A FORMER minister who blew the whistle on a costly TT sponsorship deal said he had been ‘shocked and appalled’ by the terms of the contract.
And the Public Accounts Committee investigating the Signature Sponsorship deal revealed that they had still not found a copy of the signed contract.
The lucrative deal with Signature, which aimed at transforming the TT into a more viable commercial prospect, saw the company paid a basic £70,000 a year, plus £15,000 in expenses and 22.5 per cent in commission.
It left government with a £750,000 liability – on top of the £900,000 the company had already been paid – as it couldn’t afford to break the contract.
Martyn Quayle, who was Minister for Tourism and Leisure between August 2008 until the restructuring of government departments in April 2010, told the committee that he had instigated an internal Treasury audit of the Signature deal because he ‘wanted to ensure no department or entity of government could end up in similar circumstances again’.
He said Signature had secured a deal where they had effectively been able ‘to write their own cheques’.
‘I was shocked and appalled that the department had somehow ended up in a position where they paid 22.5 per cent commission on gross income rather than take into account various costs in achieving increased revenue.’
Committee chairman Alfred Cannan asked: ‘Did you see the contract?’
Mr Quayle replied: ‘A signed copy could not be found.’ He said there had been 50 versions of the contract with 100 additions or amendments.
Committee member Leonard Singer questioned how the signed contract had ‘mysteriously disappeared’. He said: ‘I find it unbelievable that a signed copy of the contract could not be found in the department.’
Mr Quayle said he had been shocked when he was appointed DTL Minister to find a department which was ‘not fit for purpose’, with no full-time chief executive, a director of tourism on sick leave, and staff moved around from ‘pillar to post’.
He said the Council of Ministers had discussed in March 2009 how the deal could be terminated but the DTL did not have the £605,100 to pay Signature a one-off exit fee. Instead, the contract had been allowed to run out at a cost of £250,000 a year.
The former minister, who was ousted as Middle MHK in the last general election, claimed an opportunity had been missed to terminate the contract after 18 months, which was a clause contained in the deal Treasury allowed to progress without a tendering process in December 2005.
Also giving evidence to the committee was Mr Quayle’s predecessor as minister, Adrian Earnshaw, who said he had been in the post for about three months when he discovered the Signature contract had not been signed.
He said he didn’t know a contract had not been signed until about Easter 2007.
Mr Earnshaw, who was MHK for Onchan until he lost his seat at the last election, recalled the then chief executive Carol Glover had produced the contract and said they were ready for it to be signed. ‘I was astonished at getting this news.’
He added: ‘I think there was a degree of panic when I said I wasn’t signing the contract. I wasn’t happy and not prepared to sign the contract that had been operating so far retrospectively.’
He said subsequently the contract was split, with him signing one covering the period from May 2007 and Mrs Glover signing the one covering the period before.
Mr Earnshaw said: ‘I don’t know what happened to the contracts. Have you seen them?’
Committee chairman Mr Cannan said: ‘No we have not seen the contracts at all.’
Mr Earnshaw was asked about £330,000 that was owed to the department which was kept by Signature in the company’s private account.
The ex-minister said while there had not been massive figures involved at Easter 2007, he had ‘serious concerns’ by the end of that year.
Mr Cannan asked: ‘When you signed that contract do you recall the clause giving Signature 22.5 per cent commission on television revenue?’
The witness replied: ‘There was confusion as to whether it was net or gross. I can’t recall the detail of that. I was aware of the 22.5 per cent.’
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