Michael Forsyth Associates

Contracting out and front groups

MICHAEL Ashcroft, the beleaguered Tory party treasurer, bankrolled an "independent" publicity campaign that allowed his multi-million-pound contract cleaning empire to prosper and led to a change in the law. The campaign was run from the London office of the former Conservative Scottish secretary, Michael Forsyth. A spokesman for Mr Ashcroft confirmed last night that he had contributed to the Public and Local Service Efficiency Campaign (PULSE), which was set up in 1985 to persuade the public sector to contract out services such as cleaning and catering. The campaign had been disbanded by the end of the 1980s after the Conservative government passed the 1988 Local Government Act .

Mr Ashcroft's Hawley Services Group, a contract cleaning firm later known as ADT, flourished under the new regime, with ADT, winning a third of NHS contracts between 1983 and 1988. Mr Ashcroft acquired doz-ens of small cleaning companies during this period, which he later sold for millions of pounds. The campaign was based in the St Andrew's Hill offices of Michael Forsyth Associates in London, but had its own telephone line, its own PO box number and a different postcode. Lord Forsyth, then the MP for Stirling, declared his involvement in the register of members' interests. Mr Ashcroft's association with PULSE was not made public at the time and the money was paid by one of his companies through a trade body, the Contract and Cleaning Maintenance Association. Peter Clarke, the campaign's director, said that Mr Ashcroft had paid about GBP 150,000 a year over four or five years to PULSE. He stressed there was nothing improper about the campaign, but said it was a previously unreported example of Mr Ashcroft's ability to use the political climate to help his business interests. "Nothing unlawful nor improper took place, this was very successful political engineering," Mr Clarke said. "Mr Ashcroft's Hawley Services Group prospered in the new market created by PULSE's lobbying. This might not seem unusual now but at the time it was radical. PULSE appeared to be a popular campaign but in truth it was a money-making venture for Mr Ashcroft."

Mr Ashcroft's spokesman said he had been involved in PULSE but stressed that he had not been a leading figure in the campaign. He did not recall how much money he contributed but said it was "signifi-cantly over-stated" to suggest a figure of GBP 150,00 a year. "One of Michael's companies was involved with PULSE but he was not the driving force," the spokes-man said. "He was the junior player in a perfectly legal action." The campaign's advisory council included a number of right-wing Tory MPs such as Gerald Howarth, Neil Hamilton, Michael Portillo and Teresa Gorman, as well as Lady Shirley Porter, the former leader of Westminster City Council. Mr Howarth, the Aldershot MP and a former parliamentary aide to Margaret Thatcher, supported the campaign but had not been aware where the funding came from. "If Michael Ashcroft was supporting it, then he was supporting an extremely fine organisation," he said. A confidential memo on PULSE's campaign launch says its main objective was to "increase public awareness of the advantages of using private firms to provide local and health authority services".

People

• Kevin Bell
• Michael Brown, later an MP
• Michael Forsyth
• Brian Monteith