I don't know if I've managed to get this story into a single national paper, yet it seems to me to be one of the biggest scandals of the past year or two. The London Fire Brigade is placing its whole fleet of fire engines in jeopardy ny insisting on contracting them out to a firm which may well be wound up because of unpaid tax bills.
Here's an edited version of David Hencke's account - for the full version go to http://davidhencke.wordpress.com/2011/03/01/do-londoners-want-firefighting-on-the-whim-of-bankers-and-hampers-from-harvey-nicks/?utm_source=twitterfeed&utm_medium=twitter
April 20 will be a day of reckoning for AssetCo, the company that owns London’s and Lincolnshire’s fire engines and was used by the London Fire Brigade to try to break striking firefighters. It has until April 20 to answer in the Companies Court following a winding up petition from Revenue and Customs which could lead to the company and its subsidiaries being put into administration.
On that day it will have to answer a petition from Revenue and Customs to repay anything between £5m and £8m ( we don’t know exact sum – winding up petitions are secret documents) in overdue tax or go into administration. And a banker will move in to own London’s fire engines.
This scandal would have never seen the light of day if the directors of AssetCo, led by chief executiveJohn Shannon, had not been hoping to pull off a big coup and make a small fortune by allowing their company to be taken over in the wake of the publicity over the London fire dispute.
Whatever company examined their books – we don’t know the name – obviously did not like what it saw and suddenly talks were over and shares plummeted. They have not recovered and were trading at 17.5 p yesterday rather than 70p at their height. Within days the company admitted it had to repay some £50.6m of debt and find £8.5m working capital including plus a £3.5m urgent overdraft from the bank. Seven days later it announced that it wanted the same shareholders who had seen their investment plummet to give them another £8m.
It stated: “The Directors believe that with the cooperation of the Company’s creditors and banks, the current financial strain on the Company will be temporary, and the additional funding resources referred to above will ensure that a more appropriate capital structure will be in place to support the future growth of the business. “
What it did not tell anybody was that two days after the announcement it was in front of the Companies Court in The Strand in London pleading for a delay against a petition from Revenue and Customs to wind up some nine of its companies because of long overdue tax.
The London Fire Brigade officially appear unflustered. A spokesman said: “We plan for all events that could affect the fire and rescue service we provide and do not anticipate an impact on London’s fire engines.”
I understand London Fire Brigade are expecting if AssetCo goes belly up that a bank will take over ownership of London’s fire engines. Then either negotiations will start about the brigade taking back ownership of the engines or another bidder – and the rumour is it might be Babcock who already have firefighter training centres and run Firebuy’s emergency vehicles - could take over.
No wonder Matt Wrack, general secretary of the FBU, is demanding assurances from Bob Neill, the fire minister.
As he put it: “The safety of Londoners, and of London’s firefighters, is in the hands of a company which could be wound up in six weeks time because of tax debts. At the least, this will mean that there is no one to maintain London’s fire engines. At the worst, it could mean that London forfeits its fire engines to pay AssetCo’s debts."
Do we really want something as precious as saving lives dependent on whims of bankers and companies? The owners appear to have built up tax debts while their directors pay themselves huge salaries and get huge sums in dividends?
Londoner’s lives are more important than receiving a £350 Christmas hamper from Harvey Nicks (as Brian Coleman has) from grateful businessmen busy making profits out of public services.