Newly released correspondence shows that on the day Barclays and Transport for London claimed to be in talks over the bank’s sponsorship of the bike hire scheme, transport commissioner Sir Peter Hendy privately complained that the bank had failed to answer phone calls and emails for “more than six weeks”.
On February 19th MayorWatch revealed that the bank had originally been expected to pay £10m for the naming rights to the hire scheme’s third phase plus a further £15m towards the build out costs.
However the bank’s decision not to formalise a much publicised extension of the sponsorship deal meant TfL would no longer receive the money.
Instead the two parties were in talks over a compromise exit deal under which the bank would effectively hand back the more than £2m deducted from sponsorship payments because of performance failures.
This would see TfL receive the full £25m originally promised by the bank and allow it to present the repayment as pro-rata contribution towards the third phase.
On February 20th TfL press officers told the BBC: “we expect to receive a contribution from them for the Phase 3 extension.”
The following day Barclays told the broadcaster: “Barclays and TfL agreed that Barclays will pay £25m for Phase 1, Phase 2 and Phase 3 until August 2015, should a new sponsor not be found before that date.
“This includes a commitment from Barclays to pay on a pro-rata basis for the Phase 3 expansion of the scheme during the period that we are the sponsor.
“This commitment was made in writing ahead of the Phase 3 launch and Barclays and TfL are in discussions to finalise a legal amendment to the existing contract accordingly.”
However on the same day Barclays issued its statement, Sir Peter wrote to Group Chief Executive, Anthony Jenkins, to complain that the bank had failed to engage with TfL for “more than six weeks”.
In the February 21st letter, Sir Peter said: “I understand and respect your business decision not to extend the sponsorship beyond the term of the existing contract. What I cannot allow to continue however is the failure to confirm the changes to reflect the new position.”
According to the letter, the bank agreed on December 12th to pay “a total of £25 million should the contract with Barclays run to its original expiry of 2 August 2015.”
A Letter of Agreement confirming that position was issued by TfL on January 7th in the hope it “could be quickly signed to allow us both to set out a clear way forward for the remainder of the term.”
However Sir Peter complained: “Since then, we have been unable to elicit any substantive response whatever from either your Global Sponsorship Director or Vice President of Sponsorship.”
He added: “We and the Mayor are under growing, and entirely justified, pressure from the media and elected representatives to set out our position on sponsorship funding over the remainder of the contract.
“I am sorry to say that in the more than six weeks since we sent what we thought was an agreed draft, numerous emails and telephone calls to your team have simply not been returned. We have not been given any feedback, any suggested revisions or even any indication of when a response might be received.”
Sir Peter cautioned that the ongoing delay in finalising the deal posed “a very real danger that the fantastic work we have jointly undertaken over three years will be undermined by a basic inability to manage a smooth transition.”
He continued: “I am sorry to have to raise this matter with you, but I cannot allow this situation to carry on any further. We need to be able, no later than Monday, to jointly issue a signed letter confirming our desire to see out the remainder of the scheme for the agreed sum of £25 million.”
It’s understood that the bank has now signed the deal and that TfL will receive the full £25m unless it secures a new sponsor before August 2nd 2015.
