Exclusive: Westminster pioneers subsidised housing for higher rate taxpayers

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Affordable housing: Now for higher rate taxpayers Pic courtesy BBC

Are you a higher rate taxpayer with a family? Need a three bedroom home convenient for the City and West End but can’t afford the rent charged as oligarchs and Arabs push up prices in Central London?

From next year the Tory flagship council of Westminster is to come to your rescue- they are diverting all their  new  and acquired affordable housing provided by social landlords to help what Ed Miliband, the Labour leader called the “squeezed middle”. This  includes helping  Iain Duncan Smith style Tory households where dad is the sole breadwinner, mum stays at home with the kids, but dad earns enough to put him in the higher tax bracket.

Too bad if you are among the 53 per cent in Westminster earning around £12,500 a year. From next year you are officially too poor to qualify for social housing anymore. You will have to go and live somewhere else.

Don’t believe me. See the table in  new Westminster Council documents, where the figures are revealed.

Table 1: Affordable Rent levelsBeds Sustainable for households (without benefit) with gross incomes*:  Weekly GrossAR range  Current RP rents (including service charges) 
1 £25k-32k(net 18.5k-£23.5k) £135 – £172  £132
2 £27.5-£36k(net £20.5k -£26.6k) £148-£194  £147
3+ £29k-£39k(net £21.5-£29.k) £156-£210  £152+

The  gross householder income figure for three bedroom homes actually exceeds the present 40 per cent tax band which  this year  is £35,001.

Even the document produced by the council’s housing director for  Jonathan Glanz, the Tory Cabinet member in charge of housing admits they might be a problem:

 “It is acknowledged that these rents are not currently affordable to many households with priority, without housing benefit. Income analysis indicates that in the main their incomes are low and significant proportions are benefit dependant.”

An accompanying document adds: “For some larger non working households, Affordable Rent may not be a sustainable housing option given what is currently known about the welfare benefit cap.” In other words The Conservative policy to cap benefits puts the unemployed permanently in the cold.

Even Westminster cannot stomach Grant Shapps 80 per cent market guideline Pic courtesy: Daily Mirror

What is even more amazing is that Westminster is  trying to implement  housing minister Grant Shapps’ plan to make sure housing association charged 80 per cent of market rents. The problem is that market rents are so high in Westminster, that even the Tory flagship authority is having to ignore  the Shapps guidelines. An accompanying document reveals average market rent for a two bed property is now  £564 per week in W1, £440 in the SW1  and £316 in NW8.

Even Westminster realises that to charge over  between £250 and £400 a week would hand over its entire social housing provision to higher rate taxpayers. Good policy for ” we are all in it together” from Mr Shapps. And Westminster’s market rents are lower than neighbouring Kensington and Chelsea and the City of London. Can’t wait for their housing proposals following Mr Shapps lead.

Not surprisingly Labour councillors in Westminster are pretty scathing about this.

Councillor Guthrie McKie, Labour’s Housing Spokesperson said;  “The Council is shifting its housing failures on to the most vulnerable people in our community. Due to its failure to provide sufficient social housing, the Council is doctoring its allocation policy…The Council is hell-bent on turning Westminster into a ‘no go’ area for the poor and low-income families.  These new policies will just add more misery to the lives of thousands of our residents.”

Mr Glanz disagrees: “This attack fails to understand the concept of the new affordable rent model and preys on fears of some of the most vulnerable people. Affordable rent is not a replacement for social housing. It is an entirely separate product for households that are in employment but would otherwise struggle to afford housing at market rents. ”

However this is only half the story. What was Westminster plans to do with its existing council housing is a matter for a further comment.

Exclusive: London fire company former bosses investigated as shares suspended

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John Shannon , ex ceo, high flying and an alleged trail of AssetCo debts

Update: Judges are expected to approve tomorrow( wed july 28)) a deal allowing to dilute shares by 1000 per cent, raise fresh cash from foreign investors and pay off creditors so the company can save its Middle East operations and plan to sell off its London and Lincolnshire fire brigade contracts. Advisers, the current chairman,Tudor Davies, will also get big success fees for pulling this off.

Update:  Trade creditors- from American Express to Grant Thornton – today (Thursday) accepted a 23p in the pound settlement for over £1.5m owed -writing off over £1m debts and AssetCo subsidiaries -including London- accepted a  peanuts settlement (0.1p in £) for the £100m owed -paving the way for first step to save firm from total collapse but also pointing to sale of London and Lincolnshire fire contracts.

An investigation into the  financial dealings of  former bosses  of AssetCo, the private owner of London and Lincolnshire’s fire engines, is underway by the firm, shareholders have been told.

A statement from the company says: “”The Company has recently received details of allegations in respect of the activities of its former management team. The Company is investigating these
claims and following the completion of its investigation may initiate proceedings.”

The disclosures come as shares have been suspended after  the company sought yet another £14m from investors and massively diluted  junk status share price, last traded at a mere 1.75p. The move comes as Bob Neill, the fire minister, will be urging fire authorities across England to privatise their services and hand over their equipment , training and vehicles to  any private company that wants to make a profit from them.

Arcapita, the only bidder for the stricken company, walked after demanding auditors crawl over AssetCo’s accounts before it would talk any further about a take over. A statement was issued today saying it was not proceeding with the take over.

Worse, documents released to creditors reveal  up to £5m of unpaid bills – including unpaid debts for corporate entertaining at sports fixtures ( £31,000 )and the use of  private jets (£7000). The company blamed its former management and senior staff for leaving this trail of bills for high living, running up an unpaid card credit bill to American Express totalling £134,000.

Now one of the creditors, Bookajet, has told this website that it was left with unpaid bill of £7000 for a hired jet from John Shannon, the former chief executive, after AssetCo refused to pay it. According to a spokesman Mr Shannon appeared to have taken the jet for a personal trip and not on company business. AssetCo are not commenting about this but it looks like Mr Shannon is contesting it.

Bookajet say they have contacted debt recovery lawyers with the aim of seizing AssetCo’s assets.

A taxpayer owned Lloyds Bank fire engine

It has also been revealed by AssetCo and the London Fire Authority that all the capital’s fire engines have never been owned by either of them – they are the property of state-owned Lloyds banking group- owners of the Halifax and Bank of Scotland. The new difference is that Lloyds along with other London banks is now a creditor as well as an owner. There are massive unpaid loans  now totalling  some £30m since AssetCo was launched.

So firefighters are combating riots and blazes in vehicles courtesy of Lloyds Bank ,giving a new  meaning to the Black Horse’s advertising slogan ” for the Journey.” Lloyds are now both the owner and creditor to AssetCo London and promise not to auction them off to get their money back. London Fire Brigade issued a  statement assuring their fire engines are safe.

Two highly embarrassing documents  (see http://bit.ly/px5djv )have been sent to shareholders and creditors revealing the dire state of the company – and pleading with shareholders to accept a massive dilution in shares and creditors accepting less than a quarter of the money they are owed. Banks are being asked to reschedule debts.

Over £100m is owed by AssetCo to its subsidiaries,there are £17m in contingent liabilities to Lloyds, Barclays, Lombard and the Co-operative banks.

Grant Thornton, their auditors – the same company that missed the MetPro security company scandal in auditing Barnet Council’s accounts – are owed £267,000. EDF owed £18,000 in unpaid electricity bills, and even McGrigors, their solicitors based at the Old Bailey who are hosting creditors’ meeting for them, are owed £52,000. The Retained Firefighters Union, is also owed £12,000.

Even  the pension scheme for London staff is at risk if it is not bailed out – the company admit taxpayers will have  to pay out 90 per cent of the cost if it collapses.

Assuming the company is saved, the scandal is not yet over. Further litigation between the firm and John Shannon  over money  will come to court on December 5 as he likely to contest allegations of misusing AssetCo’s cash. Both Lincolnshire and London fire engine contracts are likely to be put up for sale. Only the interest in Abu Dhabi, where the firm works for the military, are likely to be saved.

London AssetCo will only be able eliminate £20m of its debts and be sold off with £30.6m debts. with Lloyds holding on to the fire engines. Lincolnshire has debts of £12m.

Anyone for privatisation after this debacle? Over to you. Mr Neill.

Lansley’s unhealthy double whammy: What you won’t know or find out about the NHS

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Andrew Lansley's unhealthy changes. Pic courtesy:www.bexleymonitoringgroup.co.uk

Update:Department of Health has replied to this blog defending their position on Freedom of Information and cutting statistics – see comments.

While battle rages over the government’s  controversial reforms of the NHS, the Department of Health has sneaked out two toxic  changes that could  seriously damage your health by promoting ignorance and restricting your rights as a citizen.

The two changes appear to be unconnected  but are extremely helpful to new private providers of  NHS medical services. One will limit information the private firms  have to provide under the Freedom of Information Act to patients and relatives, the other will help them by abolishing the collection of health statistics on the services they provide and  the quality of  staff they employ.

The first has been revealed by the authoritative Campaign for Freedom of Information who are rightly demanding that Andrew Lansley, the health secretary, amends the law so patients can be protected. See their letter at   http://bit.ly/q35AsQ .                   .

This is incredibly serious as this example  by their director Maurice Frankel  shows here.

“Suppose there is concern about the use of potentially contaminated medical supplies by hospitals. For an NHS hospital, the FOI Act could be used to obtain details of stocks of the product, the number of doses administered, the numbers of affected patients, the quality control measures in place, correspondence with suppliers, minutes of meetings at which the problem was discussed and information showing what measures were considered, what action was taken, how promptly and with what results.
This level of information would clearly not be available in relation to independent providers treating NHS patients. This would represent a major loss of existing information rights.”

The second comes from a very convoluted consultation exercise launched the day after the August bank holiday and trumpeted by Anne Milton, the public health minister, as a drive against ” red tape”.

This proposes to slash the collection of statistics by the Department of Health by 25 per cent in a rather uneven and unclear way. But it is clear that the aim is to ” minimise the burden” on the NHS and in particular the new private providers.

Half the statistics collected on the NHS workforce – which are used to improve staff training and forecast the need for skilled staff – are to be dropped. The consultation document says: “This will be of significance for non-NHS providers of NHS services as it will determine the minimum workforce information they would be required to provide.”

And also being reduced are the statistics on the very sensitive political area of waiting times, targets for treatments and capacity of hospitals. The paper says: “the content and frequency.. should remain under review so that the right information is provided by the NHS at a sensible frequency and in so doing the burden to the NHS is minimised.”

Collection of  statistics giving the national picture on mental health are being abolished and the collection of statistics on patient safety look like being hived off to a private firm.

The one area that is being improved is cancer statistic collection which seems to be tied to a pledge by David Cameron.

What is particularly disturbing is that despite the document running to 55 pages at no point is a definitive list published of what is being scrapped. See document if you can bear to here:http://bit.ly/npcHmC .

Frankly Andrew Lansley should not be allowed to get away with either of these moves. The Department needs to change its position on the former and come clean on the latter. I suggest that you make your views known to Mr Lansley at his private office at the Department of Health the email address is  mb-sofs@dh.gsi.gov.uk. If  Zetter’s Parliamentary Companion is right his direct e-mail at andrew.lansley@dh.gsi.gov.uk.

Judge aids rescue package for ” bust ” privatised London fire firm

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Mr Justic Floyd-Helpful to AssetCo Pic courtesy:thisislondon.com

A High Court judge came to the potential rescue of AssetCo, the near insolvent owner of London and Lincolnshire’s fire engines, by granting the company  another month to negotiate an extraordinary deal with its  creditors to wipe out debts of over £100m.

Mr Justice Floyd, sitting  at the Royal Courts of Justice in London, granted applications to adjourn  moves until September 28  to wind up the firm in favour of allowing  the company to open negotiations with its creditors on a deal that will recover some of their lost investments.

Mr Lloyd Tamlyn, for AssetCo, explained that if the company went bust now, the banks and other investors would be lucky to get 0.5 per cent of their money back. But if they agreed to negotiate with the company on a deal they could walk away with 23.5 per cent. In return they would have drop any further demands for cash, wiping out the £100m plus owed by the firm.

 In effect investors in AssetCo look set to lose some £77m. Since the judge was aware that this case was being reported, AssetCo were careful not to ( as at other hearings) list who is owed what.

But from the previous hearing ( where the registrar was not aware he was being reported) the creditors named included  state-owned Halifax Bank of Scotland which is owed £12m and energy company, EDF, which suggests AssetCo may not have paid fuel bills for premises they run in London. Others include FD Direct, the Inland Revenue. They will still be big losers.

The difference the deal would make is shown by Northern Bank who are owed £1.3m and have been very active in opposing moves by AssetCo to give preferential pay outs to its lawyers and accountants.

Adam Goodison, for Northern Bank,  who had pressed for the company to be wound up, explained to the court why the firm is now ” content”  for the deal to go ahead. This followed negotiations that changed the creditor status of Northern Bank, so it could benefit from the proposed pay out.

If AssetCo went bust the bank would be lucky to get £10,000 back from the £1.3m they put into the company. Under the revised deal the bank would get back nearer £300,000. The same would apply to other creditors.

 The question – dealt in passing during the hearing – is where has AssetCo got the cash to even finance this deal? It appears to have come from money raised from international financiers who have given another £10m cash to the company on top of money raised earlier this year which severely diluted its share price to near junk status.

At the last court hearing the financiers were named as North Atlantic Value LLP, a part of the J O Hambro Capital Management Group, Utilico Investments Limited and Henderson, which incorporates the interests of Gartmore Investments Limited.

A hint came from Northern Bank’s lawyer after the hearing when he told me that the deal could be “good news” because it could rescue the company and remove most of its debts. He thought investors were ” taking a punt” on the firm’s future.

The majority of the investors will still have to agree before the deal can go ahead and it will need final approval of the court on September 28 – but the judge’s move means that it could get Brian Coleman, Tory chair of the London Fire Brigade, off the hook from seeing London’s fire engines owned by administrators.

 Once the debt is cleared it then makes the company more attractive to a take over. Nothing more was said in court about a bidder – known to be Arcapita Bank in Bahrain – which suggests they have gone cold on the idea.

The situation is far from satisfactory and does not rule out a slow death of the company,reflected in its low  2.2p share price, valuing it at £5.52m today.

FBU general secretary Matt Wrack said: “Privatising emergency services is stupid and dangerous. The long, slow death of AssetCo is a perfect illustration of this.  We still do not know what is going to happen to London and Lincolnshire’s fire engines.  They are, we believe, going to be the property of AssetCo’s creditors when AssetCo finally goes under.  I call on the London Fire Brigade and the government to bring the fleet and their maintenance back into public ownership.”

This blog was trying to contact Tudor Davies, head of AssetCo, for a comment.

Update: Near bust AssetCo to try and stave off insolvency again

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AssetCo, the troubled owner of London and Lincolnshire’s fire engines and military contracts in the Middle East, will make a desperate attempt to stave off bankruptcy at a hearing at the High Court tomorrow (thursday).

The near bust firm will be up before Mr Justice Peter Smith in Court 61 in the Chancery Division of the High Court in the Strand pressing for yet another adjournment as it fails to clinch a take over deal with Arcapita, the Bahrain based company. The court hearing begins at 10.30 am ,though AssetCo is at the bottom of the list, and the case may not be heard until later in the day.

In another desperate move the firm will produce at the court draft  documents to be presented to its many creditors in the hope they may stave off the evil day when it will have to cease trading. Details of the documents have not been published but a majority of creditors will have to agree before the company can be saved. The last time the company appeared before the court it said it could go bust owing £140m to banks,electricity companies and suppliers.

Will the judge still be sympathetic to this ill-fated example of privatisation? We will have to wait events.

Smart riots need smart solutions

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Rioter in London: Pic courtesy: Daily Mail

Are we going to fall into a simplistic trap over the riots that gripped London and England this week? So far much debate on the causes, much discussion on bringing the people who did this to book, and a sort of numbness over the horrific and frightening scale of it. But what is the long-term solution and how should we deal with the smart phone savvy generation that perpetuated it?

Up to now the debate has concentrated on making sure the people are punished – from ludicrous calls from one Tory MEP to shoot the rioters on the spot to making sure we fill our overfull prisons and detention centres with every single person who was on the streets. As David Cameron said today: “We will track you down, we will find you, we will charge you, we will punish you. You will pay for what you have done. ”

What of the cost to us the taxpayer of all this. Higher insurance premiums (a £200m pay out is on the way) or taxes running to hundreds of millions to pay for the damage to buildings is now to be followed by a huge bill  for legal costs, extra policing, and jailing the offenders. Remember the cost of  jailing each offender will be more expensive than the daily bill for educating David Cameron and Boris Johnson at Eton. And given the depressing picture of conditions at Wandsworth prison published this week by the Chief Inspector of Prisons,(see http://bit.ly/oEcESH ) much good may it do us.

It is likely that when the rioters emerge from these detention centres and prisons they be more savvy in avoiding detection, have lucrative drug dealing contracts, and learnt from hardened crims new ways to commit burglaries.

Looters in action in London. Pic courtesy ibtimes.com

So what is to be done? I have one suggestion – when people are convicted of damaging a police vehicle, fire engine, a shop and a home, or stealing goods they  should be presented with the bill and ordered to make a contribution to compensate the victim or the service.

Instead of going to prison they will bound over  by the courts to pay back money to victim or store – and  this will be enforced by either direct deductions from their wages or benefits or even from their credit cards if they have any, over a five, and in bad cases, a ten-year period. This would not apply if they had killed or seriously injured anyone where they would go to jail.

In case anyone thinks this is a ” bleeding heart ” soft option I would propose  very tough enforcement to back this up. If they fail to do this they will face – like a suspended sentence – going to jail for the full period of their repayment term, which would be much longer than a normal jail sentence for burglary or criminal damage. This would act as a strong deterrent but fewer people might want to risk going to jail.

Second there is a need to reconnect the alienated rioter with mainstream society. I suggest this is done by making him or her meet the victim, whether a small shopkeeper, the local fire or police station, or the local manager of  the wrecked Tesco’s, Carphone Warehouse or Barclays Bank. Then they might see this is not a victimless crime and that the people who work and live there are human beings with human feelings and their lives are blighted by such actions. The rioters may also want to see where the money is going and could mitigate the bill if they returned some of the stolen goods.

There needs to be a conversation between the community and the rioters not  separate anger among communities and young people themselves about what has happened.

How this can be organised  at a  time of huge spending cuts I do not know particularly when even some of the magistrates courts handling the emergency – such as Westminster – are about to be closed down, but organised it must be.

 Political leaders at Westminster and in town halls across England need to take the lead. Organisations like Victim Support and the probation service, must be able to play a role. There should be a simple way to set up an organisation that could pull this together. Any ideas?

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Why Britain’s youth should be seen and not heard: the patronising view of a London Assembly Tory

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Gareth Bacon: A man who thinks young people should not question him.Pic courtesy: London fire brigade

An extraordinary e-mail exchange has taken place between Gareth Bacon, Tory London Assembly member, and Danny Hackett a 17-year-old Bexley constituent and a Labour activist.

Danny Hackett challenged Gareth Bacon why he has needed to claim up to £2000 a year to get free travel in London when he earned in excess of £150,000 a year – half of it from allowances as a London Assembly and Bexley councillor. Using material from this website he asked him to justify the claim. “A majority of people who live in London pay for travel themselves you should do the same,” he said.

Back came the reply addressed to, believe it or not, ” Master Hackett,” because as Mr Bacon explained later:”I addressed you as “Master” Hackett because that is the correct title for you – you are, after all, a minor. ”

 He went on to explain he was claiming it because he had to pay far too much tax and that  “means that more than half of  it does not reach me, indeed in effect it never leaves the Treasury and exists only on paper.”

Danny Hackett doing something that Mr Bacon would disapprove: Pic courtesy Danny Hackett

Mr Hackett found being addressed as Master ” patronising, rude and offensive” which really set Mr Bacon going and revealed his true feelings about the country’s youth.

“I suspect you have little or no experience of living apart from your parents, university, working for a living, supporting yourself, paying tax, having meaningful relationships, or raising a family. You have little or no practical experience of politics and no experience at all of public life.

“None of these things are faults in you, they are simply factors of your age. .. to be completely honest and fair with you, my advice would be to experience a little bit of life for yourself before you start criticising other people and preaching to them about how they should live theirs.”

However Mr Bacon has offered the youth a chance to vote ( he appears not to want to ban some teenagers from voting on the grounds they are too inexperienced) if he is 18 on May 3 when he stands again for the London Assembly- an invitation which should be taken up more widely.

“You will be able to exercise your prerogative at the ballot box and vote against me – be aware though, that holds no fears whatever for me, as a democratically elected politician.”

 I might suggest that lots of young people take up his offer and see whether he has any fears then.

 Neither Mr Hackett nor me are allowed to communicate with him. “I have nothing further to say to you” he has told Mr Hackett and he has told me when I raised  it with him : “I have nothing remotely to say to you.”

Believe it or not Mr Bacon is a youngish new generation Tory ( he had to tell Mr Hackett he was not an elderly gentleman) with I am afraid a mental age of nearer 139 than his actual 39. I imagine he would very much at home in Victorian England dragging naughty boys to his study to tell them off for daring to question his authority.

But we are in the 21st century and we live in an open society. So what do you think? E-mail Mr Bacon at his public work e-mail address gareth.bacon@london.gov.uk  if you disagree or back him.Email Danny at danny@hackett.org.uk  Tweet @dannyhackett if you agree or disagree with him.

If you want to see what Mr Bacon earns, where he works, as his strong views against trade unions and demonstrators, it is all on my website at http://t.co/0mKytVV. Health warning: Mr Bacon who doesn’t speak to me claims it is ” poorly researched.” Judge for yourself.

 

 

Morecambe Bay Cockle Pickers: Does the government want it to happen again?

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The cockle picker victims of Morecambe Bay: Will cuts mean more to come? Pic courtesy bbc

Remember the tragedy at Morecambe Bay which led to the deaths of at least 21 cockle pickers? The public outcry that followed the exploitation of these Chinese workers led to the setting up of the Gangmasters Licensing Authority to protect migrant and other workers from future exploitation.

Since then it  has been very successful in both licensing gangmasters and working together to fight exploitation with other agencies like the UK Border Agency,the Serious Organised Crime Agency, the police and Revenue and Customs. 

A key test case will take place this autumn with the prosecution of  an Oxfordshire dairy farmer, and potentially 18 other farmers, for using unlicensed labour on their dairy farms. Other cases included investigations into shellfish farmers in County Antrim and a successful opposition to a licence being sought through a Facebook friend of a banned gangmaster who exploited Lithuanian workers.

In the last year its inspectors identified 845 workers who had been exploited to the tune of £2.5m, revoked 33 licences, and prosecuted 12 firms. Some 91 per cent of operations identified serious exploitation. Employers who appeal against its decisions have only a 5 per cent chance of success, 95 per cent of appeals are rejected.

Now any further success is being threatened by a triple whammy from the government. The latest annual report ( http://bit.ly/qp7yeo) reveals that in the last year the government is putting their effectiveness at risk.

Eric Pickles abolished funding for gangmaster intelligence

The biggest blow has come from none other than Eric Pickles, the communities secretary. His department abolished funding altogether to the agency from April. This funded work enabled the agency to set up intelligence operations with local councils and funded community enforcement officers. These posts have now gone.

 Then Caroline Spelman, the environment secretary, cut funding by five per cent and Francis Maude, the Cabinet Office minister, imposed a Whitehall recruiting freeze which has mean that skilled people have not been replaced.

At the same time the agency which relies on licence fees for the vast majority of its income has been told to freeze fees for two years, presumably to save business money.It is no wonder the agency’s annual report says: ” The authority faces a major challenge in seeking to prevent the exploitation of vulnerable workers with the prospect of fewer resources.” It also gives a lie to the government’s claim that cutting back office staff won’t have any effect. It admits that these cutbacks” may have an adverse impact on the ability to control risk in the future”.

 Under government spending cuts it will be cut again over the next three years as the Department for Environment, Food and Rural Affairs  reduces its budget by eight per cent a year. Given it runs on a shoestring budget in Whitehall terms of under £5m a year and employs 89 staff, it seems remarkable value for money.

It would be a serious tragedy if penny-pinching by the government gave the green light to new exploiters to take advantage. If it does at least transparency makes it clear which minister to blame.

AssetCo buys a month’s grace as investors asked again to bail it out

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AssetCo, the troubled company which owns London and Lincolnshire’s  fire engines, and is £140m in debt, has managed to negotiate a further lifeline from its investors.

 The company which faced being wound up today (July 25) at a High Court hearing in London has gained another month’s grace until August 25 to conclude the deal.

A statement from the company said:””the Board of AssetCo has been in discussions with certain of its major stakeholders (being North Atlantic Value LLP, a part of the J O Hambro Capital Management Group, Utilico Investments Limited and Henderson, which incorporates the interests of Gartmore Investments Limited), ” for further refinancing of aanother £10m.

The price to be paid will be another dilution of the shares – worth just 1p before the deal and 2.50p – after the deal became public, and banks and other creditors will not get all their money back either.

The statement continued:”The strategy will focus  on developing the Middle-East business into a leading emergency services platform and on running the London and Lincoln contracts.  The refinancing proposal to be approved by shareholders will involve the ring-fencing of the LFEPA (london fire brigade)for the benefit of the London subsidiary lender group, although shareholders will retain an interest in any residual value. The Investor Group intends that following this fundraising, the Company will continue to be listed on AIM.”

 The company also said that talks were an advanced stage with a bidder-assumed to Arcapita, the Bahrain based private bank (see previous post), but significantly Arcapita has not signed the deal.

  At Monday’s hearing  the court was told  professional fees for lawyers and financial advisers amd the directors are costing £100,000 a week.

 Mr Justice Floyd warned that if the new private-sector bid failed, it could leave AssetCo with “nothing left in the kitty “.

 “If it is not successful then the assets of the company would look to be depleted by the professional fees being charged to the point where there will be nothing left in the kitty to reimburse creditors of any description “ he said.

  Professional costs to cover just a fortnight’s work restructuring and refinancing the company in the run up to a new bid were detailed in court.  AssetCo directors Tudor Davies and Tim Barrett would charge £40,000 plus VAT, solicitors £112.824 plus VAT and financial advisors would be invoicing for £50,000 plus £5,000.  

  The scale of debt-laden AssetCo’s financial meltdown was disclosed in court – £2.2M at the end of June had shrunk to just £700,020

     Creditors supporting the company’s call for the wind-up order to be adjourned included North Atlantic Value, owed £15.9M by AssetCo. The company, part of the J O Hambro Capital Management Group, which is proposing to contribute to anothedr £10m refinancing deal.. 

   Matt Wrack, general secretary of the Fire Brigades Union said : “ These assets should be brought back into public ownership. At the court today, we heard lawyers haggling over remuneration fees ASSETCO – costs soar as “new bid” staves off wind up – but still no assurances for Londoners.  

 PrIvatising essential services in crazy, as the AssetCo debacle continues to show. Fire engines in London and Lincolnshire should be brought back into public ownership as soon as possible.”

Exclusive:Are London’s fire engines to be owned by a firm whose advisers advocate jihad?

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Arcapita's swish Bahrain hq: Picture courtesy:http://thebigprojectme

Just when the appalling story of the near bankrupt company,AssetCo, which owns London and Lincolnshire’s fire engines, nears its conclusion,  there is a new and extraordinary twist to the tale.

AssetCo in desperation to stave off bankruptcy on Monday is negotiating a take over with Arcapita Bank, a Bahrain based but Arab and Indonesian privately owned company. This firm because it is owned by Saudis is governed by Shariah law and any transaction must be approved by a special committee of  Sharia advisers.

 Now an investigation by me has come across extraordinary information about their advisers and their views and connections with militant Islam. Enough for me to contact the company in Bahrain and ask for an explanation. Which is more than Brian Coleman, chair of the London fire brigade and Bob Neill, the fire minister, can do- because they have rendered themselves  powerless to do anything  under the terms of the contracts in selling off the fire engines and recruiting auxilliary staff to AssetCo in the first place.

Here are the details and the company’s response. They are three allegations, that they employed an adviser considered so dangerous by the government that he is banned from entering Britain; that they currently employ an adviser who advocates aggressive military jihad and there were involved in a big controversy in the United States over allegations that  their top man had secretly funded Osama Bin Laden.

The first case involves  Yusuf Al-Qaradawi , a man banned from entering Britain since 2008, after advocating the abduction and killing of US soldiers in Iraq and the killing of Israeli citizens. On other matters he is  tolerant, including allowing Muslims to consume a very limited amount of alcohol . He condones wife-beating as a last resort so long as it done lightly and thinks homosexual acts should be punished by the death penalty. He was chairman of  Arcapita Shariah Advisory Board.Ironically he came to Britain in 2004 and Ken Livingstone, the Labour mayorial candidate who approved the original AssetCo contract, shared a platform at City Hall which was condemned by Bob Neill, then a London Assembly member.

The company confirm his former employment: A spokesman said: ” He was an adviser only on aspects of shari’ah law and our relationship with him ended inFebruary 2002. ”

But since he has left he was had been replaced by another adviser Muhammad Taqi Usmani , a senior Pakistan Muslim scholar, and former judge who has recently advocated ” aggressive military jihad.” According to an article in The Times see http://thetim.es/pcASva– he believes Muslims should live peaceably in Britain,”  only until they gain enough power to engage in battle”. He has since corrected this impression suggesting a more ambivalent attitude to jihad.

He also as a former Pakistani sharia judge argued against the women’s protection law which made rape a criminal offence.

The company said ” We believe the report to be a mistranslation of what he actually said. He did not advocate aggressive military jihad.”

The final area involves a row in the US when Arcapita took over Cypress Communications – a company which manufactured a state of the art computer security kit. There was an allegation that the chairman of Arcapita,Mohammed Abdulaziz Aljomaih – was discovered on the ‘Golden Chain’ list of Bin Laden supporters and financiers which was seized in 2002 during an anti-terror raid in Bosnia.

There followed an inquiry by the Committee for Foreign Investment in the US  on whether the company -like the take-over of  US ports by a Dubai firm- and it ended with the company being allowed to run the company but not allowing non US national access to sensitive computer software. See:http://www.nationalcorruptionindex.org/pages/profile.php?profile_id=325

The company’s response is: “This claim was thoroughly investigated by the US authorities at the time and they found that Al Jomaih, chairman of Arcapita, was not the same person named in the list. Restrictions on non US citizens  were applied at the time, like any other foreign company buying a US company in a sensitive area , but these have since been lifted.”

The only person so far to raise this issue of Arcapita has been Matt Wrack, general secretary of the Fire Brigades Union. In a letter to Bob Neill he says: ” I am sure you will appreciate the importance of this at a time when we are still considering the outcome of the inquest into the 7/7 terror attacks.

“The simple truth is that this privatization has been a complete and utter disaster for all concerned. The complacency and lack of foresight of those responsible is an utter scandal as is the continuing attempt to pretend there is nothing wrong”.

My conclusion is that the arrangements which could lead to Arcapita taking over London’s fire brigade prove there is a major flaw in the government’s privatisation agenda .

If a firm that cannot be vetted can take over such a sensitive area- particularly as London Fire Brigade plays a major role in protecting the capital for future terrorist attacks, there is something seriously wrong.

 I cannot prove that Arcapita is not a fit and proper company to run the operational side of the London fire Brigade ( they own other less sensitive things like Freightliner and Viridian, N Ireland’s electricity). They also point out that their advisers are not employees of the company and they do not have any say in the operation of the company. Nor having just done a blog about the media misrepresenting Muslims, do I want to create scare stories.

But as a citizen I would want my elected representatives to guarantee that in such a sensitive area, they are safe to do so, and there is no hidden agenda behind this take over.

Anything less would be grossly irresponsible and playing with the lives of everybody who lives in London- whether they be Muslim, Jew, Atheist, Christian or whatever. I hope Mr Neill and Mr Coleman are listening.