Future for London’s emergency fleet left uncertain after company sold for £2
By David Hencke | 5 September 2012
AssetCo was one of the first companies to take over the maintenance and replacement of fire engines in the UK.
In 2001, Ken Livingstone, as Labour mayor of London, awarded a 20-year contract worth £18.5 million a year to the Lattice Group, a group that spanned vehicle leasing and telecommunications, to maintain and, eventually, to replace the capital’s fleet of fire engines.
But Lattice had financial difficulties and pulled out after just 18 months, despite having received millions of pounds in taxpayers’ money. AssetCo stepped in to take over the contract.
“Sir Aubrey Thomas Brocklebank did not reply to repeated requests for comment”
The terms of the contract would see the company provide London with a new fleet of fire engines between 2014 and 2021.
But continuing cash problems have led to heightened fears at the London Fire Brigade (LFB) about its fire engines.
The company originally sprang out of the privatisation of British Gas in 1986. John Shannon, an entrepreneur, became its chief executive after persuading AssetCo to take over his Irish lorry company.
AssetCo expanded aggressively. It signed a deal with the Lincolnshire fire authority. It also secured a seven-year contract in 2009 to provide 700 auxiliary firefighters in London, but these were seen as potential strike-breakers by the Fire Brigades Union.
It even expanded to the Middle East, securing a contract in 2010 to supply fire-fighting services to the United Arab Emirates worth £40 million a year.
Shannon built up a personal relationship with Brian Coleman, then Conservative chairman of the London Fire and Emergency Planning Authority, which runs LFB, and even gave him a £350 Christmas hamper from Harvey Nichols.
However, by March 2011, the company was being pursued by HM Revenue & Customs over unpaid tax, and had to raise £16 million from shareholders to stay solvent.
This sparked a boardroom crisis that led to the departure of Shannon, as well as of the chairman, Tim Wightman, and the newly-recruited financial director, Scott Brown.
After two months, the company faced a further cash crisis, but was saved from going into administration when creditors, including Lloyds TSB, agreed to take a 77 per cent cut in their debts. A court hearing was told that debts had reached £140 million.
There were fears that London’s fire engines could be sold to raise cash, but, in the event, Lloyds TSB had taken ownership of them. This prevented attempts by other creditors to force an auction of the fire engines and other equipment.
The AIM-listed AssetCo last month offloaded the company with the LFB contract, AssetCo London, and another subsidiary, which had the Lincolnshire deal.
They were sold for just £2 to Sir Aubrey Thomas Brocklebank, an Old Etonian baronet who bought them through an investment vehicle that he set up in July. LFB only learnt of the sale after it had taken place.
The Lincolnshire authority had already withdrawn from its contract last April after only six years. It was supposed to last 20 years, raising the question of whether Brocklebank will pursue legal action.
Brocklebank did not reply to repeated requests for comment.
The deal has left the listed company able to concentrate on the Middle East where it makes money. But the future for London’s fire engines remains uncertain.
Additional research by Alex Varley-Winter. David Hencke is the author of a report on AssetCo, which was commissioned by the Fire Brigades Union.