Plans to renew emergency fleet look unlikely, warns top London Fire Brigade official

By David Hencke | 5 September 2012

“I see us facing another fiasco similar to G4S”
 – Andrew Dismore, former Labour MP and London Assembly member

Plans to replace London’s ageing fire engines are in jeopardy because of cash problems at the company contracted to renew them.

The admission, unearthed by Exaro, was made by a senior official at a budget meeting at the London Fire Brigade (LFB). The company that maintains the capital’s 169 fire engines is meant to replace them in a rolling programme from 2014 under a contract paying £1.5 million a month.

But the senior LFB official who oversees the contract has fears about whether the company will be able to carry out the phased replacement of the engines, some of which are 20 years old.

The company, AssetCo London, last week changed its name to Premier Fireserve. The AIM-listed AssetCo sold it earlier in August, along with another company that had a 20-year contract to supply and maintain fire engines in Lincolnshire, for just £2.

Sir Aubrey Thomas Brocklebank, an Old Etonian baronet with a passion for racing Citroen 2CV cars, bought the companies through an investment vehicle that he set up in July. LFB only learnt of the sale after it had taken place.

The latest set of accounts for AssetCo London for the financial year to September 2011, which were only filed with Companies House last month just ahead of its sale, says: “The contract with the London Fire Brigade delivers a steady stream of revenue to the company, but this does not match the debt-repayment profile.”

The company looks unlikely to be able to embark on replacing the fire engines as agreed, according to Sue Budden, LFB’s director of finance and contractual services.

She is recorded as making the comments in minutes of the budget-monitoring sub-committee of the London Fire and Emergency Planning Authority (LFEPA).

She told the meeting: “When they look ahead and look at the big vehicle replacement that is due to start in 2014, I think they can see they are not set up to cover that.”

Valerie Shawcross, the Labour Assembly member and former LFEPA chairwoman, asked whether the contract would be refined or terminated if it is “fundamentally not viable”.

Budden responded by saying that the LFB was in talks with the company but that these were “commercially confidential”.

She continued: “The vehicle replacement was in tranches. It starts in 2014 with a smaller number, and then ratchets up. I think that it is probably unlikely that we would see those that were due to be replaced in 2014 being replaced.

“We would look to re-life them in tandem with the enhanced maintenance regime and vehicle inspections to make sure they are fit for purpose, but we need to resolve the situation in time for the full replacement to start.”

Shawcross asked what would happen if the company collapsed.

Budden said: “It is the bank that owns all the assets in the contract. We have had many conversations with the bank, and the bank would not, at any point, impound these in any way to get their money back. They have given us every assurance that, whatever happened to AssetCo, we would have full access to the fleet.”

The extraordinary circumstances of the case will intensify concern over the coalition government’s policy of encouraging private companies to run public services, which were highlighted by a shortfall in the number of private security guards that G4S was able to supply for the Olympics.

Andrew Dismore, the former Labour MP who was elected as a London Assembly member in May, said: “I see us facing another fiasco similar to G4S, whose private-sector failure caused such embarrassment for the government during the Olympics.”

The LFEPA admitted that it had deducted more than £1.1 million from payments to AssetCo in the last financial year for failing key performance tests in maintaining London’s fire engines.

It also admitted that the authority was not told of the £2 sale until after the event.

An LFEPA spokesman said: “AssetCo plc was unable to share this sale with LFEPA before its formal announcement due to the commercial confidentiality expected in order to comply with stock-exchanges rules in respect of insider trading.”

But the LFEPA insists that the sale had no direct impact on the contract, supplied by a company with a troubled history.

Update 13 November 2012: London Fire Brigade today announced that it had stripped Premier Fireserve of the contract to maintain and renew its fleet of engines.

It has appointed Babcock International Group, supplier of engineering support-services, to take over the contract “on an interim basis”.

In a statement, London Fire Brigade said: “Due to a deterioration of the services provided by Premier Fire Serve Limited (previously called AssetCo London Ltd), the London Fire and Emergency Planning Authority, which runs the brigade, has exercised its right to terminate the contract and appoint a new provider.

“While undertaking a full, competitive procurement of the services it has appointed Babcock to maintain the fleet on an interim basis of 18 months until the new provider has been appointed.”

Additional research by Alex Varley-Winter. David Hencke is the author of a report on AssetCo, which was commissioned by the Fire Brigades Union.

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