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Labour finances 'set to drop into the red' for the first time since Jeremy Corbyn became leader

2 min read

Labour is on track to run a deficit for the first time since Jeremy Corbyn took over as leader, it has been reported.

According to HuffPost UK, general secretary Jennie Formby told stunned members of the party's ruling National Executive Committee that the party now faced "difficult choices" following a raft of staff hires, the loss-making ‘LabourLive’ festival and a drop in membership.

The party moved into surplus in 2015 under a restructuring plan, clearing more than £25m of debts built up after Tony Blair's 2005 election victory.

But staff recruitment has reportedly now been frozen at the party’s HQ, and there have been plans for pay cuts and a pensions overhaul as the party tries to cope with the shortfall.

Currently, Mr Corbyn’s office in Parliament now has more than 40 staff. Previous leader Ed Miliband had just under 20 staff in ‘peacetime’, and 27 even during the run up to the 2015 general election.

One NEC member told HuffPost the party had taken on too many community organisers.

"Community organisers can be a good thing, but we’ve way over-extended them," they said. "We need to focus on fighting the general election, when it comes.

"There’s a reason you hire extra staff then, rather than in ‘peacetime’. They cost a lot of money."

One MP meanwhile told the site: “For a party that wants to manage the nation’s finances, being in deficit is not a good look, is it?”

A Labour spokesperson said: “We are proud to be one of the largest political parties in Europe, made up of over half a million members.

“Our party is financially secure, funded by ordinary members, trade unionists and small donations.”

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