Labour Finances Set To Plunge Into The Red For First Time Under Jeremy Corbyn

One prospective parliamentary candidate said the community organiser model had already been shown to have failed under Ed Miliband, when he trialled some schemes in the hope of importing the model that led to the rise of Barack Obama.

“They’re either incredibly inexperienced or they duplicate what the PPC and the region are doing. It’s a total waste of money,” they said.  An MP added: “No-one really knows what these people do.”

Mansfield, where Labour hopes to take the council this May from local independents ahead of retaking the seat from the Tories, will be a key test. “Just imagine if we don’t win Mansfield,” said one shadow frontbencher.

Crucially, many of the new staff have been hired on contracts that extend until the next general election, rather than the rolling one-year contracts used in the past.  The decision to shift to longer contracts is defended by Corbyn’s allies, but carries a financial cost.

One NEC member said: “Community organisers can be a good thing, but we’ve way over-extended them. 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.”

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

Some of the staff in the leader’s office are funded by so-called ‘Short Money’, a taxpayer-funded scheme to give opposition parties cash. But several are paid through party funds.

If Labour were to get into office, it would instantly lose ‘Short Money’ and as a result usually plans a surplus to ensure it can continue to keep staff at HQ. “If we win the election, the irony is the party’s finances will be destroyed even more,” one party figure said.

But a party source defended the need for more staff in Corbyn’s office. “We are engaged in the serious process of preparing for a general election, which could be called at any time,” they said.

The party’s audit and risk committee, which has independent oversight, has separately warned for some time that Labour is overly reliant on membership income.

The NEC was told current membership is just over 500,000. The figure includes those currently in arrears who have not renewed direct debits.

Formby told the NEC that one recent drive for small donations from members had yielded an impressive sum of around £100,000, but some of her colleagues say such efforts are unsustainable.

The NEC heard that the party had 589 members more than it had budgeted for, out of the half a million total. Critics say that once members lapse the figure will in reality be 460,000, although this is hotly disputed by the party.

Others claim a big drop off in members disillusioned with Labour’s failure to listen to members demands for a second Brexit referendum. “Next year’s figure is the one to watch. It will go off a cliff,” said one ex-staffer.

The membership figures are seen as so sensitive that the usual weekly updates are now very tightly controlled. The next time Labour will formally publish its figures will be this summer, when it will post the December 2018 total.

A party spokesperson told HuffPost: “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.”