London

Bob, Boris and City Hall's relationship with Barclays

Bob Diamond is Boris Johnson's favourite banker.

Every year London's mayor is the star turn at Barclays' private dinner during the gathering of global giants at the world economic forum in Davos.

In 2008, Mr Diamond agreed to head up the Mayor's Fund , set up after an eye-catching campaign pledging to get private philanthropy into public projects.

Mr Diamond pulled out before its launch, preoccupied in the United States with pulling off the lucrative deal to purchase a large chunk of assets of the collapsed Lehmann Brothers.

But far from leaving the Mayor's Fund in the lurch, he made a seven-figure donation, and agreed to underwrite its administration costs.

However, despite the importance Mr Johnson attached to it in the early days, the fund has had limited success and faded almost entirely from view, barely mentioned in the recent election campaign.

And as others distanced themselves from Barclays former chief executive, the mayor had warm words.

"Bob Diamond has provided enormous time, energy and philanthropic effort to the cause of helping young Londoners through the Mayor's Fund," he said.

"As far as I'm concerned, that work is set to continue."

Annual bonuses

Mr Johnson has been notably careful not to criticise him personally.

He had no complaint about Mr Diamond's huge annual bonuses but was happy to attack plans for Stephen Hester's remuneration because, as the head of RBS, his was a company bailed out and sustained by the taxpayer.

Barclaycard has been a long-standing sponsor of London's Thames Festival and the mayor has been eager to have input from Barclays at City Hall.

There have been regular meetings with bank officials and Barclays is represented on a housing advisory board, looking at how pension funds might be tapped to build more affordable housing.

Image caption Barclays sponsors the mayor's bike hire scheme

But the real coup for the bank came along on two-wheels, the 'Boris Bikes'.

It is 2012 bonanza time for Barclays, their logos emblazoned across free-wheeling advertising space during the Games, although the bikes cannot be ridden into the Olympic Park itself for health and safety reasons.

Many people may have been surprised - at the height of the banking crisis - by Mr Johnson's choice of a bank to sponsor his flagship bike hire scheme.

London's mayor regularly claims to have garnered £50m from Barclays. This is over eight years and represents a fraction of the costs of the scheme, most of which comes from the tax payer.

But it's also misleading.

Personal approach

Under the contract Barclays pays up to £5m-a-year but there is a clause linking the amount to bike usage.

Numbers have not met expectations and City Hall will not reveal exactly how much Barclays is paying.

The bank was chosen as sponsor after a personal approach from Mr Johnson to its chairman.

He did not make similar approaches to other banks and thus missed the chance, critics argue, of a genuine auction or competition which might have secured better value for the tax payer.

Some on the London Assembly are now asking for the Barclays bike scheme to be reviewed.

A Transport for London (TfL) spokesman said: "Barclays is a valued sponsor and supporter of cycling in London and we continue to work with them to ensure a good deal for Londoners.

"TfL will continue to monitor the situation following this investigation and the subsequent fines, but it is essentially unrelated to the sponsorship arrangements currently in place."

But with the controversy unlikely to subside soon, some are arguing the mayor should be judged on the company - or rather companies - he keeps.

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