Millennium hiring sparks political row

This is a tale of a Cabinet minister, the world’s favourite airline, a Government quango and the appointment of an Australian ad man – who directly contributed to keeping the minister in power – to help run that quango.

News that M&C Saatchi’s founding partner Bill Muirhead has been appointed as communications director at Millennium Central, the body charged with running the Millennium Exhibition and controlled by Cabinet minister Roger Freeman MP – also Chancellor of the Duchy of Lancaster – has had both politicians and advertising bosses scratching their heads (MW February 14). Muirhead was a key adviser to the Conservative Party during the 1992 General Election.

For the politicians, the question is how could Millennium Central, a public body funded with National Lottery cash, hire its first director without the usual round of job ads and competitive tendering. Meanwhile, Muirhead’s peers in advertising have been left wondering why he would apparently want to give up his 20 per cent stake in M&C Saatchi.

Shadow National Heritage spokesman Jack Cunningham was quick to query Muirhead’s appointment: “It seems unusual that an appointment to a wholly-owned Government company has been made without the post being advertised. I will be making further inquiries.”

But since Marketing Week broke the story the situation has become even more confused. Last week, Millennium Central confirmed on four separate occasions – twice through spokesman Mike Elrick – that it was a full-time post and that an undisclosed salary had been allocated to him.

By Monday of this week, the position had been downgraded and Millennium Central said Muirhead was doing it “off his own back”, without payment. But that does not tally with what Muirhead has told his own contacts that he will stay in the position “for as long as it takes” to set up the end-of-century exhibition.

When Marketing Week contacted Muirhead he refused to comment on his salary but certainly gave no indication that he was working on a voluntary basis.

Cunningham says he will look at the Nolan Report on standards in public life to see whether Millennium Central has followed its guidelines.

Ironically, Freeman is also the minister charged with monitoring the implementation of the Nolan recommendations.

Nolan’s report states: “Responsibility for appointments should remain with ministers, advised by committees which include independent members… The process should be open and departments should have to justify any departures from best practice. Job specifications should be published, and a wide range of candidates should be sought. The suitability of each candidate should be assessed by an advisory committee.”

Cunningham may ask how “open” the search for candidates to fill the post was, whether job specifications were published and how many candidates were sought. But the quango is now saying that Muirhead has not been appointed and, if he were to be, it would, of course, need to go through the usual round of job interviews and shortlists.

Sources suggest that Muirhead was approached for the job by Robert Ayling, chairman of Millennium Central and chief executive of British Airways – another M&C Saatchi client – and, at an estimated 10m, the leading sponsor of the Millennium Exhibition.

Indeed, Muirhead will continue to look after the BA and Mirror Group accounts at M&C Saatchi, which raises the strange spectacle of him talking to Ayling about the Millennium party and then in the next meeting discussing BA’s advertising.

Muirhead will report directly to Jennifer Page, who was appointed chief executive of Millennium Central last month after nearly two years as chief executive of the Millennium Commission.

If he is finally appointed to the job, he will have a crucial role in dealing with sponsors of the Exhibition – British Airways, BT, Swatch and GEC – as well as recruiting new ones to cover the 150m private sector sponsorship it needs to add to the 200m already pledged by the Lottery.

The plot thickens. Staff at M&C Saatchi first thought Muirhead’s appointment meant he was leaving the agency in which he has a 20 per cent stake. In the past two years, Muirhead has been responsible for setting up M&C’s international network and establishing offices in New York, Sydney, Auckland and Hong Kong. That done, his brief has been fulfilled.

Millennium Central itself is a strange creation, straddling the public and private sectors in a way that has left even Whitehall civil servants wondering about its exact nature. It is described as a “non-departmental public body” or, more commonly, a quango. However, it is different from other quangos in that part of its role is to raise money.

It has been set up as a company, with Freeman as its sole shareholder. Heritage Secretary Virginia Bottomley was in line for the position but, in view of her role as chairman of the Millennium Commission – which is funnelling Lottery money to the exhibition – it was decided to hand it to Freeman, who is Minister for public affairs.

A Cabinet Office spokeswoman says Freeman will be advised by officials from the Department of Heritage, though a spokeswoman for the latter says rather confusingly: “It depends what you mean by advice.”

Last Wednesday Millennium Central was officially brought into being and began the job of hiring staff and putting together its business plan. However, it has already appointed the building companies John Laing and Sir Robert McAlpine to manage construction work, which will start in July.

But Millennium Central faces a dilemma. Its double function of being responsible to Parliament as a recipient of Lottery cash, while also needing to function in the private sector, means it must balance the tight checks that are kept on public bodies with the entrepreneurial skills and improvisation needed to succeed in the private sector.

Freeman is accountable to Parliament on all matters relating to Millennium Central. It would be ironic if the first thing he was made accountable for is his first appointment – Bill Muirhead.