(Hansard Record)

What the gross cost of delivering the TT and the Festival of Motorcycling is; and how much commercial income is generated by each?

The Speaker: Question 14, the Hon. Member for Douglas North, Mr Houghton.

Mr Houghton: Thank you, Mr Speaker.

I beg leave to ask the Minister for Economic Development what the gross cost of delivering the TT and the Festival of Motorcycling is; and how much commercial income is generated by each?

The Speaker: The Minister for Economic Development, Mr Skelly, to reply.

The Minister for Economic Development (Mr Skelly): Gura mie eu, Loayreyder.

I thank the Hon. Member for his Question.

The figures I am providing today are for the last complete financial year of 2014-15 and relate to our Department expenditure only. The figures account for all expenditure relating to the delivery of the festival events on and off the course.

For the TT the gross expenditure was £4,662,644, while the gross income was £2,057,248.

For the Festival of Motorcycling the gross expenditure was £1,611,862, while the gross income was £111,080. All income is used to defray the cost of delivering both events.

Therefore in the financial year of 2014-15, the net expenditure of our Department for the TT was £2,605,396 and for the Festival of Motorcycling it was £1,525,205.

Gura mie eu.

The Speaker: Supplementary question, Mr Houghton. 

Mr Houghton: Thank you, Mr Speaker.

Noting that the total expenditure for both events, the combined expenditure is £3.5 million, in that order, how does the Minister equate that that will balance in this year’s costings?

The Speaker: Minister to reply.

The Minister: Gura mie eu, Loayreyder.

We do expect that there will be continued growth actually in the events and what is not highlighted in the original Question, which was just our Department, is also the benefit both to the local economy, which is estimated somewhere in the region of nearly £28 million for the two events and also the Exchequer benefit.

As highlighted previously, the events themselves virtually wash their face in terms of Government income, Government expenditure, but the real benefit, of course, as I think we all recognise is the spend in the local economy, which is substantial.

The Speaker: Mr Houghton, supplementary.

Mr Houghton: Thank you, Mr Speaker.

It is interesting to note that the Minister says that both events therefore wash their face in respect of income and expenditure. Is the Minister aware that in a press release of 30th October this year his departmental Member, Mr Cretney, states that the Department will have spent £4.6 million delivering these two events for 2015?

With commercial income streams for both events rising sharply to over £2.5 million for 2015, and with the benefit to the Exchequer of £5 million, it states that the Department is delivering almost £3 million worth of net receipts back to the Treasury. Whereas in an article in Bikesport magazine an officer of his Department reports that in their standalone budgets itemed in the Isle of Man Government’s portfolio, the events operated a combined loss in excess of £1 million per year.

So, in summary, Mr Speaker, can the Minister explain why he says the event washes its face, that means it is a nil balance cost for the amount of work it means bringing people to the Island to enjoy the TT, Mr Cretney states it makes a profit of £3 million and of course his Departmental officer, in a very interesting news article in Bikesport magazine states it loses £1 million. What is the issue with the inconsistency of information (A Member: Spin.) in his Department.

The Speaker: Minister to reply.

The Minister: Gura mie eu.

Obviously the Hon. Member has picked up a number of statements there and of course, as always, you have to take everything in context. When we talk about this event actually washing its face I think what we have to do there is look at the overall benefit to both the Government, in terms of its expenditure and income, and as I mentioned with regards to Exchequer benefit. But as I say, the real benefit is of course, what is the spend in the local economy. And as we have seen that growing year-on-year, somewhere in the region of about 13% last year, it is clearly providing an economic benefit.

So there are various figures and I would be happy to give a breakdown of what I just supplied previously in the original Answer because we can break that down to what those expenses are, whether they be race expenses, course expenses, TT administration, prizes, marketing. We would be happy to give that breakdown if that might be helpful for the Hon. Member to understand all those facts and figures.

The Speaker: The Hon. Member for Douglas West, Mr Thomas. 

Mr Thomas: Thank you, Mr Speaker.

Perhaps part of the problem or complexity of the answer and the differences in the Answer is the cost to other Departments. Does the Minister have any estimate of the cost of both events to other Departments? 

The Speaker: Minister to reply.

The Minister: Gura mie eu.

Yes, obviously with the work we have been conducting recently around the TT Series we have been engaging more, I think meaningfully, with Departments to understand what those costs are and we always recognise that there have been costs there.

We are engaging with those Departments at the moment and if I go back to what the figures that have been related in terms of the Exchequer benefit and the economic benefit, that is determined by the Cabinet Office in terms of economic affairs and that is what we need to do is actually look for a separate body to actually validate any of these figures to get to the real nub of it.

But in essence we are taking on board the wider impact of the TT in terms of expense and of course what that income is as well at the same time.

A Member: Tut-tut!

A Member: It might be something important. 

The Speaker: When we are ready … Mr Houghton.

The Chief Minister: Sorry. (Laughter)

Mr Houghton: Thank you, Mr Speaker.

Will the Minister not agree, though, from the information I have just provided him, that there is an inconsistency in the information his Department is putting out? He is saying one thing, an officer is saying another, and his Member, who has provided the information from the Department, is saying something totally different. I would tend to rather believe his officer and his report in the Bikesport magazine, notwithstanding the income it brings to shops and other retail outlets – not withstanding that.

Will he certainly agree to provide a breakdown or an analysis of all the figures across Government Departments to Members, and would he solemnly promise to do this? Because this Minister, Mr Speaker, has promised that before, and I refer to examples in the TT World Series, where he promised to provide us with information many weeks ago, which we are still awaiting.

The Speaker: Minister to reply.

The Minister: Gura mie eu. 

I will certainly come back to Hon. Members if there is any information we have not provided. I thought I had previously; however, I will go back and check that.

In terms of inconsistency, as the Hon. Member highlights there, I think what you have to do, of course, is look at the context of each of these issues, whether they be a statement by an officer, by a Member, obviously by me as Minister, or in any sort of media publication.

What I will do is ... the information that I have answered today, I will provide that breakdown of that expenditure, so that Members will understand exactly what that is, and I will do that as quickly as we possibly can.

The Speaker: Hon. Member for Ramsey, Mr Bell. 795

Just one question, Mr Speaker. We are talking about the cash values of supporting the TT here. Could the Hon. Minister say whether in fact any work has been carried out to identify the unquantifiable benefits to the Isle of Man in terms of worldwide awareness of the Island at a very difficult economic time, which often manifests itself in the Island through new business coming here, not related to the TT or often not even related to tourism, but which has a huge value and has had a huge value over many years?

The Speaker: Minister to reply.

The Minister: Gura mie eu.

Yes, I would absolutely agree with the Chief Minister there. The profile of the TT clearly has a strong benefit, much wider than the actual expenditure and the costs that we are talking about here this morning.

It was only just last week, interestingly enough, that one of our insurance companies had a ... [Inaudible] of a substantial piece of business that was coming from down under, actually going to house that insurance captive market business right here in the Isle of Man – on the back of the TT. We have already seen, in other areas, with regard to profile, things like the TT Zero. That helps our clean technology industry grow here on the Isle of Man. And there are lots and lots more examples of those particular wider benefits that we do see.

What we are trying to do ... and I think the point of the Hon. Member who is asking the question is that we need to demonstrate what that real benefit is, and clearly we will continue to do so on an ongoing basis. What we do need to do is have that validated more or less externally. We are not just doing it in the Department here. We have Economic Affairs, who conduct a number of different surveys to ensure that the information provided is as accurate as it possibly can be.

The Speaker: Supplementary, Mr Karran.

Mr Karran: Vainstyr Loayreyder, would the Shirveishagh not agree that the bottom line as far  as replies in this Hon. House should be on the same basis of truth outside this Hon. House as inside this Hon. House?

The Speaker: Minister.

The Minister: The answer to that is absolutely, yes, and I endeavour to do so. 

The Speaker: Hon. Members, that brings us to the end of Questions for Oral Answer.

Isle of Man TT

EXPENDITURE

Race and course expenses £594,382 and £596,190

Grandstand £334,976

Administration £1.74m

Festival events £137,641

Prize and travel £1.16m

Marketing £104,000

Minor capital works £94,733

INCOME

Website/TV licensing £609,179

Grandstand and rentals £295,881

Sponsorship and hospitality £1.017m

Miscellaneous receipts £134,467

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Festival of Motorcycling

EXPENDITURE

Race expenses £506,048

Course expenses £263,390

Grandstand area £244,014

Administration £348,101

Festival events £35,067

Prize and travel £239,663

INCOME

Website/TV licensing £1,735

Grandstand and rentals £29,060

Sponsorship and hospitality £60,423

Miscellaneous receipts £19,861