TAXPAYERS will continue to foot the bill for a costly TT sponsorship deal right up until the income has been received from next year’s races, Tynwald was told.
Questions were asked in the court about the on-going costs of the Signature Sponsorship deal which is being investigated by the Public Accounts Committee.
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.
A former minister Martyn Quayle, who blew the whistle on the arrangement, told the committee he had been ‘shocked and appalled’ by the terms of the contract which said effectively enabled Signature to ‘write their own cheques’.
No signed copy of the contract has yet been found.
In Tynwald, Economic Development Minister John Shimmin MHK was asked whether his department is continuing to engage with Signature Sponsorship Ltd.
Mr Shimmin said he wished to make it clear to members that his department has not continued to engage Signature Sponsorship – although it does have a ‘temporary residual contractual obligation’.
He explained: ‘The former Department of Tourism and Leisure had a contract with this company which ended in 2009.
‘The only engagement my department has with the company relates to the payment of tail commission which my department inherited upon the restructuring of government in 2010.
‘As already disclosed at the Public Accounts Committee hearing, the department has a liability to pay commission on gross revenues received from relevant contracts with third parties at a rate of 22.5 per cent. These third party contracts were entered into during the period of the Signature contract. The last third party contract to which tail commissions apply will end after my department has received the income from TT 2013.’
John Houghton (Douglas North) asked for the costs involved and questioned why payments were being made if the original contract had not been signed.
The minister said he could not disclose the costs as the contract for TT television coverage was up for renewal.
He said he understood that members would not be pleased with his answer.
Mr Shimmin told the Manx Independent that the ongoing tail commission costs came within the £750,000 figure for liabilities already disclosed to the Public Accounts Committee and added that the £750,000 was a worst case figure that was unlikely to be reached.
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