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Council set for contract with company owned by Lord Ashcroft

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"Lord" Michael Ashcroft: donated millions to the Tory party.

Croydon Council, which spent £20 million last year on outside contractors and highly paid “interim” executives while cutting front-line services and axing hundreds of staff, is about to award a contract believed to be worth £750,000 of Council Tax-payers’ money to a company which is majority owned by Conservative party donor Lord Ashcroft.

Ashcroft is the former Tory party treasurer. It is understood that he also employed Gavin Barwell in the time before he became MP for Croydon Central,

Ashcroft, the ADT billionaire with massive property interests in the Caribbean, has never relinquished his “non-dom” income tax status, despite the then Conservative party leader William Hague pledging that he would do so on condition of his receiving his peerage in 2000.

And now, according to a report in the financial press, one of Ashcroft’s many business interests, Restore, is about to be awarded a valuable document scanning contract by Croydon Council.

This comes at a time when Croydon’s IT contracts with CapGemini and Northgate are being reviewed by the internal audit department.

Given Ashcroft’s reputed £10 million in donations to the Conservative party over the years, including a special fund to fight marginal seats at the last election – which may have included Croydon Central – it will be interesting to see whether the present government takes any steps over the former Tory party treasurer’s tax status, a long-term and on-going item of contention.

Only last month, in his Budget speech, the Chancellor, Gideon Osborne, described tax evasion (which is illegal) and what he called “aggressive tax avoidance” (legal with the right accountants, but very expensive), as “morally repugnant”. It is not known whether Osborne had the likes of Lord Ashcroft in mind when he said this.

Since then, the “Dinner for Donors” scandal has broken. Ashcroft’s name is on the Conservative party’s list of those who have had private meetings with the Prime Minister. Some diners paid up to £250,000 a time for the privilege. Lord Ashcroft and his wife Susan visited Chequers for lunch with “Call Me Dave” Cameron on June 10, 2010, barely a month after the general election.

It is unlikely that Ashcroft had a word in Cameron’s ear about juicy public contracts with Croydon at that time, although our council is beginning to develop a reputation for handing out public money or assets to businessmen who are well-placed with the Tories: for example, last year, Oval Primary School was peremptorily turned into an Academy, and ultimately handed over to ARK, an education organisation backed by investment banker and former Conservative party treasurer Lord Fink.

According to last week’s report in the financial pages, Restore is 51 per cent owned by Ashcroft. The share-tipping report (Ashcroft’s stock in this company has been rising lately, making him even richer) said: “The ubiquitous document storage, scanning and office relocation company which has been transformed from a basket case two years ago to a thriving company with a valuation of £60 million by former Warburg stockbroker Charles Skinner, reported a 77 per cent rise in pre-tax profits to £4.6 million on revenues 26 per cent higher at £34.8 million.

“Word is a £750,000 document scanning contract with Croydon Borough Council will be announced soon and others are in the pipeline. Shop broker Cenkos forecasts current year pre-tax profits of £7.7 million, rising to £9.3 million in 2013.”

Doubtless, picking up lucrative public service deals from local councils as they shed their full-time staff may be one of the benefits of a global recession for the likes of Ashcroft.

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