Andrew Pierce was a regular source of insider information about the Tory finances when he was at The Times.  He appears determined to add to that reputation from his new journalistic perch at The Telegraph.

Contrary to other reports – now attributed to briefings by outgoing Tory Treasurer Lord (Jonathan) Marland – the party’s finances are not in good shape.  The party, writes Mr Pierce, will still have debts of £8m even after it has sold its Smith Square premises for more than £30m.  At the time Michael Howard announced the sale of Smith Square he had promised that much of the proceeds would pay for a long-term endowment for the Conservative Party.  It now looks as though all of the money will be needed to keep the current Conservative Party afloat.

The finances deteriorated sharply under Michael Howard’s leadership for two main reasons:

  1. The party left 32 Smith Square for its swish and unnecessarily large Victoria Street offices without a buyer in place.  Mr Pierce estimates the cost of that move at over £5m because of the delayed sale.
  2. A "lavish" £18m General Election campaign.

Under David Cameron the party’s fundraising operation has improved but not as much as some reports have suggested.  The Tory leader is now said to be concerned that reports of the party’s financial recovery are undermining other fundraising efforts.

The squeeze is also on expenditure.  CCHQ staff will soon be moving to Millbank but they will be in two separate units in order to trim costs.  Some will be based in New Labour’s old haunt – Millbank Tower – whilst others will be at 30 Millbank.  There are concerns at the effect of this set-up on internal communications.

Party Chairman Francis Maude’s institution of tough new procurement procedures and renegotiation of the party conference contracts should put the party on a better long-term footing, however.