Sunday Times follows up on ResPublica’s “cash crisis”Posted on June 6, 2011
Following my story on Tuesday reporting the possibility of Phillip Blond’s ResPublica think tank letting “a sizeable majority of staff” go, the Sunday Times has apparently done some digging. In their article (behind the paywall here) they have dug up confirmation of my story as well as several other interesting things.
First, apparently ResPublica submitted a set of unaudited accounts to Companies House “last week, more than a month overdue”.
Those accounts cover the period 28 July 2009 – 31 October 2010, so it’s worth noting that they give us an insight into ResPublica’s first 15 months rather than the current state of play. The accounts also reveal several other interesting things about “ResPublica Policy Limited”, to give the company its official name, particularly the fact Phillip Blond is the company’s sole director and shareholder.
The second finding in the Sunday Times is that my report that an outright majority of staff would be leaving was accurate – and in fact that the majority of them have already left. Of the 16 staff listed on their website, according to the Sunday Times “redundancies and voluntary departures mean that only about six now remain”. Presumably the person whose job it is to update the website when people leave has, erm, left. ResPublica have put out a statement saying this dive in the number of employees is due not to any financial concerns but instead is part of a “restructuring” period.
Third, apparently ResPublica staff were actually locked out of their office by the landlord for non-payment of rent for a period which the Sunday Times’ source calls two weeks. ResPublica claim the period was only “several days” and that the failure to pay rent was due to a “technical bank account glitch” which for some reason could only be set right when Phillip Blond himself returned from (yet another) trip abroad. This is truly remarkable – and appears to be either a sign of an outfit with money troubles or one that is practically dysfunctional.
Most strikingly the accounts themselves reveal – and ResPublica acknowledge – that Phillip Blond has even taken out a loan from the company of £38,609, on top of a salary of £55,000 paid in dividends and other money towards reimbursing cash that he’d invested in setting up the company. That £38,609 loan was still outstanding as of 31st October 2010, though seeing as he’s the only director and shareholder of the company doing the lending and the recipient of the loan I’m guessing he’s not too scared that he’ll chase himself for it too hard.
So what do the numbers in the accounts show overall? The Sunday Times points to the Assets vs Creditors section of the document, which shows Assets of £244,092 and Creditors’ amounts of £257,450. In total ResPublica had net liabilities (debts exceeding assets) of £13,358. That doesn’t look like financial stability.
ResPublica’s response quoted in the Sunday Times is that the company made a “healthy profit” of about £4,000. Again, I’d argue even that isn’t very “healthy” at all for an outfit the size of ResPublica. Worse, as far as I can see that figure is actually the Profit/Loss Account of £3,197, so the reality is actually 25% less than the claimed £4,000. Furthermore, even that £3,197 only registers in the accounts as a positive figure because it takes into account tangible assets like computers and office equipment, which in this case are valued at £21,082.
The wider debate is about whether ResPublica is in “financial turmoil” (as the Sunday Times and I have reported) or not. In my view, a company doing a restructuring which involves losing or getting rid of 10 of their 16 staff, gets its staff locked out of the office for non-payment of rent and has a positive financial balance of at best just over £3,000 (including the value of the office desks) certainly gives the impression of such turmoil.
All in all, not a great picture at ResPublica Towers. I wonder if the remaining staff have considered taking it over themselves in a Red Tory mutualisation project to see if they could run it better than the current management?
NB If you’re interested, ResPublica’s full rebuttal statement – in which they quite cheekily accuse the Sunday Times of “an inability to read accounts” is on ConservativeHome here.