A donation to a party is defined in PPERA as a gift of money or other property with a value of over £500. When parties receive a donation, they must check that they can accept it, record it, and report it to us if the value is over £7,500.
The investigation (continued)
Engagement with the party and others
We served a legal notice on the party requiring it to provide evidence to the investigation. We also served notices on Cabinet Office and Lord Brownlow (as the sole person with significant control of Huntswood Associates), as we believed that both held further relevant evidence. The notices required recipients to provide all information held relating to the financial arrangements and transactions for the funding of the works at 11 Downing Street. The scope of the notices was wide to ensure that any transactions involving the party, directly or indirectly, were covered. The material provided was analysed to determine what was relevant to the investigation, and only relevant evidence is referenced in this report.
We received over 2,400 pages of evidence in response to the notices by the deadline we set. This included financial records such as invoices, bank statements, credit card bills, and communications including letters, emails, meeting minutes and WhatsApp messages.
We subsequently sought explanations from the party in relation to aspects of the evidence, including any possible reasonable excuse for the apparent failure to correctly report a donation. We offered the registered treasurer the opportunity to discuss matters in person, though this was not taken up. The party requested and was granted extensions to some deadlines.
Outline of the transactions
In order to establish whether or not an offence had been committed, we needed to establish whether the party had accepted any donations which had not been reported as required by law. We therefore examined the series of transactions which occurred in relation to the works in Downing Street.
We understand that costs for works to the private residence at 11 Downing Street are met by the Cabinet Office up to a sum of £30,000 per annum.
On the basis of the evidence we obtained, we established the following sequence of events took place.
21 January 2020: the supplier of the refurbishment work provided to a senior adviser at 10 Downing Street a detailed proposal for works to the residential areas of 11 Downing Street.
February 2020: officials from the Cabinet Office and 10 Downing Street considered options for how these works could be funded, beyond or instead of the £30,000 annual public grant already available. The option settled on was for a trust to be set up using anonymous donations.
1 May 2020: Lord Brownlow was approached by a senior party official to lead the process of establishing a trust, subsequently known as the Downing Street Trust, and, once it was established, to be its Chair. Lord Brownlow agreed and met with Cabinet Office officials to begin the process.
11 and 12 June 2020: the senior party official, the senior adviser at 10 Downing Street, and Lord Brownlow spoke by telephone about work already being undertaken at 11 Downing Street and the bills arising from this. They agreed an arrangement that was then relayed to and agreed with Cabinet Office officials by email on 22 and 23 June 2020. The supplier would be told to send the outstanding invoices to Cabinet Office, which would pay them and be subsequently reimbursed by the party, on the basis that the party would then be refunded by the proposed trust once that was set up.
23 June 2020: the Prime Minister formally offered Lord Brownlow the role of Chair of the Downing Street Trust.
24 June 2020: the supplier sent Cabinet Office three invoices totalling £52,801.72. One of those invoices, for a deposit on items of furniture, indicated that a further invoice would follow for the balance.
29 June and 2 July 2020: Cabinet Office paid the three invoices on the basis of the arrangement that the party would then refund it.
July 2020 onwards: a series of meetings and discussions took place involving Lord Brownlow and Cabinet Office officials, to progress work on the proposed trust.
20 July 2020: Cabinet Office invoiced the party for £52,801.72.
6 August 2020: the party made a payment of £52,801.72 to Cabinet Office.
September 2020: Cabinet Office received a further invoice from the supplier for £12,967.20, for the balance referred to in the earlier invoice of 24 June. Cabinet Office forwarded this to Lord Brownlow, who then forwarded the invoice to the senior party official. There was then further correspondence between the senior party official, the senior advisor at No 10 Downing Street and Lord Brownlow regarding who would pay this invoice.
24 September 2020: at a meeting of the group working on setting up the Downing Street Trust, including Cabinet Office and No 10 Downing Street officials and Lord Brownlow, it was resolved that no more works were to be commissioned for the residence without prior authorisation by Lord Brownlow.
13 October 2020: Lord Brownlow emailed the senior party official, asking: “…could you advise me of the total that The Conservative Party has ‘leant’ The Downing Street Trust? I will then make a donation to The Party to clear the ‘debt.’” A party finance officer advised Lord Brownlow that “£52,801.72 was processed on behalf of the Trust”.
19 October 2020: Huntswood Associates, a company solely controlled by Lord Brownlow, paid the party £67,801.72. Lord Brownlow stated in his email notifying the party of the payment:
“‘I will be making a donation to The Party today for £67,801.72. That includes the £15,000 you and I have agreed and £52,801.72 to cover payments The Party has made on behalf of the soon to be formed ‘Downing Street Trust’ of which I am Chairman.’”
On the same day Lord Brownlow also paid £12,967.20 direct to the supplier for the invoice received in September.
19 October 2020: the party’s finance team received the £67,801.72 and notified a range of party officers of this by email, including compliance staff under Mr Mabbutt and a senior officer in the fundraising team. £15,000 was identified as a donation. The balance was described as being for the “No10 fund” and by a senior finance officer as “funds for reimbursement”.
22 October 2020: at a meeting with Cabinet Office officials relating to the proposed trust, Lord Brownlow confirmed that he had made the payment of £52,801.72 to the party and had paid the invoice for £12,967.20 directly to the supplier.
26 October 2020: in the course of an email chain relating to the payment of £67,801.72, a junior member of staff in the treasurer’s department of the party asked about the nature of the remaining £52,801.72 received from Huntswood Associates. They were told by a senior fundraising officer of the party that the £15,000 related to “events” and the balance was for “something else” and “don’t worry”.
29 November 2020: the Prime Minister messaged Lord Brownlow via WhatsApp asking him to authorise further, at that stage unspecified, refurbishment works on the residence. Lord Brownlow agreed to do so, and also explained that the proposed trust had not yet been set up but that he knew where the funding was coming from.
30 November 2020: Lord Brownlow confirmed to the senior party official his intention to cover the further refurbishment costs personally.
December 2020: Lord Brownlow discussed further proposed works with the supplier, approved the work, and requested invoices.
6 December 2020: Lord Brownlow confirmed to the Prime Minister that he had approved further works.
18 December 2020: Lord Brownlow paid £33,484.80 to the supplier. Cabinet Office officials were informed of the payment by Lord Brownlow at a meeting regarding the proposed trust on 21 January 2021.
12 February 2021: Lord Brownlow paid a further £13,295.40 to the supplier. He sent a detailed update on the proposed trust to the Prime Minister.
This brought the total sum paid by Lord Brownlow and Huntswood Associates combined to £112,549.12. £59,747.40 of this was paid directly to the supplier by Lord Brownlow and £52,801.72 was paid to the party by Huntswood Associates.
9 March 2021: a senior Cabinet Office official stated in an internal email that the Prime Minister has confirmed he has now paid all bills with the supplier personally. On that basis, the supplier was now £112,549.12 overpaid.
Following discussion and agreement between Cabinet Office, 10 Downing Street, the party and Lord Brownlow, between 9 and 23 March 2021:
- the supplier paid Lord Brownlow £112,549.12, of which Lord Brownlow returned £52,801.72 to the supplier
- the supplier then paid £52,801.72 to Cabinet Office, the sum Cabinet Office had originally paid to the supplier
- Cabinet Office then paid the party £52,801.72, the sum the party had paid Cabinet Office originally
- the party paid £52,801.72 to Huntswood Associates
The net effect was that Lord Brownlow, Huntswood Associates, Cabinet Office and the party had been repaid.
Any payments between the Prime Minister and the supplier are outside the scope of our investigation.