City of London Corporation reveals its secret £1.3bn bank account
Financial power: Guildhall, the City of London Corporation’s headquarters. (www.shutterstock.com)
The City of London Corporation, the square mile’s local authority, yesterday published for the first time in its 950-year history, details of its secret ‘City’s Cash’ fund worth £1.32bn.
An investigation by the Bureau into the City’s lobbying power earlier this year is understood to have triggered the Corporation’s disclosure.
The eight-page City’s Cash Overview document shows that City’s Cash, which is a combination of funds and endowments built up over centuries, grew by £70m in the past 12 months to £1.32bn. The fund is dominated by the Corporation’s property holdings valued at close to £900m. The rest is made up of stocks, equities and bonds.
The Corporation spent £145.6m from the City’s Cash – one of three funds it owns. Of the £145m expenditure, £12.8m was earmarked for ‘City representation’. Critics of the Corporation of London claim that this indicates the Corporation uses its financial muscle to influence the political process.
But not all that £12.8m is spent directly on lobbying politicians and officials. In July, the Bureau revealed that the Corporation is the UK’s biggest financial lobby outfit. We estimated it spent £10.07m on engagement with the political process though the Corporation disputed this figure.
‘The Corporation of London is a powerful lobby group for a particular interest group and this raises questions about its accountability,’ said Father William Taylor, who between 2001 and 2008 was a City of London Corporation Common Councillor. ‘On the one hand it lobbies and on the other it says it is a local authority. Now it is beginning to understand the concept of “accountability” in a wider context.’
“The release of some details of the City Cash is a welcome step in the direction of the transparency and accountability (we have) been calling for,’ said the City Reform Group, a recently formed coalition of thinktanks, faith groups and City businesses.
‘But it is just that, a step. We now look forward to having a proper debate about how the Corporation uses its immense resources: we now know that the City of London Corporation spends £12.8 million annually on “City representation”- that is, lobbying. Is this expenditure really in accordance with the common good? Is it in the interests of all of us as consumers and citizens?’
The Corporation does not equate ‘representation’ with lobbying. Though much of the £12.8m is allocated to ‘promoting UK-based financial services’ through overseas visits to other financial centres and major set-piece occasions where overseas delegations are lavishly entertained at Mansion House and Guildhall, ‘City representation’ also includes supporting livery and charitable organisations.
‘Shaping legislation’
Money spent ‘shaping legislation’ in Brussels, Whitehall and Westminster is, according to the Overview, taken from its £3.9m economic development budget which is not included in the £12.8m ‘representation’ figure.
In July, the Bureau drew on a leaked City’s Cash statement as well as financial information reported by the Corporation on its parliamentary scrutiny department and economic development unit to come up with its £10.07m lobbying estimate. In total, the Bureau’s investigation into the size and scale of the financial lobby revealed it had a war chest worth £92.8m
Some 29 per cent of the £145m income of the Corporation’s City’s Cash (£42.6m) in the year to March 2012 was through fees from the three private schools it runs. These are City of London School for Boys, Girls and the Freemen’s school in Surrey. The City spent £64.3m spent on education. As well as its private schools, the Corporation helps fund the Guildhall School of Music & Drama. Its funding of three City academies does not come from City’s Cash coffers.
Income from investments brought in 52 per cent of City’s Cash.
