Boris Johnson has told the London Assembly the collapse of Visit London Limited which left pensions at risk and businesses facing substantial losses was the result of insufficient thought by City Hall.
Visit London Limited (VLL) was placed into administration in April following the establishment of London & Partners which merged the responsibilities of promotional agencies Visit London, Think London and Study London into a single body.
The firm’s collapse resulted in concerns over the future of its pension scheme and could see members become reliant on the Pension Protection Fund for assistance.
In addition a number of businesses are owed money for services supplied to Visit London.
Responding to a question from Labour’s Len Duvall at this month’s Mayor’s Question Session, the Mayor said: “If I’m honest I think things weren’t necessarily carried out with all the thought that they could have been and we are now taking urgent steps to sort the matter out.’
The Mayor confirmed his office were now working to “find solutions” both for “the creditors…and of course also for the pension scheme.”
Last month the Assembly heard from two London businesses which are owed money by Visit London and currently expect to get paid as little as 35-45% of the outstanding debt.
Dan Wardle told AMs that a database his business created for Visit London was being used by London & Partners even though he hadn’t been paid and the £8,000 invoice had been overdue at the time Visit London collapsed.
AMs also heard from recruitment consultant Tim Smith who is owed £14,000 despite staff he’d originally found for Visit London being transferred to London & Partners.
Both businesses complained that London & Partners is “operating from Visit London’s offices, using Visit London’s staff and resources and doing Visit London’s job” while leaving them unpaid.
Wardle said while the transfer of assets and staff to London & Partners may not be illegal, it was “immoral”.
Last month is emerged that the the Pensions Regulator “has significant concerns” about the decision to withdraw funding from Visit London.
The regulator said it was conducting an investigation into whether it would be appropriate to use ‘anti-avoidance’ powers which “in certain situations” allows it to “require entities which are associated with or connected to a sponsoring employer to put in place financial support for a scheme or make a cash payment up to the scheme’s buy-out deficit.”
The Mayor used today’s meeting to apologise for the “unnecessary uncertainty caused by the arrangements we entered into.”
Speaking after the meeting Me Duvall said: “While I’m pleased the Mayor has apologised to those so affected by the closure of Visit London, these hugely embarrassing events for the Mayor reveal his advisors were party to information they did not share with him.
“Given such astounding levels of incompetence, and the resultant anxiety for employees and suppliers, I think it’s only right they consider repaying some of their remuneration. It’s difficult to understand what benefit their presence brought at all”.