Cash crisis hits Tory election hopes

Plan to sack up to a quarter of Central Office staff as growing deficit raises fears that banks may not extend credit for campaign

The Conservative Party is considering urgent plans to sack up to a quarter of its headquarters staff to prevent one of its worst mid-term financial crises threatening its capacity to fight the next general election.

Around 40 of the 160 staff at Conservative Central Office are threatened under plans already approved in principle by the party's management board in the expectation that there will be no dramatic turn-round in the remaining two months of the financial year.

The party could face an operating deficit in the financial year 1994/95, only a year after Sir Norman Fowler, the former chairman, was able to record an operating surplus of £2.1m for the first time in several years. A deficit would mean a further increase in the party's £16.5m overdraft.

But even if the party breaks even as a result of donations during the next two months, the cuts look increasingly inevitable because of the £1m-plus annual cost of servicing the overdraft and the fear that banks may not be prepared to extend credit for the general election unless the party manages to make deep cuts in its debt before then.

According to some internal estimates, while income is currently only running at around £10m a year, the party needs some £30m in donations over the next two years to be fully equipped for the general election. And even then it is unsure of being able to find the £11m that it spent on the 1992 general election. Among the possible targets for cutbacks - which would save around £1.5m- are some of the functions of the constituency services section, whose responsibilities include back-up for the Young Conservatives, Conservative Women, the trade union section, the multi-ethnic one nation forum and the running of the party-owned printing works in Reading.

The possibility of "privatising" other functions at Central Office has not been ruled out. The idea of charging MPs and others for research services provided by Central Office has been examined in the past, but would provoke a stiff reaction from the parliamentary party. Another possibility would be ending the £100,000-a-year affiliation to the European Democratic Union and the International Democratic Union, the two main international centre-right bodies to which the party subscribes.

Rumours about cuts have already caused anxiety within Central Office. One insider said: "What is worrying a lot of us is that at this time in the cycle we should be taking people on, not letting them go."

Although party sources insist that income is "stable", cutbacks in large company donations has robbed the party of the means to reduce its overdraft.

One certainty is that any cuts will be in accordance with management criteria laid down by Jeremy Hanley, the party chairman, at the Conservative conference in Bournemouth in October, when he said that he would be "ruthless in cutting out every cost which does not contribute to our political objectives". The party has few alternatives to cutting its staff at Central Office.

Start your day with The Independent, sign up for daily news emails
Voices
There will be a chance to bid for a rare example of the SAS Diary, collated by a former member of the regiment in the aftermath of World War II but only published – in a limited run of just 5,000 – in 2011
charity appealTime is running out to secure your favourite lot as our auction closes at 2pm today
News
people
Arts and Entertainment
Bianca Miller and Katie Bulmer-Cooke are scrutinised by Lord Sugar's aide Nick Hewer on The Apprentice final
tvBut Bianca Miller has taken on board his comments over pricing
Life and Style
Approaching sale shopping in a smart way means that you’ll get the most out of your money
life + styleSales shopping tips and tricks from the experts
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
News
Elton John and David Furnish exchange marriage vows
peopleSinger posts pictures of nuptials throughout the day
News
in picturesWounded and mangy husky puppy rescued from dump
News
newsAstonishing moment a kangaroo takes down a drone
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Project Director / Operations Director

£50000 per annum: Recruitment Genius: This is an incredible opportunity for a ...

Recruitment Genius: Sales Administrator

£16000 - £17000 per annum: Recruitment Genius: A Sales Administrator is requir...

Recruitment Genius: EWI / IWI Installer

£23000 - £25000 per annum: Recruitment Genius: This leading provider of design...

Ashdown Group: IT Support Analyst - Chessington

£25000 per annum: Ashdown Group: IT Service Desk Analyst - Chessington, Surrey...

Day In a Page

Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all
The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there
The 12 ways of Christmas: Spare a thought for those who will be working to keep others safe during the festive season

The 12 ways of Christmas

We speak to a dozen people who will be working to keep others safe, happy and healthy over the holidays
Birdwatching men have a lot in common with their feathered friends, new study shows

The male exhibits strange behaviour

A new study shows that birdwatching men have a lot in common with their feathered friends...
Diaries of Evelyn Waugh, Virginia Woolf and Noël Coward reveal how they coped with the December blues

Famous diaries: Christmas week in history

Noël Coward parties into the night, Alan Clark bemoans the cost of servants, Evelyn Waugh ponders his drinking…
From noble to narky, the fall of the open letter

From noble to narky, the fall of the open letter

The great tradition of St Paul and Zola reached its nadir with a hungry worker's rant to Russell Brand, says DJ Taylor
A Christmas ghost story by Alison Moore: A prodigal daughter has a breakthrough

A Christmas ghost story by Alison Moore

The story was published earlier this month in 'Poor Souls' Light: Seven Curious Tales'