Q71 Mr Bacon: Once this fact that one quarter of the space was unoccupied became known, did an edict go out to get this space occupied very quickly? It seems a rapid rise after it had been unoccupied for such a long time. How did it get to 6% so quickly and who is in there?
Mr Peat: May I just assure you that one of the results of the NAO Report was to draw attention to the extent of the unoccupied space and the Board of Governors did request that management make every effort to reduce the unoccupied space rapidly.
Mr Thompson: I have to say that I did indeed inherit a plan which absolutely was to get the vacant space down.
Q72 Mr Bacon: Could you send us a note on who has been moved in and the composition of the occupation of the space by function since the building first began to be occupied until you got to the 6%? Could you do that?
Mr Thompson: Yes; we can do that and we will also include the plans for the full utilisation of the space going forward.1
Q73 Mr Bacon: Mr Peat, may I ask you about bond finance? Were you saying that the BBC could not access the capital markets because of your credit rating-which is what I thought I understood you to say-or because of structural or regulatory limitations on your access to the capital market?
Mr Peat: I was making two points and I shall ask John Smith to provide more detail because he has been very closely involved. The first point I was making was that at the time the original deal was struck we did not have a credit rating in the BBC; we had not gone down that route before.
Q74 Mr Bacon: Do you mean that the ratings agencies had not been to visit you?
Mr Peat: We had had none of those conversations which are required.
Q75 Mr Bacon: The boys have been round now, have they?
Mr Peat: Yes, the boys in pinstripes have been round and great efforts were put in.
Q76 Mr Bacon: What is your rating?
Mr Peat: It is AA; it is very satisfactory from three rating agencies, but it takes time to get to that stage. That was my first point. My second point was that the bond market has changed substantially over that period and we managed to get this refinancing through at a time when long-term interest rates were at an historic low, so it was an excellent time to undertake the refinancing.
Q77 Mr Bacon: There were no regulatory restrictions, it was merely, literally, a matter of physically not having had a credit rating.
Mr Peat: There was no experience of this; it was just that, because of all the other work which was taking place on this project, there was no capability to do it at that juncture.
Q78 Mr Bacon: Mr Thompson, you referred to the Manchester project. How much will that cost if it goes ahead?
Mr Thompson: We are continuing to work on the figures for that.
Q79 Mr Bacon: You do not know yet.
Mr Thompson: We put an initial number in the public domain a year ago, which was a range from £550 million to £600 million. Work since then suggests that we can achieve everything we want to achieve at Manchester for substantially less than that.
Q80 Mr Bacon: So you are still working up the numbers.
Mr Thompson: We are talking to our Governors.
Mr Peat: We are still working down the numbers rather than working up the numbers.
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