officer approval—which it did, at senior civil servant level—we had to be assured of certain information. The information included company reports and accounts, which were provided to us, but also commercially confidential information, which is why that information has been redacted in the response to freedom of information requests, and the budget for the event itself, which is again commercially confidential information.

This year’s T in the Park got planning approval barely eight weeks before the event was to take place. That had an implication for ticket sales and thus for the revenue that could be achieved for the event, which was problematic.

The information that was required was provided to us, and the rationale was provided. The report containing the statistical information on impact and expenditure will be provided to the Scottish Government—it is required to be provided, and it will be provided, under the conditions of the grant.

I respect the independence of Perth and Kinross Council. The council takes its planning decisions independently; and it took that planning decision. That was the council’s responsibility. It would not have been correct for the Scottish Government to interfere with the council’s planning decisions.

The decision that the council took to limit the planning conditions to three years, rather than five years, clearly had implications for the transitional costs. Those could not be spread over a longer period of time but had to be concentrated in a three-year period. Part of that decision-making process, which I did not interfere with, and neither should I have—

Liz—

Yes.

DF Concerts can speak for itself about its discussions with Perth and Kinross Council. I personally did not have a discussion with Perth and Kinross Council. I do not have discussions with other local authorities where we fund festivals. Indeed, we provide funding for festivals right across Scotland—not least in the city of Edinburgh but also in other parts of the country. We make decisions as the Scottish Government.

I want to clear something up before I go on to my questions. Mary Scanlon raised a number of points relating to Jennifer Dempsie. I do not want to involve any individual, but I want to make the picture clear. Did you know that the request for an initial meeting came from Jennifer Dempsie?

I did not know that the request for the meeting in May came from Jennifer Dempsie. She did not attend the meeting that we had with DF Concerts and I had no discussions about funding with her.

That is fine. That clears up the point that I wanted to address.

The Scottish Government has a state-aid unit. What was its role in the provision of grant funding to DF Concerts?

Clearly, it was essential that I took advice from the state-aid unit. A colleague from the unit—Alan Coleman—is with us today. In the steps that we took in connection with the decision making, we would have checked what was and was not applicable, to make sure that our state-aid functions were properly carried out. That included notifying the European Commission about the application for and the allocation of the grant; that was reported to the Commission at the appropriate time and was done fully and transparently.

Information was also published on the Scottish Government website at the time. We are very conscious of what can and cannot be done in relation to providing state aid. That is why, for example, we could not provide de minimis state aid, because Glasgow City Council had already provided funding to the company, and other investment was not applicable. However, there were additional costs of the transition in relation to venue hire and planning consultants, not least because of the environmental aspect.

The information that is provided by the clerk’s timeline is that on 18 June there was

“further advice from Major Events officials to the Cabinet Secretary on options for supporting the T in the Park event.”

On 26 June,

“Major Events officials obtain Accountable Officer approval of intended approach to providing funding”

and there was

“Further funding advice provided to the Cabinet Secretary by Major Events officials.”

Can you share any of that advice? What was the accountable officer’s role?

The timeline was provided by us to the clerks for them to provide to the committee; it is information that we provided. Some of the information and advice that officials gave me is confidential, because it includes information that we received from the company in relation to reports, accounts and budgets for the event.

The decision was not made in isolation by me, as is being alleged by other committee members. It was made together and collectively with the advice of Government officials. In relation to the signing off of the final grant, the role that the accountable officer at senior civil service level took was appropriate, because that is what we do in such situations.

I point out that it is not unusual for the Government to support a company to safeguard jobs and sustain the economic interests of the country. In doing so, we have to reflect on the event’s importance. Creative industries, tourism and festivals are not of second-class importance in their impact on the economy, but the view that they are second class might be held by those who do not support the festival and who have spoken out against having it at Strathallan. Lots of interests are at play. My interests are the economic interests of the country, the cultural offering that we make to generations of young people and the development of the contemporary music scene in Scotland.

Mr MacDonald can have a quick supplementary question.

You mentioned the European Commission, cabinet secretary. What was the significance of the Commission issuing an official scheme number?

That was a validation of the notification that was appropriate, given that not only was the grant state aid but we indicated where we thought the general exemption lay. That means that the decision is public and that we make sure that people know about it. It also allows the Commission to question the position at any time. That is part of the process of being open and transparent about what we are doing.

Yes. I refer you to the written answer that I gave on 14 August. In paragraph 8 of that answer, I said that, several months ago,

“DF Concerts and Events confirmed that the 2015 event could be delivered under pressure but that the additional costs faced in relation to it were a threat to its longer term viability on that site.”

In paragraph 11 of that answer, I made it quite clear that the grant was given in

“order to protect the future staging of the event in Scotland.”—Written Answers, 14 August 2015; S4W-26910.

I have been clear about that right from 14 August, although that has not been reported as widely as it might have been.

That is why the grant was given after the event. It was only ever going to be given if the event took place. The event took place but, in terms of its longer-term viability, it was essential that the clawback clauses were in place for 2016 and 2017.

When I met DF Concerts in May, it was only 16 days or so after the planning decision was made to limit the festival to three years at the current site. That put additional pressure on the spread of the seven-figure costs that DF Concerts was citing. Even at that time, it was unclear whether the festival could go ahead but, as discussions developed, it was clear that it could go ahead, under pressure.

However, the point was about the profitability of the event going forward. If the DF Concerts shareholders think that the festival does not provide them with what they need, they will move it. That is not in the interests of Scotland.

I am standing up for T in the Park, for the tens of thousands who go every year and for the generations of people who have attended in the past. It has been an important part of developing the music scene and the contemporary music acts that have gone on to greater and wider success. That is in the interests of our country.

Gordon MacDonald asked about Jennifer Dempsie and many allegations have been made about her and her role in all this. Can you categorically tell us what her role was in the whole scenario and whether she was paid any consultancy fees from the grant?

The relationship was between Jennifer Dempsie and DF Concerts—she was a staff member of DF Concerts. In terms of her connections, if her work involved arranging diaries for Geoff Ellis, that is a matter for DF Concerts. As for her connection with me, I know of her because she worked as a special adviser—I think that her contract finished in 2009. I have not had a relationship with her in the past six years as a friend or anything like that. My relationship was with Geoff Ellis. Jennifer Dempsie was not at the meeting and did not discuss any funding with me. She was a paid employee of DF Concerts—she was not a consultant.

On the payment issues, the grant for venue hire and planning consultants would not have gone to Jen Dempsie, as she was an employee of DF Concerts, and planning consultants are clearly defined by their role in relation to planning. I hope that that helps to clear up some of the allegations that are being made.

10:30

At the time, were you aware that Jennifer Dempsie was trying to make the appointments for meetings, or were you not involved at that stage?

I was not involved. I do not see every piece of correspondence that comes in. Because Jen Dempsie stopped being a special adviser probably about six or seven years ago, there is no reason why anybody in my office would know who she was. She was not part of the meeting. She did not discuss funding with me. My meeting was with Geoff Ellis. If Geoff Ellis, who is the chief executive of the biggest festival in Scotland, wants to meet you because he has concerns about that event’s viability, I think that you meet him.

Excuse me—would you mind moving your mike closer to you? I am having difficulty picking up what you are saying. Thank you.

I am sorry—I did not catch the beginning of your question.

The answer is that the official channels involve DF Concerts, as a company, getting in touch with me. I did not know who the individual was who made the arrangements for that. I think that that answers your point. The request was from what I think is the biggest events company that we have in Scotland; the chief executive of the biggest events company, which runs the biggest music festival, wanted to meet me, and I thought that that was a reasonable thing to do.

The Government meets businesspeople all the time. We meet people who run festivals—I meet festival directors from across Scotland all the time—and that is a normal thing to do in government, particularly if there are concerns, so I met the chief executive of DF Concerts. If there is an implication that it is somehow incorrect for somebody to have worked for the Scottish Government six years previously, I would comment that people have livelihoods, and they work for companies. My relationship was with the company, and that is who I met.

No—I knew that she was working there. I think that her contract finished in May.

Yes—I met her very briefly. Geoff Ellis wanted to let me know about concerns, but the company was looking at the planning and, as is the case with everybody I see as a Government minister, I cannot discuss planning issues. He told me about the environmental work that the company was doing on ospreys. I made it clear that, because the matter was still subject to a planning decision by Perth and Kinross Council, I could hear what he was saying but I could not and would not discuss anything.

That was not a meeting. We met briefly at conference.

I think that there were delegates from my branch, but I do not remember.

The company said that its shareholders were putting pressure on it to consider moving the festival from being a multiday, multistage event. Why is a multistage, multiday event important? If we take the T Break stage, the likes of Biffy Clyro have broken into the music scene by using that stage, so having a multistage arena is important to the success of the event for Scotland. The company indicated that it was under pressure to move from that format to a single-day, single-stage event—which it has been developing in Glasgow—or, if it wished to keep the festival in a multistage, multiday format, it might have to move out of Scotland.

I answered that question clearly on 14 August. The company said clearly that

“the 2015 event could be delivered under pressure but that the additional costs faced in relation to it were a threat to its longer-term viability on that site.”

That is because the funding was for transitional costs for the venue hire for 2015, for the venue to establish itself, and to ensure that the cost of the planning consultants—again, that was a one-off cost in relation to that year—could be met.

The level of funding is on a par with that for a number of events, such as the Turner prize event that is about to open in Glasgow. That is a great event for the city and is quite important. It has been provided with support from public funds to the tune of £150,000. The world pipe band championship regularly receives £100,000. The John Muir festival received £210,000. The amount of funding for other festivals and events is not different from the level that we are discussing. In fact, some events get even more.

That is a question for Parliament and the committee. Do you believe that cultural tourism is important? Do you think that festivals form part of our economic offering? I believe that they do, and T in the Park, as one of the biggest ones, certainly does. A lot of people in the events industry will be wondering about the commitment that people have to that part of the economy and will be looking closely to see where they get support from.

I will bring you back in later.

I have two questions: one is about the business case and the other is about precedents.

On the business case, the £150,000 that we have talked of was paid after the T in the Park event. That might suggest that the company did not have a cash-flow problem. What do we do if the results after audit show that the company made a profit of, say, £151,000? Was there any indication that, in the event of there being a profit this year, the £150,000 would be clawed back?

What business case was presented up front regarding the whole project? I disavow the suggestion that T in the Park would move, because I think that it is co-joined with Scotland. What business case was presented to afford the festival the £150,000? Issues have been presented relating to a move but, in my experience, companies usually have contingencies in the event that things do not go the way they should.

We discussed cash flow with the company, because that might have been one of the issues in need of resolution. The company made it quite clear that it was not a cash-flow issue but an issue concerning the profitability of the event and its success in the future, and that it therefore could take the hard decision that, if the considerable additional costs that were associated with the move from Balado—

Surely the additional costs—

Clearly, there were anticipated costs, which were exactly what should have been planned for and were planned for. It was only in the summer of 2014 that it became apparent that an environmental impact assessment would be required. I think that T in the Park is the only festival that has had to go through that additional planning process; it has had to go through a process that other events that have moved have not had to go through. Therefore, the planning application was more complex, particularly with regard to the considerable environmental issue of the impact on the ospreys. That was not anticipated at the time of the decision to move from Balado. Further, the venue hire was much more costly than had been anticipated.

I have talked about the condition limiting the consent to three years. The other conditions related to environmental impact on nesting ospreys and so on, which reduced the footprint of the land that was available to be used. In turn, that reduced the number of people who would be able to attend, compared with previous years. There were also slow ticket sales due to the fact that people did not know until eight weeks before the date of the event that the event would take place. People will be familiar with the marketing of T in the Park and will know that ticket sales are usually conducted way in advance. It was, therefore, quite clear to us that there was an issue about that when we were approached.

On the projections for the future, the company made it quite clear to us that it would have difficulties in the next two years and that it would therefore make a decision about whether to keep the event at Strathallan or move it elsewhere, perhaps on a single-stage, single-day model, which it has had some experience with and which has been profitable. It will not help the rural economy of Perth and Kinross if the event is moved to a single day on a single stage in the city of Glasgow. That is also a consideration

You asked why the matter is of interest to the Government.

No—I asked where the business case was to prevent that.

Previously, funds have been made available from bodies such as Creative Scotland, VisitScotland and Scottish Enterprise. What approaches were made to any of them?

One of the things that we had to look at was the availability of funding, and one reason why there was available funding in the events funding budget line was that the costs of the music of black origin—MOBO—awards were being pushed from this year into later years, which freed up funding, particularly for this year.

The nature and timing of the event meant that it was not possible for the company to apply for the regular funding that might have been available from other organisations, such as EventScotland or Creative Scotland. The event was not new; it was a transferring one. EventScotland will quite often support event development and marketing.

Scottish Enterprise provided funding in 2012-13 for a feasibility study to look at alternative sites to Balado for hosting T in the Park as part of looking at the economic impact. Scottish Enterprise was prepared to support that, because £15.4 million is important to the Scottish economy. Creative Scotland provided funding of £80,000 in 2013-14 to try to introduce new art forms to a new audience. That was about audience development. VisitScotland provided additional marketing funding relating to the year of homecoming in 2014, as part of a big push to promote Scotland around the world. That was part of its funding.

That gives members an explanation of the funding from other public bodies.

Did you have a business case for the extra £150,000?

Yes, we did. We would not have approved it otherwise.

There are a lot of hypotheticals in that question.

Ticket sales depend on a number of things, not least the line-up and the experience. For those of us who are old enough to—

I am sorry, but can I answer the question, convener?

I am sorry, but we are trying to get quick questions and quick answers. Let the cabinet secretary finish; I will then bring Liam McArthur back in.

We do not know what will happen in future years. RockNess, for example, has been under pressure and has not been taking place.

Festivals can depend on things year to year. As a Government minister, I cannot forecast T in the Park’s ticket sales in 2016 or 2017, but it is reasonable to assume that, in the first year of the move, some people may not have gone because they were concerned about teething problems. There were undoubtedly transport teething problems. That is one of the key concerns that people have had. I cannot predict what ticket sales will be, but I understand why there were pressures this time round. If people did not know whether the event would take place because of the planning approval for it—a decision was not taken until eight weeks before the festival—we can understand why ticket sales were slow this year. That had an impact on what returns would be achieved. There was not only a significant increase in costs; there was pressure from reduced returns in 2015 in particular.

10:45

I will answer that directly. During March and April and into May, the issue was that the event did not even have planning permission. It was not given planning permission until 12 May and one of the pressures on cost was that the permission that was given was limited to three years, which also pressed the costs into three years rather than five. It was only at that time that the meeting that was requested became about funding issues.

That was purely about the fact that T in the Park was a major event and was moving. It was not about funding. It was to keep us in touch. We kept a watching brief on a major festival that was moving from Balado, having been there for many years. It was clearly of significance and there were pressures. As I am sure people identified from the news coverage, the nesting ospreys were a key part of the environmental aspects of whether the event would go ahead.

The meeting that I had with DF Concerts took place after the planning decision had been taken. I made it clear that, until the planning decision was taken, I would not be involved in Perth and Kinross Council’s decision-making process. The costs became clear when a three-year condition was set. The environmental aspects, which reduced the festival’s footprint because of the nesting ospreys, were not clear until the decisions on planning conditions were made, which was not until 12 May.

The funding pressures were not apparent in March and April. They were apparent after the planning conditions were set on 12 May.

Final question, Liam.

You need to repeat it to me. It sounds fairly similar, but I am happy to look at it. I do not think that there would be any reticence. In fact, if you go to any event that has any Scottish Government funding, you will see the logo.

I am genuinely struggling to see the issue here.

I am looking at the timeline of events, which is on page 3 of paper 1. The entry for 14 May uses quite a strong phrase. It refers to:

“the extreme difficulties being faced by the organisers.”

Were those difficulties purely financial?

No, a lot of that was operational. As I said, planning permission had been given eight weeks before the event, so there were issues. The most important of those was probably to do with the infrastructure required. Some of the planning conditions would have required dealing with the heights of bridges and other safety issues; I have also mentioned water access.

A lot of the decisions could be taken only once the planning application had been approved. Therefore, the pressures were not just financial but operational. Those genuinely related to putting on what is the biggest music festival in Scotland, which had been given the go-ahead only eight weeks before the event. The organisers relayed their concerns to me when I met them but, in terms of our concentration of attention, it was the funding of financial pressures that they clearly wanted to talk to us about.

Reference has been made to the additional infrastructure costs accruing in the move from one site to another and the contraction of the period from five to three years during which the organisers could recover those costs. I have no experience of such events. In relation to what happens on site, what would those infrastructure costs be?

It was, I suppose, a decision about whether to have permanent or temporary provision. Temporary provision would mean that the organisers could up sticks at any time, while investing in permanent equipment would mean that they would be more committed to the site. I think that was the type of decision that they were telling us that they had to take within eight weeks of the event taking place.

You have made it very clear that the period in which the decisions were being made was contracted. Normally such events would be planned very much in advance. Indeed, I see that a lot of planning took place well in advance of the event. However, most of the financial planning and so on would have taken place a year or more before the event. I would have thought that the only thing that would have intervened would be the unanticipated planning costs. Did the planning costs trigger the financial difficulties, or was there a previous indication of a problem in the detailed planning?

You will remember that the organisers were told early on—I think that it was in early 2014—that they would not require the planning permissions that were later imposed on them. It was not until summer 2014 that, as a result of a Government assessment, they were told that they would have to have an environmental impact assessment as part of the procedure. They then had to go to the full planning process at the beginning of the year in which they were meant to be delivering the event. Obviously, the environmental aspects of planning in particular, as well as other planning issues, would have put considerable pressure on the costs, given that they were unanticipated costs. The planning consultant costs that they had to face for 2015 were not anticipated a year and a half out from the issues that they knew that they had to address.

Clearly, there were particular pressures over a very short time. The organisers did not know about a lot of the final conditions of planning—and environmental conditions are important—until 12 May for an event that was taking place at the beginning of July.

A number of members want to ask questions, so we will have to be brief, with a question and supplementary each. We start with John Pentland.

Some of the funding for those festivals would not be classified as state aid. Perhaps I can ask Alan Coleman to talk about the process that is required for state aid, if that would be helpful.

Right. Many applications are made to organisations such as VisitScotland, Creative Scotland or EventScotland, in different areas. You want me to go through who I have met in relation to those events; I regularly meet festival directors. For example, the Edinburgh festivals expo fund is not £150,000 over three years but £2.25 million on a yearly basis, to support the Edinburgh festivals because of their £250 million impact on the Scottish economy. I regularly meet the directors, who provide information about what they want to apply for in relation to the expo fund.

I charge the curatorial decision making with thundering hooves, which is the collective of the festivals, on what would or would not merit funding for the book festival or anything else. My officials would work with the collective, and I would see what it wanted to provide funding for. For example, the Edinburgh International Festival’s James plays, which were extremely successful, was a case that I was aware of way before it was announced or an application made, but I do not judge how people spend their resource on those terms.

Festivals are very important to Scotland’s economy. I want to repeat that. I do not think that festivals, the creative industries and cultural tourism are somehow second class in their economic impact, compared with life sciences, energy and other areas. It is really important that members of this committee support that.

I might add something about what the public think of the issue. I have had two pieces of correspondence—two pieces—from across Scotland with concerns about the funding of T in the Park. I am not saying that the issue is not of public interest; the committee is absolutely entitled to have information and we need to be open and transparent.

Despite the question that Liz Smith asked at the end of July or beginning of August being very limited in its scope, I set out comprehensively on 14 August the background to the decision, why we had made it and a timeline of information. I wanted to be open and transparent, given that what happened was in a different format from normal—you are right to say that—as a result of unanticipated costs and pressures on a major event, which were not known until the planning decision was made on 12 May.

Do I then tell them—sorry?

In terms of planned expenditure for festivals, I would not see, for example, the application in relation to the world pipe band championships—that would go to EventScotland. Perhaps Malcolm Pentland can explain what happens in that regard.

Thank you. We will move on to Mary Scanlon—

I am sorry, John, but I did tell you.

I did not, because my business is based—

Well, I do not read everything. The applications and phone calls were made to my office, but I did not see them. I thought that I had been quite clear—

Let the cabinet secretary answer, Mary.

11:00

I have been quite clear. I do not decide who DF Concerts employs or does not employ. Jennifer Dempsie was an employee of DF Concerts; she has not worked for the Scottish Government for six years. I do not expect everybody in the Scottish Government—the thousands of civil servants that we have—to know who she is or to alert me. I do not think that people should have to show a party card in working for an employer—that situation would be incorrect.

With regard to the decision-making process, I met Geoff Ellis and the financial director Jo Blyth. It was those two who I spoke to and who expressed the concerns about the conditions that they faced, the increased unanticipated cost and the pressures on revenue. It was in answer to them, and to their request, that I asked officials to look at what had happened.

Officials also attended the meeting with Geoff Ellis and Jo Blyth and heard directly from them. We asked them for various bits of information—I have set out in the timeline when we did so. We asked them for financial information, which we received, but under commercial confidentiality rules I cannot share that publicly. That is part of the everyday work that Government does.

Was this an unusual situation? Yes, it was unusual, and it was a pressured situation. That is why I have made it quite clear and transparent in my written answer of 14 August why we did what we did. I believe that it is important for the interests of Scotland that we have a continuing T in the Park that is a multistage, multiday event and that benefits rural Scotland and not just city Scotland. I am pleased to be able to have done that.

I did not see those emails.

I personally did not see those emails. I personally did not discuss them with—

I was told by my office that Geoff Ellis, the chief executive of DF Concerts, wanted to meet with me.

I have a brief supplementary, following on from my previous question. Would all the hysteria around the situation not have been avoided if we had used the bodies that are there, such as Creative Scotland and VisitScotland? Would that not have been better, rather than having someone approach you directly, no matter how well they knew you or did not know you? Can we look at that so that we avoid such a situation in future?

I will answer that and then ask Malcolm Pentland to come in.

If a request was anticipated, we would be able to use other bodies to respond. However, in this case, we had the funding available in the major events budget because of the change in the circumstances of the MOBO awards, which released funding.

We had the legal powers to act and we wanted to move swiftly, as we had a very limited period of time. It would have taken much longer if people had had to apply through the regular funding routes of Creative Scotland or EventScotland. As I have said, the funding that EventScotland provides would not necessarily have been applicable in the timeframe.

With all due respect, I understand that those routes would take longer, but it would depend on how the situation was managed. There was nothing stopping the movement of a budget—I still do not understand why there is a separate budget—to augment overnight the budget of Creative Scotland, if that route was taken, while saying, “Right—you handle it.”

From a management point of view, that would have avoided all the hysterics around your office getting sucked into the situation, and the questions of who did what and who did not do what. Might I humbly suggest that such an approach is taken in future?

Sometimes in Government we have to make decisions swiftly to ensure that the economic interests of the country are protected, which is what I did.

With regard to the ability to channel the money through other funding routes, I know what would have happened. I would have been in front of the committee again, because the event would not be taking place in 2016 and 2017. I think that the committee would have had a strong interest in wanting to bring me before it if the event had not been taking place in those years.

If we had transferred the funding from the major events budget to Creative Scotland, there would still have been a state-aid issue, because it would have come from a public funding source. That would have meant that, in terms of what DF Concerts would have been allowed to spend the funding on, and in terms of what Creative Scotland or indeed EventScotland would normally provide funding for, the approach would not necessarily have covered the eligibility of costs that would have been compliant with state-aid rules. Therefore, actually, in terms of transparency and clarity and ensuring compliance with state-aid rules, the route that we took was appropriate—indeed, it has been deemed to be appropriate by those who have looked at the issue.

In terms of discussions, I met them at the SNP conference, which was not prearranged. That was just about them telling me about their planning process. I could not engage with that discussion, because the issue was clearly still subject to planning discussions. That was a very brief meeting back in March.

As detailed, I met the representatives on 28 May, after their request to discuss funding. Attendees at that meeting were Geoff Ellis, Jo Blyth, Malcolm Pentland and an official from planning. I will just check whether anyone else was at the meeting. Interruption. I am told that it was Helen Wood from planning who attended, along with Malcolm.

It was not a meeting—it was not prearranged. There were many people, companies and organisations there as observers. Our party had just gone from having tens of thousands of members to more than 100,000 members. One in 50 of the public is now a member of our party, and people wanted to see what was happening.

I was very clear that I could not enter into discussions about planning. That was all it was—it was not about funding—and I could not enter into discussions. I was told about the environmental work that was going on in relation to the osprey nesting, which was obviously causing the organisers some concern, although they felt that they had it all in hand in terms of their planning application. It was a very short meeting and it was not prearranged, and it was in party space, not Government space.

Some of the Government meetings were cancelled because there were concerns around the planning and the timing. If you recall, the planning decision by Perth and Kinross Council was meant to be made on a certain date and was then put back. I am not responsible for the timing of that. Meetings with ministers have to be arranged. Because of my responsibilities, I quite often have to cover for the First Minister or the Deputy First Minister. I cannot recall why the meetings were cancelled and at whose request.

I remember that DF Concerts wanted to cancel because it wanted to concentrate on the planning issues at hand, with Perth and Kinross Council. That was the key issue. You should remember that, at that point, it was not clear whether planning permission would be given. DF Concerts was clearly focused on securing a favourable planning decision, and that is what it concentrated its resources on. I am not accountable for how it manages its diaries, but I can understand that it wanted to focus on meetings in relation to the immediate planning decision rather than the overall transition, which was of interest, in discussion with me.

In terms of the individual, she worked for the Government over six years ago. In terms of her status, she is an employee of DF Concerts. It is up to DF Concerts who it employs as staff members of its organisation. I cannot refuse to work with an organisation because of who it employs or who it does not employ.

In relation to why I should meet someone, should I have met DF Concerts? Absolutely—because it is a major events company. It was in a major transition year—a very pressured year—for the biggest music event that we have in Scotland. Being kept in touch and up to date with the process of that as the lead minister for major events was absolutely part of my responsibilities. The application was made by DF Concerts itself.

As far as public outcry is concerned, I understand the need for openness and transparency, which is why, despite the question that I had from Liz Smith in August being simply about how much and when, I proactively laid out in a full parliamentary answer full information about what happened and when. I raised at that point issues around viability. In terms of the public outcry, as I said I have had two letters from members of the public about the funding issues. The other letters—I think that there are another three—are understandably about the event management, the pressures and the problems that there were at the actual event.

I absolutely understand that people can be concerned—they are quite right to be—but I also know absolutely that, if T in the Park had been under pressure and had not delivered properly in 2015 or had indeed moved in 2016 or 2017, people would have demanded to know what we as a Government had done to ensure that T in the Park stayed as a multistage, multiday venue in rural Scotland. I think that they would have been entitled to ask that question. Sometimes we have to make decisions that some people might not like but are important for the greater cultural and economic interests of Scotland, and that is the decision that I took.

The concerns were the additional and significant costs in relation to the planning issues and planning decisions of 12 May. In the answer that I provided, I made it quite clear that the money was in relation to the added pressures, that it was a one-off grant, that it was to support the transition and that it was about ensuring that we were supporting tourism. The pressure and the risk were laid out in paragraph 8 and paragraph 11 of the answer of 14 August.

Would I like to be able to provide the commercial “in confidence” figures that were given to me? Of course I would, but that is not how Government works—not with this company and not with others. Companies will not come to us when they are at risk if they think that we are about to publish the pressures that they face in terms of their budgeting. You have to understand that it happens in other areas of industry—people understand that quite readily—where jobs and economic interests are set out. People just sometimes find it difficult to understand cultural festivals and tourism as economic businesses.

I would have liked to provide the information to the committee: I could not, but I can give you the assurance that officials looked at the business case very robustly. We ensured that it was compliant with state-aid rules and we had the senior accountable officer sign off the final grant when it was provided. I have given you as much assurance as I can give. It might not satisfy you, because you want to see the commercial information, but I cannot provide you with it. I would not be able to provide such information in respect of other companies, whether in life sciences or other areas.

Yes—and that is what we have done.

11:15

I will ask my colleagues to answer you as well, because they were part of this. We questioned what would be eligible, because Glasgow City Council had already provided £200,000 over a three-year period. The council has asked that, should that information be shared with the committee, it should be made clear that the funding that was provided by the council was a commercial arrangement between the council and DF Concerts to establish the summer seasons on a level commercial footing so that, in future years, they would generate money for the city. That is a transition situation that is similar to what we have been discussing.

One of the issues was what we could provide, because we could not provide de minimis aid or investment aid, but we could provide operational state aid.

Perhaps Malcolm Pentland or Alan Coleman could come in on this point.

As you have just heard, we knew that the company was profitable. The issue was the event, not the company. Unusual pressures were involved in the circumstances of the event—for example, the fact that it was moving for the first time for decades and faced additional pressures in terms of that transition, and the fact that there was an unanticipated cost relating to planning conditions, which became apparent only on 12 May. The circumstances were not normal.

That is a matter for DF Concerts and Tennent’s, in terms of their relationship—

Clearly, £150,000 did not come anywhere near to alleviating the other pressures in relation to infrastructure and other aspects that we could not fund. DF Concerts will have had discussions with Tennent’s about costs that it had to meet. The seven-figure sum that was required for the transition will have had to have been met from all the sources that are available. The £150,000 from the Scottish Government is conditional on the festival taking place in 2015, 2016 and 2017. That was what the clawback provision is about.

DF Concerts provided us with its projected costs and its projected revenue from sponsorship, ticket sales and so on. That is the information that was also provided to the committee.

I am glad that you now realise that I cannot influence ticket sales.

At the end of the day, you have to decide whether you think that T in the Park contributes to the Scottish economy—as members of all parties said it did when we had a parliamentary debate on festivals that provide cultural tourism, particularly in rural areas, and which also allow opportunities for cultural celebration. Supporting such an event is not an unreasonable thing to do.

John Pentland asked whether we were operating in normal circumstances. No, we were not. Did we act in the interests of the Scottish people, whom we are elected to represent? Yes, we did. Did we interfere with the relationships that DF Concerts has with its other sources of funding? No, we did not. However, we had a clear responsibility to act. We could have said that we would not act. I think that some members of the committee might have wanted us to say that, because of the unpopularity in some parts of Perthshire about the idea of T in the Park relocating there. However, for many people in Scotland, over generations, T in the Park is important to them in terms of culture and the economy.

Sometimes, in Government, we have to make decisions within tight timescales. However, the request was legal and could be provided for because it was within budget and complied with state-aid rules, and I was prepared to make that decision. Some people might not have wanted me to do that; they are entitled to their view, but sometimes you have to assess risk and, as a set out in my answer to Liz Smith’s parliamentary question on 14 August, there was a risk to the viability of a multiday, multistage festival being held in rural Perthshire. I decided that we had to do something about that, rather than ignore it. I am sure that members of this committee would have been the first to challenge me if we had stood back and done nothing with the result that, in future years, T in the Park would not be as we know it today.

I thank the cabinet secretary and her officials for their attendance. We will have a short suspension.

11:23 Meeting suspended.

11:27 On resuming—