Select Committee on Standards and Privileges Second Report

Appendix C

Letter to Mr Alex Rowley, General Secretary, Scotland, from Mr David Pitt-Watson, Director of Finance, The Labour Party

I am writing to confirm our understanding of how we will finance the campaign for the Scottish Parliamentary Elections next year.

1.    The total cost of the campaign is estimated at £1,398,618 as shown in the attached budget (Appendix 1).

2.    The Scottish General Secretary can vary the type of spend within this total figure. This will give flexibility to change the way we fight the campaign. However, the total budget is fixed and, in consequence, any expenditure which is approved which is not budgeted for will need to be accompanied by a similar reduction in the budget for an approved category of spend.

3.    You will be responsible for a system of expenditure approval which will ensure that no expenditure is committed unless it has been properly authorised. In addition to the procedures discussed with Ann-Marie, I would strongly recommend you write to all major potential suppliers telling them who is authorised to commission work from them, and that we will not accept liability for any other expenditure.

4.    Any spending beyond £1,398,618 must be approved both by the Scottish General Secretary and the senior management team of the UK party.

5.    It is assumed that £42,000 of the campaign costs will be covered by assistance from MPs and MEPs. This leaves an outstanding cost of £1,356.618. In the event that these funds are not forthcoming, the costs will be shared on an equal basis between the Scottish and the UK party.

6.    This cost will be borne between Scotland and the UK party on an equal basis. This means that the UK party anticipate a transfer of £678,309 to support the Scottish campaign, £678,309 will be raised by the Scottish party.

7.    Clearly there may be some funds raised by the UK party as the result of the Scottish campaign. Where such earmarked fundraising does take place, we will discuss with you how it should be allocated between Scottish and the UK parties.

8.    In the event that the Scottish Party is successful in raising more than £678,309, half of the surplus will be applied to reducing the contribution from the UK party.

9.    In the event that the Scottish party is unsuccessful in raising £678,309, the UK party will pay for half the difference, and will loan the other half to the Scottish party. The Scottish party will not borrow monies from third parties.

10.  In the event that the final cost of this campaign is more or less than the budgeted figure of £1,356,618, the cost/benefit will be shared equally by the Scottish and UK parties.

11.  In the meantime, the Scottish party requires finance. I have created a schedule of the financial requirements of the Scottish party, based on the agreed budget. I have assumed that the Scottish party is solvent until the first of September, and have assumed that its fundraising from major donors, trade unions and sponsorship has the following pattern:

The schedule of cash required is shown as Appendix 2.

12.  Could you please review this schedule to ensure that this will adequately meet your cash flow needs.

I hope that this meets everyone`s requirements for the funding of the campaign, and am delighted at the co-operation we have enjoyed so far between Millbank and Kier Hardie House. I know, however, that finance is inevitably an area where disagreement can occur if the key players are not fully on board. For this reason I think it would be a good idea if all the key players were to sign this letter and return it, as a token of their agreement to these arrangements.

Agreed by UK General Secretary [Signed](Tom Sawyer)
Scottish General Secretary [Signed](Alex Rowley)
Leader of Campaign  [Signed](Helen Liddell MP)
Campaign Co-ordinator [Signed](Matthew Taylor)

13 August 1998

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