Monthly Archives: May 2011

Readers top 3,400 for AssetCo, MetPro and green dirty tricks

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Last week visits to the site topped 3459 with massive interest in the fate of AssetCo, the collapsing private fire company which owns London’s and Lincolnshire’s fire engines. Two blogs attracted  over 2500  hits. A big number came from the Fire Brigades union (many thanks), but a significant minority are people picking up  the blog from three small investor sites – as speculators wonder whether to dump their shares or throw more money at it. With shares at just 3.50p at the moment the company is little more than junk stock.

A sudden rush on an older blog exposing how the environment ministry has biased its ” red tape” review of green laws and regulations to favour burdens on business at the expense of the benefits of the  law, has attracted over 940 hits. Thanks to environment campaigner, George Monbiot, for retweeting it and attracting extra trade and a  few subscriptions.

Expect now a pause in blogging as I am off  to the tranquil and peaceful delights of the Isles of Scilly for hopefully an accident free holiday ( after my fall there last time!).

Update: Now AssetCo’s financial saviour quits

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AssetCo's state of finances: Pic Courtesy:www.onenewspage.co.uk

 Scott Brown, the Australian financial whizz kid brought in to shake up the collapsing private fire company, quit AssetCo yesterday, it has just been announced.

His departure is the latest blow to the firm which owns and services London and Lincolnshire’s fire engines and provided a strike breaking auxiliary workforce in the dispute with the London Fire Brigade over shift patterns last year.

It came as shares fell to just 3.93p – a new low – which must mean the company is not long for this world.

Appointed only last October the 43-year-old was meant to help turn the company round and plan an expansion of its activities.

The official statement from AssetCo described his departure as part of ” the orderly transition in its finance area  ”  claiming “Mr Brown’s immediate duties and the finance structure is being managed day-to-day by a senior interim manager, who is reporting directly to Interim Chairman, Tudor Davies. ”

 Frankly this is balls. An orderly transition would mean that the company would already have someone  appointed in  his place – not some interim manager who probably has been appointed at the last moment.

 I talked to him  briefly on his mobile when the company was having to raise extra finance – and it was quite clear from the conversation that he saw the company having a big future – once it had got rid of hotchpotch of manufacturing firms  it acquired in the 1980s and could expand by offering its services to other fire authorities and abroad.

More to the point he is  shrewd enough to quit before it goes bust. A check on the land register shows he has a large house in Barnes, south London which he and his partner Elizabeth Hackett-Brown bought for £1.425m in 2009 with a mortgage from HSBC. He won’t want as a director  to  put that at risk if the company goes bust.

 He also is the key man negotiating with the banks – so I just wonder how well the negotiations for extra cash are going.

I have a feeling that it won’t be long before  London Fire Brigade’s shiny engines will be in the hands of the administrators.

Assetco and MetPro: Stains on London’s political masters

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Coleman and Assetco: stain on London fire Brigade

Metpro-stain on Barnet Council

Politicians at the London Fire Brigade and Barnet Council should be hanging their heads in shame for awarding multi-million pound contracts to two private contractors, MetPro and Assetco – one of which is now bankrupt and the other only valued as junk  stock .

Both scandals have featured on this site before but the situation is going from bad to worse.

An extraordinary statement from Assetco -owner of London and Lincolnshire’s fire engines and a strike breaking auxiliary force for London’s firefighters – basically admits that it does not have the cash any more to meet capital repayments needed to run its contracts with London, Lincolnshire and the Middle East.See http://bit.ly/mP5WFa .

The key paragraph reads:  “The main issue that the business is facing is the capital repayment profile not matching the long-term nature of the Company’s contracts. Whilst the Company is cash generative and can meet its interest costs, it does not generate sufficient funds to meet all the repayment of capital as currently scheduled. The banks are supportive regarding the short-term financing situation and are awaiting our proposals on a financial restructuring but in the meantime we are in breach of our banking arrangements.”

This sorry state has been brought about by its former founder John Shannon who last month was summarily dismissed by the company.

Shannon had landed the company in court facing a winding up order for millions of pounds of unpaid taxes from Revenue and Customs-something they don’t do lightly- and a huge £1m unpaid legal bill from Nabarro’s.

No sooner had these been settled by diluting the share price in a £16m offer to new investors then more grief was to follow. The share price  is now down to a junk figure of 4.65p a share –  when it once sold at 66p. Market capitalisation at £11m is now less than the value of its PFI contracts in London and the Middle East.

Yet Shannon and his former co-founder are trying to recover £1.1m from the collapsing firm while facing a counter-claim from Assetco for £8m for ” breaches of fiduciary duties”. A bloody legal battle  is on the way distracting it from its business.

 All this might not matter if they did not own all the fire engines  in the capital and Lincolnshire. But the London Fire Brigade has reacted to the crisis with breath-taking complacency. Gareth Bacon, performance management chair, believes there is no serious problem.

 Brian Coleman, who was wined and dined by Shannon as well as receiving a gift of a £350 Harvey Nicks Christmas hamper, is silent about the fate of his dining companion.

Yet consider this.Would it be appropriate for a public body to avoid paying taxes and be so reckless with its finances so it can’t repay its capital loans to banks? And for the authority to be in a such a bad way that it has had to hire financial staff to sort out the mess. Heads would roll.

Barnet Council is in a similar mess over the bust private security firm MetPro who owed £250,000 to Revenue and Customs for unpaid tax, VAT and even pay roll tax deducted from its employees.

 The fate of this company would not have come to light if it had not been so reckless by filming bloggers and members of the public without their knowledge or permission as they came to watch the council implement cuts.

But now Barnet have admitted they were UNAWARE of the financial plight of the company which got £1m of business and glowing references from them on its website  (now finally removed) and appears to have avoided any public tendering process to get the business.

There is a link to both these scandals and he is called Brian Coleman. He has been the key advocate of the government’s privatisation agenda and cheerleader for the company -particularly the disgraced John Shannon. He is also the big wheel on Barnet Council- Cabinet post for the environment- and must have had some knowledge of the bankrupt MetPro. And there is even a bit part for the complacent Gareth Bacon in all this – his division at  Dutch consultants MartinWardAnderson has made £75,000  (£12,600 a month) over just a six month period in 2010 – providing temporary finance staff for Barnet.

Can anyone do anything about this? Yes- firefighters employed by the London Fire Brigade could ask for a due diligence investigation by the district auditor Michael Howarth-Maden over the handling of the PFI contract, alleging the authority had employed a company involved in proven tax avoidance

 Similarly residents of Barnet could demand an investigation by its external auditors,Grant Thornton into the hiring of MetPro. Here the crucial question should be -how they got the contract in the first place.

It is really time action was taken – the scandalous behaviour of both firms is a stain on London’s politicians.

Wake up Red Ed, Canny Cam is running rings round you

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raise your game, red ed.Pic courtesy Belfast Telegraph

 

If I were David Cameron I would be sorely tempted to start planning now for any early election. Friday’s election results were a dream ticket for the Tories. They must have thought they had woken up in paradise. They managed to rout their coalition partners, the Liberal Democrats, on their core issue, electoral reform and get the electorate to blame them for the coalition’s broken promises. They destroyed much of the Liberal Democrats core base in Tory heartlands.  They actually GAINED council seats and councils when they were  already by far the largest party in local government.

In Wales, – Labour did brilliantly in South Wales – but the Tories are now in second place , having regained Mid Wales to add to Pembrokeshire and North Wales.  The only thing that marred the party was Alex Salmond’s spectacular win in Scotland, but there they can take comfort to see Labour stalled ( Labour’s vote held up but they lost seats because people turned to the Nationalists and not them).

 Only in the North where Labour’s  stellar performance did a similar demolition job on the Liberal Democrats ( some of the swings in Newcastle at 22 per cent were equivalent to old style Lib Dem by-election gains) were the Tories not in the picture.

While Labour’s 800 gains look respectable effectively they piled up votes in Liverpool , York Humberside, the North East, and the East Midlands. The victories in the South, Gravesham and Ipswich, were isolated. They failed to get back Dover, lost seats to the Tories in Dartford and Hemel Hempstead and failed to make a serious impact in Watford, Thurrock and Harlow. Gloucester, a bell weather election seat, saw its council go Tory.

 If there was an election tomorrow  Ed Miliband would get the Labour vote up but in many cases it would just increase existing Labour majorities or take Lib Dem seats. And that will not be enough to win. The Tories with more Lib Dem seats to gain already have an advantage, let alone their simple but wrong narrative that the cuts are all the fault of Labour. So while Ed’s strategy to get back disillusioned Lib Dems has been a good start, it is only a start.

The party needs to do two things. Find out what the Tory’s new-found friends in the South and Midlands really want from government and the issues where the Tories are really vulnerable. Labour will not win by only talking to itself. Ask why there was success in Gravesham but not Dartford.

Labour need to up their game and go on the offensive. Polite pussy footing around and sympathy will not win elections. Unless they take the Tory narrative head on and work out an alternative and believable narrative of their own they will get nowhere.

If they don’t do this they will be written out of the  script. They needn’t just use conventional media – which is slowly dying – to get their message across, they have the whole internet at their disposal and it’s free.

So get your act together, Ed. A new nose job is not enough to get you through the door at Downing Street.

Dirty Tricks at the green ministry

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The true Conservative green logo: Replace the tree with a belching exhaust pipe.Pic:courtesy auto.howstuffworks.com

Six weeks ago I  had a particularly critical look at the antics used by David Cameron and Boris Johnson to delay tough new air pollution rules to avoid the Mayor having to pay out £300m in fines to the European Union. (see http://bit.ly/f2wB4j)

Now word via Whitehall has come to me  that a recent government initiative to curb ” red tape” to help business is about to be used as a further battering ram by the coalition to undermine  the so called commitment by both parties to a greener Britain.

My old Guardian colleague Allegra Stratton has already exposed the government’s move to incorporate all 278 environmental laws into the review (http://bit.ly/j6eVY6) . And it has  alarmed environmentalists.

Whitehall sources are telling me that the way civil servants in the Department of Environment, Food and Rural Affairs have been instructed to review the laws is extremely detrimental to green campaigners.

Effectively they have been told to concentrate on the BURDEN green legislation and regulations place on business and ignore the BENEFITS it brings to general health and well-being.

And this is from two ministries, business and energy and climate change , headed by two of  the Liberal Democrats in the Cabinet, Vince Cable and Chris Huhne.

Given the review cover issues like climate change, national parks, wild life protection, waste regulations, to name but a few areas, the only people  thrilled by this will be  libertarian think tanks like the Adam Smith Institute and the Tea Party faction of the Republican Party.

If we pursue this line of argument we would never have bothered with energy conservation, banned lead in petrol ( they  all cost money to business in the short-term) and been quite happy to keep landfill going and see animals and plants become extinct. Luckily some of this stuff – like phasing out landfill , clean beaches and air pollution, depend on  directives from the EU, so even the most brown nosed civil servant in Defra is going to have difficulty telling his political bosses it is OK to forget the benefit to the environment.

And the government seem to have forgotten that not all business will be pleased if it is successful. There are 880,000 jobs in the environment industry dependent on existing regulation.

 As Adrian Wilkes, chairman of the Environmental Industries Commission, points out: “This is a potentially major threat to the UK’s environmental industry, which lives and dies by the regulatory framework. Government intervention is a vital ingredient in the creation of the environmental markets of the future.”

So once again, just like the row over privatising the rest of the forests defeated by the campaigning group 38 degrees, the coalition has put its foot in it. Unless that is, they never really believed in the green agenda in the first place.