I put this on twitter but it ought to be a blog post too, just without the GIFs, even though every GIF takes two years off your subjective age. (I’m following the science.) The Independent Group, aka Change UK, aka The Independent Group for Change, is winding up the private company it created as its organizational structure, and the final (and only!) annual report and accounts are wild.
The specific point is that the auditors qualified the accounts because TIG employees destroyed the organization’s bank statements, personnel files, and records of donors. The auditors say that “none of the destroyed documents could be satisfactorily reconstructed”, which implies the auditors tried to reconstruct them.
The sums are not trivial in the context of a tiny political party – in all, TIG collected £1.6m in donations in rather less than a year.
The Electoral Commission database accounts for £271,452 of the total, consisting of donations over and above the £7,500 annual reporting threshhold. We can definitely identify £125,000 in cash donations from three individual donors in the Electoral Commission return. However, the whole of the rest of the donations declared to the Commission came from PR company The & Partnership, a division of WPP Group, the advertising empire led until recently by the disgraced Sir Martin Sorrell. These donations were not in cash, but in kind, and I am not sure whether they would appear in TIG’s financial accounts. The & Partnership provided premises – presumably office space – to the value of £4,166 a month for much of 2019 and funded about £8k of hospitality, but most of all, it seems to have donated its own services. The Electoral Commission return shows an item for £125,620.00 of “Staff costs”, which is marked as “Non-Cash”. I think this means that it seconded some of its employees to TIG – it’s hard to see how it can have helped with staff costs in anything other than cash if it didn’t, and it seems to be a speciality of the Partnership’s.
Despite using The & Partnership’s staff and office space, TIG also spent quite a bit on staff itself. The accounts show a total of £259,876 in payroll, NI contributions, directors’ fees, redundancy payments, plus the employer contributions for one incurable optimist’s workplace pension. It also spent another £76,588 on office space directly. But by far the biggest expense line is advertising, as you’d expect from a political party fighting election campaigns. Of the £1.6m in cash that flowed into TIG, £780k, just under half, was spent on advertising. All of this is accounted for by the Electoral Commission; there seems to be a difference in how TIG’s accountant and the Commission categorise various advertising services, but it makes no odds.
Not surprisingly, TIG spent heavily on Facebook ads. In all, £215,964.19 was spent on Facebook, the second biggest spending item, in some 348 individual ad buys. Almost all of these were either exactly £500 or exactly £700, and they happened in daily waves, increasing in number as the election approached and peaking the day before the European parliamentary elections at £33,828 a day. Before this spending began, TIG spent £63,762 with a Canadian company called “Data Sciences, Inc” based in Montreal to set up its website, install a CRM system, train its users, and design their campaign strategy. Did someone just say Canadian data scientists?
They also spent £57,552.00 with InHouse Communications of Millbank to investigate their candidates’ backgrounds. But the single biggest spending line is The & Partnership, again, with a total of £227,821.08 recorded as outgoings. This included market research, producing their election broadcasts, generic “media”, “overheads and general management”, but most of all, “advertising”. This is interesting; TIG spent £227,821 with the & Partnership but received £146,452 back as in-kind donations, or to put it another way, it got the &’s services mostly at half price.
Beyond that, they spent £128k on direct mail with a company in Bolton and £96k with something called The Colour Company. The invoices provided to the Electoral Commission show that this consisted of T-shirts, banners, leaflets, and other merch, although it doesn’t say if TIG sent any back because they had a funny tinge. Presumably you hire the Colour Company to make sure they get the tinge just right.
In total, TIG ordered some 400 T-shirts, a touchingly realistic judgment of their real prospects, although one that leaves open the tantalizing possibility that there might be a trove somewhere for a themed party one day when we can look back on this with ironic laughter. Because that day will come. All we need to do is keep blogging.
There’s more to find out here. The Electoral Commission Web site doesn’t yet show spending for the cup final, the 2019 general election. Probably that will account for a lot more of the £1.6m income. Also, TIG has money left over – a bit more than £91k having paid all the bills. As a private company limited by guarantee without share capital, it has “guarantors” who stand a guarantee for a nominal amount of money, perhaps a quid each, rather than shareholders. It’s not allowed to pay a dividend as such, but as far as I can make out (I am not a lawyer) what happens to any residual surplus on winding up is left to its own articles of association. I’ve read them and they don’t make any provision for it having spare money.
But, you know, they shredded all the bank statements, personnel files, and the register of donors before the auditor showed up, like respectable people do.