The Conservatives have been fined £17,800 for failing to declare a donation of more than £50,000 from a Tory peer to cover the redecoration of Boris Johnson’s Downing Street flat, which the party had claimed was a “gift to the nation”.
The Electoral Commission said the party had failed to “accurately report a donation and keep a proper accounting record” of the cash, which had been handed over by Lord Brownlow in October 2020.
Its report said the party had repeatedly said the money had not been a donation and had been described as “a donation to the Prime Minister via the party”, a “ministerial matter”, the repayment of a loan, and at one stage a “gift to the nation”.
The refurbishment of the flat in Number 11 sparked sustained scrutiny of Mr Johnson’s finances, with the works vastly exceeding the £30,000 annual limit afforded to the Prime Minister.
The Electoral Commission investigation – which took in more than 2,400 pages of evidence – found the party failed to fully report a donation of £67,801.72 from Huntswood Associates Limited in October 2020, including £52,801.72 connected to the costs of refurbishment.
The commission said Huntswood Associates – whose director is Lord Brownlow – transferred £67,801.72 to the Conservative Party on October 19, 2020.
Some £15,000 of that amount was for an event, but the commission said he “specifically identified the remaining £52,801.72 as a donation to cover an earlier payment of that value made by the party to the Cabinet Office”.
The Cabinet Office had paid three invoices over summer 2020, totalling the same amount, for the refurbishment of the Prime Minister’s flat, and these payments were made on the agreement that the sum would be repaid by the party.
But after the fallout the PM agreed to pay the full amount himself, leading to the Cabinet Office being refunded by the supplier – Soane Britain, which is owned by interior designer Lulu Lytle – in March 2021 and then subsequently refunding the Conservative Party.
The commission said that in donation records submitted on January 27, 2021, the party reported the £15,000 from Huntswood Associates but failed to report the £52,801.72.
The commission also concluded that the reference in the party’s financial records to the payment of £52,801.72 made by the party for the refurbishment was not accurate as it was referred to as a “blind trust loan”.
An investigation by Mr Johnson’s ministerial standards adviser Lord Geidt earlier in the year detailed how the work – which began in April 2020 while the Prime Minister was in hospital with coronavirus – was meant to be funded by a Downing Street Trust chaired by Lord Brownlow.
But this never happened, and therefore the commission said it was wrong to record the donation in this way.
The standards adviser said Mr Johnson had not been aware Tory donor Lord Brownlow initially had settled an invoice for the works until February 2021.
However the Electoral Commission saw evidence that Mr Johnson had sent Lord Brownlow a WhatsApp message in November 2020 “asking him to authorise further, at that stage unspecified, refurbishment works on the residence”, to which he agreed.
In December 2020, Lord Brownlow confirmed to the PM that he had approved further works.
The commission said Lord Brownlow had also described his payments as donations himself on a number of occasions.
In July, Lord Geidt said: “The Prime Minister – unwisely, in my view – allowed the refurbishment of the apartment at No 11 Downing Street to proceed without more rigorous regard for how this would be funded.”
On Thursday, Louise Edwards, director of regulation at the Electoral Commission, said: “The party’s decisions and actions reflected serious failings in its compliance systems.
“As a large and well-resourced political party that employs compliance and finance experts, and that has substantial sums of money going through its accounts, the Conservative Party should have sufficiently robust systems in place to meet its legal reporting requirements.”
The commission said the Tories did not initially provide detailed information about the funding of the flat and the cash given by Lord Brownlow had been described by the party “variously as a donation to the Prime Minister via the party; as a ‘gift to the nation’ rather than a donation to the party; as a ministerial matter; and as the repayment of a loan”.
The commission report added: “The party also made statements to the commission which were not supported by the evidence subsequently obtained.”
It said: “This is not the first time the party failed to deliver an accurate quarterly donation report. Two penalties were previously imposed on the party in 2019 and 2020 for failures by Mr Mabbutt to report donations, and there have been previous failures. Such repeat non-compliance risks undermining public confidence in the political finance regime.”
The Tories said they are considering whether to appeal against the fine.
A party spokesman said: “The Conservative Party has received notification from the Electoral Commission that, in their judgment, the manner in which a payment was reported represented a technical breach of reporting requirements under the Political Parties, Elections and Referendums Act.
“We have been in constant contact with the Electoral Commission with regards to this matter and have sought their advice as to how the transaction should be reported since it was made.
“We are considering whether to appeal this decision and will make a decision within 28 working days.”