City Link announcement ‘not mishandled’

Jon Moulton said the directors of Better Capital, which owns the parcel delivery firm, are “very sorry” about its collapse and the “horrible effects” for its workforce.

The veteran venture capitalist claimed that taxpayers would not foot “much of a bill” for redundancy payments for the firm’s staff as City Link has “paid a fortune” in taxes since Better Capital took it over in April 2013.

More than 2,000 City Link staff are facing redundancy on New Year’s Eve and company administrators Ernst & Young (EY) have been unable to reach a deal with union bosses who are desperate to save the jobs.

The RMT union has urged Business Secretary Vince Cable to rescue the company but Mr Moulton said the minister’s Business, Innovation and Skills Department was aware of City Link’s collapse before Christmas and did not request a meeting. The RMT has accused City Link’s bosses of a “horrific catalogue of mismanagement”, but Mr Moulton denied the company’s collapse had been botched.

Asked on BBC Radio 4’s Today programme whether it had been mishandled, Mr Moulton said: “Not particularly, no.

“First of all, I must say on behalf of Better Capital and its board of directors that we are very sorry about the failure of City Link, and we’re very sorry about the horrible effects that follow for the workforce and contractors.

“I’m afraid that is the result of the company failing, nothing more and nothing less, the company was not viable.”

Responding to reports that redundancy packages for City Link staff could be funded with taxpayers’ money, Mr Moulton said: “I don’t think that the taxpayer is going to end up funding much of a bill at all on this.

“The taxpayer has certainly made an enormous amount of money out of private equity companies and their trading and success. Even in this one, the company would probably have ceased trading some 18 months ago - no jobs, no work for contractors and suppliers.”