I should also add that the first decisions to make are over “critical” parts of the operation, things like meals on wheels services and operational contracts with hospitals etc. I suspect the administrators will quickly agree to keep these running at any cost while they sort the mess out, clearly it being in everyone’s interest for any transition to be as orderly as possible. Any rail projects where the line isn’t currently closed will be somewhat less of a priority.
The way these things often work is that the administrators (usually a large firm of accountants) get the call from the board late on a Friday, and spend the whole weekend working in secret before the announcement on Monday morning - so they’ve got some idea already of the challenges they face.
Again, thanks. They just said on BBC Breakfast that the government has committed to provide funding to keep services going whilst the mess is sorted out. This seems reasonable.
BTW, did you see that 717 crash in Turkey yesterday. The passengers should buy lottery tickets ...
Good to hear, yes there’s usually a lot that goes on behind the scenes in the run up to this sort of announcement, the business department and DoH don’t want anything critical interrupted even if (like with the banks) they have to underwrite things for a short while.
Yes, interesting accident, possibly a nose wheel steering failure or something wrong with throttles and/or thrust reversers that caused asymmetric thrust at low speed. They would normally make a u-turn on the runway at that point, first turning towards the sea then back around to the right. 737 by the way. Sadly a Turkish plane crashing in Turkey means we’ll never get an accident report worthy of the name.
I did hear engine failure reported, but nothing official.
I did wonder how they're going to recover it. With a crane in two or three big pieces, probably: I'd think the crash has rather eaten into the plane's fatigue life ...
Can I have 8-8.15 in the “Brexit caused Carillion to go bust” sweepstakes ?
What makes you think Brexit caused it?
I just thought it was common or garden corporate greed in a company that cannot even make money out of PFI.
It looks like a classic pre crash model with the balance sheet loaded up with debt so that the return on the limited equity is multiplied on the back of what was thought to be a fairly secure cash flow. Unfortunately, their cash flow as they expanded into the middle east did not prove as predictable as their debt covenants required. With that amount of debt on the balance sheet things can unwind fairly quickly even if individual contracts are, on paper, profitable.
From the government's point of view many of these PFI management contracts were pretty poor value for money and liquidation brings them to an end. Not saying the government didn't try pretty hard to keep Carillion going, clearly they did, but the outcome may not prove to be particularly damaging to the taxpayer in the medium term whatever the cost of keeping essential services going is in the short term.
Can I have 8-8.15 in the “Brexit caused Carillion to go bust” sweepstakes ?
What makes you think Brexit caused it?
I just thought it was common or garden corporate greed in a company that cannot even make money out of PFI.
It looks like a classic pre crash model with the balance sheet loaded up with debt so that the return on the limited equity is multiplied on the back of what was thought to be a fairly secure cash flow. Unfortunately, their cash flow as they expanded into the middle east did not prove as predictable as their debt covenants required. With that amount of debt on the balance sheet things can unwind fairly quickly even if individual contracts are, on paper, profitable.
From the government's point of view many of these PFI management contracts were pretty poor value for money and liquidation brings them to an end. Not saying the government didn't try pretty hard to keep Carillion going, clearly they did, but the outcome may not prove to be particularly damaging to the taxpayer in the medium term whatever the cost of keeping essential services going is in the short term.
Yes, leverage works in both directions and it seems they leveraged their losses. It does seem a good opportunity for the government to nationalise their PFI contracts at a knockdown price.
You keep repeating this but its nonsense. Not only was NI never hypothecated but the amount spent on Health and Pensions and Unemployment vastly, vastly exceeds the amounts generated by National Insurance. Thanks to the baby boomers retiring and healthcare inflation that is only set to get worse.
If NI was being spent on more than just healthcare and pensions etc you may have a point but you well and truly don't. If we were to return to a hypothecated system that we never had then you would have to slash pension or healthcare spending dramatically.
No, it is entirely correct. The whole point of National Insurance was to fund health, pensions and unemployment and it still raises £125 billion a year
The whole point is it has moved away from being hypothecated and away from original principles with the revenue being used from every government department just as in income tax rather than just pensions and healthcare, so you are wrong.
National Insurance raising £125 billion a year sounds impressive if you don't think at all about it.
If healthcare, pensions and unemployment combined cost less than £125 billion you might have a point that we should spend it all on those areas. Except ...
Healthcare costs £119 billion a year Pensions cost £96 billion a year
Even without considering unemployment you'd need to slash healthcare and pension expenditure by nearly half to fund it just with National Insurance contributions. So you are completely wrong.
No, as this hypothecation would be for the increase in the NHS budget, not the entire NHS budget.
Comments
I just thought it was common or garden corporate greed in a company that cannot even make money out of PFI.
I've seen this claim about rock bottom inflation before but it's simply not true. Inflation spiked at 5% at one point over the last 10 years.
Not as bad as in the past obviously but not nothing.
@BBCNormanS: Carilion going bust "the first Brexit economic scalp" say @BestForBritain blaming Brexit related slowdown in orders
I did wonder how they're going to recover it. With a crane in two or three big pieces, probably: I'd think the crash has rather eaten into the plane's fatigue life ...
From the government's point of view many of these PFI management contracts were pretty poor value for money and liquidation brings them to an end. Not saying the government didn't try pretty hard to keep Carillion going, clearly they did, but the outcome may not prove to be particularly damaging to the taxpayer in the medium term whatever the cost of keeping essential services going is in the short term.
So again, you are wrong