From India to Guernsey: Museum’s Outsourcing Journey Goes On

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Naval Guns outside Imperial War Museum, London

Following the winding up of museum contractor, Shield Guarding, the livelihoods of the Imperial War Museum’ Visitor Services and Security staff lies in the hands of a private equity firm. Alchemy Partners, which owns the new contractor, Noonan Services, specialises in investing in “distressed and underperforming businesses” to achieve “superior risk-adjusted returns” for its investor clients.

In 2011, the Imperial War Museum conducted a Visitor Services & Security review to compare the in-house service with the market. The review focused on “effectiveness, efficiencies and also opportunities for staff development.” A decision was reached to outsource the department and, in 2013, IWM had a successful bidder – “Shield Group,” a collection of security firms owned by Indian conglomerate, Topsgrup, was awarded the £10–11 million contract.

In April, this year, two years into a three year contract, Shield Guarding, went into administration. It has since been reported that the company made a £3.5 million loss in 2014 and, for some time, stopped paying staff pensions contributions, resulting in the Public and Commercial Services Union (PCSU) reporting them to the Pensions Regulator.

After months of rumour, IWM staff discovered that, following administration proceedings, they now worked for an Irish cleaning, facilities management and security firm, Noonan Services Group, who had bought the assets and business of the defunct Shield Guarding.

Noonan and Alchemy Partners

Noonan was set up in 1977 as a family business by Noel Noonan, a Limerick-born Irish businessman. In those days, it had a handful of staff and specialised in cleaning services. It grew dramatically but was still primarily a cleaning and maintenance firm until 2002 when it purchased an Irish security firm. In 2006, Noonan made a pretax profit of €4.3 million from a turnover of €103 million.

In 2008, Noonan was sold for €90 million in a management buy-out backed by a private equity firm, Alchemy Partners, described by Bloomberg as a “vulture firm.”

Alchemy Partners’ fund management company, Alchemy Partners (Guernsey) Ltd, is based in Guernsey and has businesses based in London. Between formation in 1997 and 2004, Alchemy was reported to have made a return of £1bn for investors, including Goldman Sachs Asset Management and British Aerospace investment fund.

The Deal

Alchemy’s acquisition of the defunct Shield Guarding, for an undisclosed sum, bears similarities to their purchase of another distressed business, Belfast-based outsourcing firm, Resource.

In 2014, Resource went into administration after an order requested by a Guernsey-based company, known as R3768723 Ltd, which is thought to be owned by Alchemy Partners.

John Hansen and Stuart Irwin, of KPMG in Ireland, were appointed as administrators of the defunct company and Noonan Services Group came in to purchase the business and assets.

Likewise, after Shield Guarding went into administration in April 2016, KPMG’s John Hansen and Stuart Irwin were appointed as administrators (by which time, Shield Guarding were known as Jameson and Harrison Security Limited). Noonan Services Group took over the business of Shield Guarding.

The Future

From finding themselves working for a firm owned by an Indian conglomerate, Imperial War Museum Visitor Services and Security are now employed by a company headquartered in Dublin, whose registered office is in Surrey and whose parent company is a vulture capital firm registered in Guernsey.

More significantly, the contractual rights of IWM staff, from all five branches, are in jeopardy and the policy of hiring staff on zero hour contracts at the Museum is likely to continue.

 

Museum Contractor Goes Bust

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Shield Guarding, the private security firm that was given a £10-11 million contract by the Imperial War Museums  to provide Visitor Services and Security, has gone bust two years into the contract. The business and assets of the defunct company have been acquired by Noonan, a facilities management company owned by private equity firm, Alchemy.

The privatisation, in December 2013, was controversial for turning over Museum front-of-house employees to a security firm with no visitor services experience. IWM made the decision for “effectiveness, efficiencies and and also opportunities for staff development.” Aside from quality of service,  concerns were raised that Shield Group profited by placing their staff on zero-hour contracts.

The contract with Shield, owned by Indian firm Topsgrup, was beset by payroll and administrative errors and failure to pay staff pensions on time resulted in the Public and Commercial Services Union (PCSU) reporting the company to the Pensions Regulator.

In June 2016, security staff from Shield Group working at the University of Portsmouth threatened a walk out if delays over their pay continued.

A winding up order was published, in February 2016, only to be retracted a few days later. On 8th April, administrators were officially appointed.

The PCSU, which represents some of the staff whose contracts were privatised, has urged that the Museum consider bringing the service back in-house. Moreover, question marks have been raised, again, about the contracting out process.