The Conservative Party goes into the next election with some very considerable weaknesses, not least a dwindling grassroots membership, poor but improving relations with much of the traditional right-wing press and a potentially devastating split on the Right of politics. But one thing it won’t be short of is funds.

Over the last few years there has been a dramatic and consistent improvement in the party’s finances. Yesterday’s Telegraph reported that the party will be debt-free by the time of the next election – the first time since 1995. Nine years ago the party was borrowing £23 million. Eight years ago the party was still £8 million in debt but had reduced that to under £2 million by the end of last year. Within the next month the party will be in the black for the first time in a generation.

The improvement in the party’s funding reflects many factors – notably a decade-long period in which it has looked like it would soon be in power or has actually been in power. This decade has been used to greatly diversify the source of funding. The party is no longer dependent on a few generous people like this website’s owner, Lord Ashcroft, giving millions of pounds. I’m told that about 60 per cent of the party’s funds come from people giving £25,000 to £50,000. Howard Leigh has overseen this donor club set up and regular contact has helped mean the party has apparently lost very few donors to UKIP. The treasurers responsible for the recent health – Michael Farmer and James Lupton – lead by example and give some of the biggest sums. Only about 5 per cent of central funds come from local associations, although they obviously are vital for funding constituency campaigns. The profit-making annual Tory Conference raises twice as much for Con HQ as local members.

The improvement has happened despite the distraction caused by the electoral reform and Scottish referendum fundraising pushes – which have substantially relied on Tory donors and in the case of the No2AV campaign benefited greatly from the efforts of the exonerated former Tory Treasurer Peter Cruddas.

Central to the success has been Andrew Feldman’s authority in Tory HQ and his relationship with David Cameron. The party’s finances have been undermined in the past by the leader authorising large expenditures without the treasurer’s approval. One source told me that a large donation received in past years wasn’t banked for rainy days but had hardly been credited in the account before being spent. No longer. David Cameron directs all spending ideas to his long-time friend Lord Feldman, the party’s co-chairman. “Andrew’s centrality to the party’s financial position explains why his position was never in any doubt when last year he was accused of making the swivel-eyed loon remark,” said one Tory minister. They continued: “If the story of the last decade was told honestly Feldman would be recognised as one of the five most important Tories in the country.”

On the other side of the balance sheet activists are promised that there’ll be no last minute splurge of money on largely ineffective but expensive billboard posters. Money will be spent earlier than in previous electoral cycles and in more targeted ways – on marginal seats, via direct mail and through specialist campaigning. Crucially people will know that they’ll be giving to a debt-free party – although the party will retain an overdraft facility in case of an occasional cash flow problem every penny given will be used for frontline politics and not to repay debt.

The Labour Party has managed its own finances as badly as it managed the nation’s. At the end of last year its debts were £12 million. Outspent at the last election by the Tories (£17 million to £8 million) it will go into the next election even more dependent for money from the public sector unions who are resistant to the spending restraint necessary for Britain’s economic future. Mr Miliband may not be a good fundraiser for his own party but he is the other big explanation for the Tories’ rude financial health. If any donor isn’t sure whether or not to give we just raise the prospect of Mr Miliband as Britain’s prime minister, said one party fundraiser and the cheque is usually signed within seconds.

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