Why did the British Council use an off-the-peg company to award Jeremy Hunt business?
The Slog looked briefly here yesterday at Jeremy Hunt’s extremely advantageous dealings with the British Council. Since then I’ve been looking more deeply into the affair. Now there are even more questions about it.
Jeremy Hunt co-founded the educational directory Hotcourses with adman Mike Elms in the 1990s. After producing a widely-criticised website for the British Council in 2002, an odd sequence of events resulted in the eventual appointment of another company called Sheffield Data Services. Although this was not made public at the time, Hotcourses had a 50% shareholding in this company. There is no explanation I can find as to why this company should have been put into the mix; but over the next seven years, the Council’s relationship with Sheffield Data Services was richly rewarding for Jeremy Hunt.
Hotcourses never competitively tendered for business handed to it by the British Council – a common Council practice, and one for which it too has been frequently criticised over the years. Although yesterday I wrote that the Hotcourses had a contract with a thing called ‘Education UK’, this turns out merely to have been a soundbite invented by Tony Blair in 1998: it has no legal existence at all.
So when the British Council says that Sheffield Data Services had a contract with Education UK, the reality is basically that Hotcourses got seven years of business from the British Council. For Jeremy Hunt – CEO of a fledging educational supplier and the disappointed owner of previous business failures – the British Council was a great quango client to have – especially as he didn’t have to pitch for the business. Hunt and his partners proceeded to do very profitable business with the British Council from 2002 until 2009. Indeed, as far as I can tell during that time, Hotcourses was a monopoly supplier.
Why all the subterfuge?
In fact, all British Council affairs seem to obfuscate, draw veils, or be shrouded in misleading words and phrases. ‘How the British Council is Funded’ for example (one of its leaflets) tells you precisely nothing beyond the fact that the Government funds it. Type ‘how big British Council grant?’ onto the site search engine, and you get several results, none of which are relevant.
The Council’s main glossy corporate giveaway in fact gives very little away at all – beyond baldly stating that ‘every £ we receive earns the country £2.50 in income’. I’ve searched high and low for the evidence of this, but found none….beyond an equally unfounded claim made by Lord Kinnock many years ago.
You have to try a number of Google strategies, in fact, before discovering that the British Council is funded to the tune of £211 million…..by you and me. It has no competitors. And it dishes out contracts hither and thither, with no regulation at all.
And yet it survived the Osborne cuts intact and unchanged.
The latest Hotcourses company report states that its primary activity is publishing educational guides and providing school-related information. It is a limited liability company with three directors and a small number of shareholders. And until May 2009 at least, Jeremy Hunt and his co-founder adman Mike Elms seem to have held the majority of shares. In that last year of Hunt’s directorship, the dividend declared was £2million, during what the accounts describe as a ‘fairly consistent’ trading year. In addition, Chairman Elms paid himself £250,000 a year last year. So as the co-founder, it’s unlikely Hunt earned much less. When Hunt resigned in May 2009, it will presumably have been necessary (given potential conflicts of interest) to buy him out. At that time, Hotcourses was valued at £1.8 million.
So throughout seven years of working with the British Council up until his final payday, it is reasonable to conclude that Jeremy Hunt made a great deal of money from the circuitous relationship between his company and the Council.
The unexplained part if it – Sheffield Data Services – is still there today in the Hotcourses accounts. And tucked away on page 23 of the 24-page of the latter’s company report is the news that, in 2008, Hotcourses provided ‘services’ to Sheffield Data of £1.45 million. But once Jeremy Hunt resigned, this figure suddenly became £0.00.
This would confirm that SDS was the vehicle via which (for some reason) the British Council did business with Hunt. And the current £nil figure would in turn suggest that, when the Culture Secretary left Hotcourses, the company lost the
British Council business.
So Jeremy Hunt obviously had a Special Relationship with the British Council. But The Slog remains befuddled: why was it felt necessary to acquire or form Sheffield Data? What was embarrassing about the Council employing Hotcourses direct? And if there was embarrassment, why did the Council go out of its way to keep Hotcourses as a supplier? Why did the relationship abruptly cease when Jeremy Hunt left Hotcourses? Why did the British Council lie about contractual changes in answer to a Freedom of Information request the following year? And why did its initial promise of involvement from the CSU and Yahoo prove to be baseless puffery?
Oddly, this company called Sheffield Data Services isn’t based in Sheffield: it is situated in West London…..at the same address as Hotcourses. Which is good, because it means that over the years, Hotcourses saved a fortune on stamps when it invoiced the company.
Here at Slogger’s Roost, we are convinced that there is a perfectly innocent explanation for all this. And we call upon Secretary of Culture and Media Jeremy Hunt MP to give it to us. As well as to David Cameron, Vince Cable, and a number of British citizens still struggling to make sense of Newscorp hiving off Sky News – and that thus making everything hunky-dory for the BSkyB takeover…..without reference to an MMC which was, very obviously, waiting for such a reference to be forthcoming.
There is now, by the way, an order for Sheffield Data Services to be struck off at Companies House. This either means Hotcourses want to ditch it, or CoHouse thinks it is a confection and not really trading.
Either way, we want to know: what was Jeremy Hunt’s involvement in the Hotcourses/Sheffield Data arrangement? Did he acquiesce in it? Did he feel comfortable with it? And as a selected Tory Candidate by then, did he know that the British Council gave a false answer to an FOI information request about it from The Language Business in 2005?
Over to you, Jezzer.