A damning report by the London Assembly’s economy, culture and sport committee on the creation of a new private company, London & Partners, to take over Visit London’s responsibilities for tourist promotion reveals that the Mayor embarked on the plan without assessing the risks properly. As a result, he drove Visit London into bankruptcy, put at risk the pensions of over 200 people and left the body facing £2.5 million in demands from angry creditors.
The trigger for bankruptcy was an assumption by the mayor that the new company would take over responsibility for pensions to 177 people and 39 staff by joining the British Tourist Board pension scheme. But he had no power to order the trustees to do so and the company refused – leaving Visit London with a £2.2 million bill it could not meet.
The London Assembly report criticises the process by which London & Partners was set up, saying it was “not informed by a sufficiently detailed assessment of the financial and reputational risks associated with the Visit London pension scheme”.
It continues: “The assumption within the GLA between November 2010 and March 2011 that London & Partners would become a participating employer in the British Tourist Board pension scheme, without some form of GLA funding, was not a reasonable one.”
Correspondence between the GLA and London & Partners reveals there were no face-to-face meetings and misunderstandings between the company and the GLA on what had been agreed.
Only the intervention of the Pension Regulator – who threatened an investigation into the bankruptcy of Visit London – brought the sides together, with the mayor agreeing to a £5 million bailout to protect pensioners and creditors.
The report also reveals that Mr Johnson has ignored a Conservative pledge on transparency by setting up a company which does not publish senior salaries or have to account for £16 million this year from the taxpayer. It wants transparency and a spokesperson for the Mayor’s office said he would respond to this in October.
Len Duvall, leader of the Labour group, said: “I hope the Mayor will reflect on these mistakes and provide the Assembly with further details of the absurd and wasteful situation of London taxpayers paying twice over as London & Partners scramble to buy up the assets that have been frozen by Visit London’s administrators.”
A spokesperson for MR Johnson said: “The Mayor has had to balance the interests of these groups with his fiduciary duties and strong commitment to the taxpayers of London to get value for money. We have done exactly that.”
