The Conservative Party is running out of money. In the wake of its worst-ever election defeat, the party’s top officials are scrambling to get its finances in order before they can begin the work of rebuilding the party.
Multiple insiders have told i that at least half of the staff in party headquarters are likely to go – through redundancies. There are concerns that an already acute situation is being made worse by the long leadership contest. Donations that might have helped hold off the Tory party’s financial crisis are instead going to rival leadership campaigns.
But if any of the contenders for the Tories’ top job have a plan to address the issue, they are so far keeping it close to their chest.
It wasn’t supposed to be this way. As recently as the start of this year, Conservative Party bosses thought they had the advantage over Labour when it came to finances, even if they were behind in the polls. But things started to go wrong soon afterwards (see box), with problems spiraling during a difficult election campaign.
Donations tend to flow towards the party that is likely to win the election and form the next government – donors want to try to improve their access to the people in power, rather than those in opposition. But the speed at which funds dried up appeared to take Rishi Sunak and the then Tory chairman Richard Holden entirely by surprise, according to party insiders.
How the Tory party got in to financial difficulties
The Conservative Party’s 2023 accounts show it had built up a considerable election war chest, receiving almost £60m in income (including £35m from donations, £10m from people’s wills, and £6m from party conference), allowing the carrying over of an £18m surplus to spend in this year’s general election. Labour, by contrast, ran a small deficit of £1m.
Given that apparently strong financial position, in November 2023, the Conservatives quietly but substantially increased the limit on what parties can spend on campaigning during a general election, from a little over £19m to £35m – not the actions of a party that expects to be out-gunned financially during the contest.
Things started to fall apart in the run-up to the election. In March, the businessman Frank Hester, who had donated £15m to the Conservatives under Rishi Sunak’s premiership, became embroiled in a racism row after remarking that the black Labour MP Diane Abbott “should be shot”.
Sunak accepted that the remarks were “racist”, but refused to return any of the donations concerned, and did not comment on whether the part would refuse donations from Hester in future. As it transpired, the party had accepted £5m from Hester at the time of the scandal that was not yet public, which it also retained – but it has received no further donations from him since.
The loss of the party’s largest individual donor was compounded by a catastrophic start to the election campaign, in which Sunak became embroiled in a row over leaving the D-Day commemorations early, while several members of his team were alleged to have placed bets using inside information on the date of the election.
These scandals, combined with the party’s poor showing in the polls, meant donations collapsed. Across the five weeks of the election campaign, Electoral Commission figures show that the Labour Party raised £5 for every £1 the Conservatives managed – totalling £9.5m to the Tories’ £1.9m. By contrast, in 2019 the Conservatives raised £19.4m in donations versus a mere £5.4m for Labour.
“We were absolutely cash-strapped in the election, and that explains the party political broadcast,” one explained, exasperated – referring to an extremely cheap-looking televised campaign ad (see box below) put out by the party.
“The party is basically broke and the next leader is going to have to fix it,” said another senior insider. “It’s really going to matter who the next chairman is and whether they have any capability to fundraise … Conservative HQ needs a proper fundraiser as chairman because rebuilding is going to be expensive. I think they’ve let go of all of the campaign managers, which is a big mistake given the importance of the local elections next year.”
While it waits for a new leader who it hopes will bring in new funding, the party is having to drastically cut costs. Including people on temporary and fixed-term contracts over the election period, the party’s staff is expected to be slashed from more than 350 to little over 150, according to one party insider. Another said he expected the “core” HQ staff to be reduced from more than 200 to less than 100.
The party also faces financial woes over its offices. During Boris Johnson’s premiership, Dominic Cummings proposed relocating the party HQ to Leeds. Instead the Conservatives retained a “cripplingly expensive” party HQ on Matthew Parker Street in Westminster and added a second building in the West Yorkshire city. Insiders claim the party has been locked in to a deal on the Westminster building – with painfully high rent rent – for at least another two years. Insiders say closing the Leeds outpost was one option considered but contracts meant the party was committed until 2026.
The bargain basement election broadcast
Party election broadcasts are typically one of the best opportunities politicians have to get their message out to voters ahead of polling day. Each major party gets a fixed number of televised slots during the campaign to broadcast to the nation.
These are typically used to launch key messages intended to shape the campaign over the next few weeks. The Liberal Democrats got blanket positive coverage after using their election broadcast slot for a video showing leader Ed Davey helping care for his disabled son, using the election as a chance to promise to improve the lot for carers.
All of which made the Conservative election broadcast of 18 June all the more baffling. Instead of the slick, highly-produced broadcast everyone had expected, the Conservatives broadcast a lightly-edited clip of a press conference given by Laura Trott, then chief secretary to the Treasury, attacking Labour’s spending plans.
Speaking on a stage against a cardboard background, Trott reeled off already widely-criticised figures on the cost of Labour’s plans in footage that had already been broadcast on Sky several days before. Online commentators were baffled. One noted that the footage seemed to be so cheaply edited that a cough from the cameraman was audible.
“I saw it and was in genuine shock,” wrote another. “I am not their target audience but it was so sloppy and amateurish. It looked like a staffer just cobbled it together on Movie Maker.”
Months later, party insiders have confirmed what everyone at the time suspected: the broadcast was not some strange new tactic from the Conservatives. Instead, the party had simply run out of the money needed to do a better broadcast.
The leadership campaigns, however, seem to be unwilling to address issues of party finances – at least publicly. None of the leadership campaigns responded to queries from i.
Multiple insiders – including some working on different campaigns – said that leadership candidates were keeping their powder dry when it came to party finances, as none would wish to offer up potential donors or solutions that a rival might “steal”.
Instead, they were focusing on raising the £200,000 contribution to Tory party coffers needed from each candidate (one suggested the millionaire MP Mel Stride might contribute that personally, given his wealth) but otherwise no donors are giving to the party itself “because they want to see if their guy or gal gets in”.
Donors are, for now, staying aligned to campaigns – Conservative donor and businessman Michael Tory is running the finances for Tom Tugendhat, while former cabinet minister David Mellor is doing the same for Kemi Badenoch. Essentially, this means that until the leadership election is over, any donor money that does get raised goes to leadership campaigns, rather than to the party itself.
“This means there are scant sums to keep the party going until November,” a party insider said. “This is yet another reason why the long leadership race was an idiotic mistake.”
While it waits for a new leader who it hopes will bring in new funding, the party is having to drastically cut costs. The expected personnel departures are said to go beyond the usual cyclical post-election trim and take in some experienced staffers.
The Conservative Party did not respond to a detailed series of queries regarding its finances and spending.
For now, there is little to do for the party officials trying to keep things going but wait for a new leader and hope that they have a plan to fix the party’s financial black hole, even if they are not saying so publicly.
