Tag Archives: BHS

The promised example

In light of all the outsourcing we saw yesterday, it is time to show you just how lucrative it can be to set the outsourcing stage. In this example I will go with a software example, as I have seen this myself. You see, sometimes a place is profitable for the mother company no matter how you slice it and with this example we see this in action.

Let’s take a software vendor, selling some software solution. Normally that entire path will set you back $7,000. The software, training, installation and personalising the solution. At this point you might think, well, it is all tax deductible for the company, so what gives?

Well, some of these players still have budgets to adhere to (unless you are in Italy), and when we look at that the procurement department will state that it is too expensive. So, the sales team has an idea. They say: ‘You know what! We can (if you take all three) the entire as a package for $5250, and that is a nice discount‘. So the company takes all this and accepts the deal. So the software is bought, there was a trainer on the spot educating the staff for 2 days and they set up whatever needed to be set up and the entire delivery is complete.

It all seems straight forward. Yet, it is not to be. You see that outsourcers often have a main office outside of that country and they want their franchise fee, which could be 70% of the software, yet they will always get FULL PRICE. So they will get 70% of $3,000, no matter what the discounted invoice was. Now that company has to make due with $3,150 for training, training materials, travel expenses, training hardware and staff. And for every deal they make the cost remain high, yet the revenue has been siphoned off and the cream went somewhere else. Now we get the stage where there was still a profit, yet the staff members are still costing thousands of dollars, as is the office and all other goods. There is not taxation as the revenue was too low and this is where we see the problems for a lot of these companies. They are now in debt, governments having to make deals and I cannot vouch for Interserve, Carillion, Serco Group Plc and Capita Plc, because where I know it was happening was not one of these. Yet I feel certain that others have been playing similar games and it has been going on for over 20 years that I am aware of that tactic.

So does the entire Interserve part now make sense? A debt of well over half a billion and its board members are still up for millions in bonus? I cannot tell what the reason is for the entire Interserve issue, yet what I have seen in the past, we should take a long hard look at what some consider to be debt and what some consider to be an optional approach to deferred invoicing.

We might see partial support when we see the article in the Morningstar (at http://www.morningstar.co.uk/uk/news/AN_1542962437936788100/interserve-expects-higher-operating-profit-despite-construction-loss.aspx). Here we see: “Interserve posted a pre-tax loss of GBP244.4 million on revenue of GBP3.25 billion in 2017. It then recorded a pre-tax loss of GBP6.0 million on GBP1.67 billion in revenue in the first half of 2018“, others sources had a similar setting, yet here we also see the headline ‘News Interserve Expects Higher Operating Profit Despite Construction Loss‘, now we see operating profits versus construction loss? Does it now seem more and more that we are given a half a billion birdie, whilst some are showing to be receiving massive bonus payments? How is this not tackled? How come that for 20 years we have seen the impact of creative bookkeeping, whilst the European governments have been unable to fix anything?

When we see the Financial Times (at https://www.ft.com/content/b2c9fdd2-eeed-11e8-8180-9cf212677a57) giving us: “Interserve employs 80,000 people worldwide — 25,000 in the UK — in jobs that range from cleaning the London Underground to maintaining army bases and building a shopping centre in Dubai.” Giving me the speculative thought ‘How long until we see the Dubai part sold off (including equipment) at roughly 5 pennies to the pound? How would that screw over the 25,000 staff in the UK when Interserve folds? We will not know until the Interserve lawyers and accountants finalise they optimised plan in 2019, but I fear that the impact of outsourcing is going to be felt on a very large area. You see, outsourcing growth is through the roof and it is growing in a sphere of influence that has not been seen before. Fintech, Meditech, Pharmaceutics. It seems like the golden calf, yet it is a treacherous field. It might be a temporary field at best. I think that the construction companies have good weather now, yet the crash of the 80’s is still with them, Communications is all about outsourcing, yet when those outsourcers do not finance the training of staff, their usefulness will decline in 3-4 years as the companies are focussing on 5G. In that same light, we see a pharmaceutical growth, yet the setting is that many patents will fall over in the next 5 years. At that point these companies outsourcing can discontinue the renewal of contracts and the staff issue will not be their problem, it will be the problem of the outsourced company and that is starting to push a wave to a much larger degree than we have seen before.

So as we return to the Financial Times article we get “Interserve said profit growth for the year so far had been as expected, and it anticipated “a significant operating profit improvement” for the full year. The group, which swung to a loss in the half-year, did not provide figures“, we knew that, many sources had it. Yet we also get “It has revenues of £3.25bn but is valued by the stock market at just £75m and is already under close watch by the British government in case of collapse“, when a 3 billion revenue company is merely valued at merely 2% of that, there is a lot more going on than mere sneaky keeping of books and that needs to be seen as well. So when we consider: “Interserve’s update attempted to “sugar coat” the increase in net debt and “to deflect from the news” that the Cabinet Office is making sure it has alternative suppliers to take the place of Interserve should it fail. “The operational developments are not good reading either,” he added“, a part given to us by the independent analyst Stephen Rawlinson, we need to look deeper. You see, if the UK does get confronted with: “alternative suppliers“, we need to accept that for a chunk of those 25,000 British workers it will not spell good news, even more so, there is every chance that it gives a larger level of turmoil to those people whilst some board members end up going home with a payout that is between £380K and £2.25M, making sure that they can live in a sea of porn and Netflix for the longest of times, possibly even until the day they die.

Is it that bad?

Well, that is not certain, yet the issue that the UK accounting watchdog had to quit over criticism regarding Carillion (source: the Guardian), they give us the quote: “Stephen Haddrill will depart after nine years in charge of the Financial Reporting Council, which is subject to multiple inquiries into its effectiveness and independence” we get one thought, yet in light of “a committee of MPs described the FRC as “chronically passive” in an excoriating report into the construction group’s failure, condemning the regulator as “too timid to make effective use of the powers they have”” we should consider that there is every chance that Interserve might have been on that same side of the page making the issue larger and more critical. Is it not interesting that too often we see terms like ‘too timid‘ when it comes to dealing with the rich? The entire Sir Philip Green’s £1 sale of BHS is a nice example to keep in mind. The setting where the people behind BHS are apparently not in prison in a stage where “the settlement will not fully restore the retirement income they had been promised by BHS” (source: Financial Times). One of many failings where we see the creativity of applied accountancy and the improper use of non-committal prison sentences to those employing these fast and loose solutions. At present there is a speculative chance that Interserve might be on a similar track, but that is pure speculation, we will not know until the solution is offered, which according to the papers will not happen until somewhere in 2019, until that point arrives thousands of employees at Interserve will likely be in a state of stress. It is one hell of a way to approach Christmas.

Humbug!

 

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As the costs come

There is an issue that we see floating at Pressnet. Actually it’s an issue that started last week. I got the news from Retail Week (at https://www.retail-week.com/companies/bhs/bhs-admin-costs-spiral-as-mps-demand-answers/7017777.article), yet it came from several directions, so there is ample visibility. Yet, what is going on? This is an important part and even as there is great benefit to anyone’s soul to blame PwC for this, yet is that fair? The question becomes, is it in the books? When we look at the previous audits, was the quote “BHS administration costs have come in at £1.3m more than expected as MPs question a £35m ‘floating charge’ paid by Arcadia” a fair question? In all this, are these floating costs in the books? I actually do not know, yet I equally question why certain parties aren’t openly asking these questions at the PwC desk. Is that not equally odd?

The two quotes that matter are “If it was such a completely standard move, as Duff & Phelps claim, one wonders why it was reversed by the co-administrators as one of their first acts upon being appointed, and why the PPF seems to take a rather different view.” and “Meanwhile, Field questioned the transference of a “floating charge”, put in place at BHS by Green’s Arcadia Group. Duff & Phelps transferred the charge to Linklaters last October“, this now gives us the parts:

  1. If we accept the bankruptcy announcements of April 2016, how come that this is done in October 2016?
  2. If we accept that a floating charge is ‘a liability to a creditor which relates to the company’s assets as a whole‘, than the part that this is a credit to the Arcadia group should be in the books, and should have been in there for some time I gather, so why are there no questions asked at the address of PwC, in addition, why are MP’s not asking certain questions from Linklaters? Now, we should accept that Linklaters cannot divulge too much (read: any) information, yet when this was all set up could be seen as mere administration and that needs to be logged, which means that either Arcadia or BHS could release that information, if they choose not to do that, the question that follows should be a lot more serious and we need to wonder what else is in play.
  3. When we look at the quote “If it was such a completely standard move, as Duff & Phelps claim, one wonders why it was reversed by the co-administrators as one of their first acts upon being appointed, and why the PPF seems to take a rather different view“. In that I look at another issue, the quote found in Professional Pensions gives us “A spokesman for FRP Advisory declined to comment, adding all that needs to be said is covered in creditor reports“, yet if it is there, should it not also be in the accountancy audit? That is an assumption from my side, and I could be wrong, yet the amount of £35m moved via Linklater in April 2016, if none of the audits has this on paper, questions should be asked, if it is there, questions should still be asked, yet it seems that questions are asked in such a late stage. In all this, City A.M. gives us: “Tension has been building between the PPF and Duff & Phelps throughout the administrative process. In November, the PPF voted against Duff & Phelps’ request to increase its fee. Malcolm Weir, head of restructuring at the PPF, said BHS pension scheme members deserved “value for money”“, which sounds fair enough, yet in all this, even if Arcadia hasn’t received the funds at present, the fact that we see “The £35m was never paid to Arcadia. It was always held in an account to our order. Our legal advisers have confirmed that the floating charge is valid. However, I understand that the liquidators and their legal advisers have made comments concerning its validity, but, I nor my legal advisers, have received any evidence to support their view.” In that regard, we now see that legal advisors are on opposite sides and both sides claim their version of validity, as legal advisors would. This is not in question at present, what is interesting is that the media at large have not included PwC in any of this, as they have been seen as the auditor of BHS. Oh, and there was a reason for me mentioning: “if none of the audits has this on paper, questions should be asked”, be aware that I have no experience on corporate taxation. However, would it not make sense that a £35m invoice would impact next year’s taxation significantly and as such, should it not be mentioned?

In this let me take you back to the previous article, where I discussed the Financial Times (at https://www.ft.com/content/4c3965f2-3c4e-11e6-9f2c-36b487ebd80a). Here we see “The Financial Reporting Council said its investigation related to PwC’s audit of BHS accounts in the year before the retailer was sold by Sir Philip Green’s Arcadia Group, in a deal that wrote off £215m of debts“, which is fair enough. In addition we see “At a committee session in May, PwC partner Steve Denison was asked by MPs to explain why the firm was prepared to sign off BHS as a “going concern” just days before its sale for £1“, which is fine too, yet where in all this is the £35m transfer to Linklater for the Arcadia group? If Duff & Phelps took control in April, would the accountant not have been aware of the thirty-five million, as such should PwC have been aware? (Read: not implied, yet questioned).

Let’s not forget that the Financial Times article was from June 27th, which means that the £35m should have been on many minds at that time, yet for the longest time there was little to no mention. I would think that if a firm is sold for the price of a mere Tesco Sliced Wholemeal Batch Loaf, would a question not be ‘What else needs to be paid for?‘ at that point the entire £35m transfer should be on the top of everyone’s mind, especially as there was a decadent pension gap issue many times that size? Perhaps it is just me, but that would be on my ‘media’ mind. Not just the actual newspapers, a few other publications (like TV and morning shows) would have had a field day with the mention that pensions will remain short, but the bosses will get squared for that thirty-five million. Emotions would be running high that day, let me guarantee you that emotions will run high on that topic!

In that regard, some MP’s are starting to ask additional questions as we see a fees increase £500,000 for Duff & Phelps’s. I wonder how many additional man years of work have been spent that warrants a £500K increase. The week gave the quote: “When they were appointed last April, initially at the behest of Green and then approved by the BHS board, the company estimated its costs would be around £3.5m“, now I imagine that an insolvency comes with all kinds of complications, but how much work, how many months of full day activities warrants £3.5M? I do not know, I am merely asking, especially as the pensions have been for the most unpaid for years now. The site this is money gives additional connections in the shape of Goldman Sachs, where among the top earners at the investment bank’s London office will be the former co-chief Mike Sherwood, who faced questioning from MPs last year over the bank’s role in the BHS scandal. He landed a $21 million pay and bonus package last year, worth £15 million at the time (at http://www.thisismoney.co.uk/money/news/article-4120336/Now-bankers-bonus-Brexit-Goldman-staff-BHS-probe-donate-pension-fund-says-MP.html).

Now a lot of this news is between 1-2 weeks old and a few items are merely days old. Yet in all this we see a massive drain to less than a dozen people, where including Arcadia a syphoning through invoicing has surpassed £50M if we include the Arcadia bound payment, yet all is not well as several sources give large payments in their report, yet the exact part of what represents BHS is not given, but implied to be a large part. As such Mike Sherwood might have ended up with 21 million dollars, yet what part is though or because of BHS is not given, in his position, with his amount of accounts, the BHS part could be less than 1%, and as there is no clarity, the Week who gives us in addition “Huge payments to bankers who worked on the BHS deal could prove particularly controversial“, only if the bulk of these payments were regarding BHS, but that is not a given, I would add, it is exceptionally unlikely. By the way, those people did not really bother reporting that when Greece got back onto the markets In April 2014. In my article ‘Are we getting played?‘ (at https://lawlordtobe.com/2014/05/18/are-we-getting-played/), where we saw the disastrous act of Greece getting back on the bonds field selling 5 billion in bonds. Yet the media at large was very very eager not to mention that the few bankers connected to this ended up with a total bonus of $50 million for what amounts to 3 days of work. So on one side they refuse to give the info, now we see incorrect (or at least incomplete info), with a reference of 21 million, the package of Mike Sherwood.

Yet there is more, the part I find hilarious is “Frank Field MP, chairman of the Work and Pensions Select Committee which quizzed the Goldman bankers on the deal, said: ‘This gives them an ideal opportunity to donate something to the pension funds, to make partial amends for the failure to give effective advice“, you see in that, he didn’t make any such reference to PwC. Pricewaterhouse Coopers, has been seen on the minds of a few as we see (in the Telegraph of all places) “select committees have also said that they have welcomed the Financial Reporting Council’s investigation into why PwC audited BHS’s accounts as a going concern when it was evident the high street chain was dependent on support from Arcadia Group, Sir Philip’s empire which includes Topshop, Dorothy Perkins, Miss Selfridge and Burton” in that the red flags of pension deficits we see a £571m pension deficit and kindly audited by PwC, so who else are they auditing in the Empire that is (or was) part of Philip Green?

Yet in all this, at present there is, just like with Tesco very little noise regarding the Financial Reporting Council and PwC, it seems like the press walks away when these two are mentioned in one sentence. After June 2016 there is abysmal little to see, which after Tesco and BHS that should be a little weird. Even when we look at the BHS elements now, overall the Auditor is left unseen in more serious ways, other than that Tesco is now hiring PwC again for other services, which after the shortfall and the DeLoitte results is a little bit weird to say the least.

You see, last year Aditya Chakrabortty in an opinion piece wrote: “Cameron warned of “the slow-motion moral collapse that has taken place in parts of our country these past few generations”. He was right. It’s just that it’s been led by those at the top – the ones at the boardroom tables, their expensive helpers – and their mates and supporters in politics using taxpayer money to wave them on” is not a wrong view, it comes three years after I made pretty much the same claim, so we can see that some players are a little late to the party. What is linked that when it comes to the matters as happened with BHS, crime literally does pay. It does for the auditor, the business men who own the place and sell it for £1 as well as the politicians who threaten with a £1,000,000,000 fine which will never happen (that pesky thing called the law gets in the way). You see, for many of us and for the victims it is a crime, yet from a legislation point of view that is not certain and it seems that no crime took place, because the people are not in jail, not in the dock and not in court. They are refurbishing their £10 million estates, whilst the working victims cannot make ends meet and where the auditor gets rehired by those they seemingly wronged for even more high priced consultancy.

As the costs are handed to the corporations in the shape of invoices, we see that crime seems to pay and it does so at a lower tax bracket than normal incomes. It can be stopped, you could be on the other side of the equation. You only have to be willing to do the one thing others did not anticipate and you have to be willing to be utterly ruthless. Basically you have to become a businessman like Sir Philip Nigel Ross Green and hire and firm like Pricewaterhouse Coopers to advice on your endeavour and audit it.

 

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The views we question

This is not a piece of me knowing, this is not a piece of me telling how it is. This is me questioning certain choices and certain actions. When we now see the actions as displayed by the press, is the press correct, was the press played or is the press playing us? To help to you in this, let’s start with two articles, both in the Guardian. The first (at https://www.theguardian.com/society/2017/jan/14/nhs-crisis-my-frail-mum-was-forced-to-wait-on-the-floor-for-eight-hours), where we see the emotional start ‘My frail mum was forced to wait on the floor for eight hours‘, I myself have had to wait in triage twice. This happens. There is only so much a hospital can do, as for the wait on the floor? When we see the first story appear we see “It was another seven hours before he went upstairs for an angioplasty and a stent. The A&E staff were under immense pressure, having to deal with far too many patients, but they did an amazing job“, now this person was from Worcestershire, famous for its Lea and Perrin’s sauce. In another case we see “It took 30 minutes for the paramedics to get there but when they arrived they were brilliant“, as well as “I don’t want to blame the paramedics or any staff at the NHS. They do a wonderful job and do their best to take care of patients when they arrive. But the issue is with the government and the lack of funding to our healthcare services” from that same person. Finally the one that is important here is “Dr Liam Brennan, president, Royal College of Anaesthetists: ‘These are no longer winter pressures, but perennial pressures’” with the added quote “In my 34 years as a frontline doctor I have never seen the breadth and scale of the relentless demands across the whole health and social care system that I see today“, in all this, this is the part that is in the eye of the hurricane, because, when we look back to Baron Kerslake, or as he is called in the House of Lords ‘bobby’ (assumption from my side). You see, he came up in an earlier blog, appointed as the Chair of King’s College Hospital NHS Foundation Trust. On February 17th 2016, in my blog article ‘Behind the smiling numbers‘, I wrote (at https://lawlordtobe.com/2016/02/17/behind-the-smiling-numbers/), “The title ‘Income tax must rise 3p to stop NHS ‘staggering from year to year’‘, which implies initially that the NHS needs £1.95m, which might be OK. Yet the truth is far from that, the text gives us that Lord Kerslake stated “Income tax will have to increase by at least 3p in the pound….”“, which is another story entirely (and first evidence that members of the House of Lords are gifted with a decent sense of humour)”, which came from a February article in the Guardian. Now when we consider The Royal College of Anaesthetists (www.rcoa.ac.uk), we see “Anaesthetists are qualified doctors who are registered with the General Medical Council (GMC). The first step towards a career as an anaesthetist is medical school. Undergraduate medical training normally lasts for five years and medical students normally graduate with a bachelor’s degree. After graduating, the newly qualified doctor enters foundation training in hospitals around the UK. Foundation training lasts two years and after the first year, trainees become fully registered medical practitioners. Through the second year of foundation year training, trainees apply for postgraduate training in one of the specialties, of which anaesthesia is one. Trainees can apply for the seven years anaesthesia programme or the eight years anaesthesia programme which includes two years of the Acute Care Common Stem (ACCS) programme. Trainees also have the option of completing dual Certificates of Completion of training (CCT) in anaesthesia and intensive care medicine. The dual CCT is similar in principle to achieving dual degrees and will normally take 8.5 years to complete“, so as we see staff shortages, as we see resource shortages, we also see something else, do we not? The quote from Lord Bobby, my apologies for this error, I meant Lord Kerslake, Baron Kerslake no less, it is my personal believe that harsher calls should have been made near a decade ago. In this former Prime Ministers Tony Blair, Gordon Brown and David Cameron should have made larger adjustments towards the NHS. Yes, we know that the Labour party bungled 11.2 billion pounds in that regard, but that was IT, staff is another matter and adjusting for those needs should have been done a long time ago. I have had an interest in becoming an anaesthetist a long time ago, if I had known the dire shortage then, I would have appealed and applied to Professor Peter Hutton in person in 2001. I might not have made it and unlikely I would have been able to do this, but I would have made the effort, a part I now see a failing Lord Kerslake with Lord Kerslake stated “Income tax will have to increase by at least 3p in the pound….“, I believe that if this is going to get saved, Prime Minister Theresa May will have to increase taxation to all working people by £1 every month as per January 1st 2016 and all pensions by £0.50 as per that same date. The treasury coffers will need to make a larger change, yet if anyone in House of Commons, the House of Lords or Parliament has any serious consideration to keep the NHS alive, that action is now needed. It is not unlikely that we will see a 2018 judicial public inquiry regarding the actions, practices, responsibilities and funding of the NHS. There is no telling which Lord Justice would be chosen, yet in these levels of failure, in these levels of events and the inhumane pressures that the medical profession is now under, brings a pain to my heart a lot more severe than a heart attack (I had more than one of those, so I know). The reason for all this is that there is a similar atmosphere all over the Commonwealth and if we want to prevent such a disaster in Australia, Canada and New Zealand, something needs to be done now.

The second article I mentioned was ‘NHS in crisis as cancer operations cancelled due to lack of beds‘ (at https://www.theguardian.com/society/2017/jan/14/health-service-in-crisis-cancer-ops-cancelled-nhs). The second line is the one that brings the beef to the table: ‘Hospital chief warns government must face the truth, as patients lose surgery dates with some only receiving one day’s notice‘, the question becomes how could this have come to such a dire place? You see, this is not just some refugee or illegal immigrant thing, this is what I personally see a categorical undermining of an essential support system. This is a basic view, but is my view incorrect? It can only be seen as such if there is a visible spike of 30%-45% of Cancer patients and I am fairly certain that actually newspapers did not make such a report. In this the quote “Today, writing for this newspaper, the chair of King’s College Hospital, London, Lord Kerslake, a former head of the civil service, suggests Theresa May’s government is not sufficiently in touch with the reality facing NHS hospitals and staff to appreciate the severity of the crisis“, in this I would respond is that Lord Kerslake left the needs of the NHS too shallow in his 3 pence required statement, perhaps I just got that wrong, but if I misread it, than who else did that very same thing? Yet there is another gem in this article and it is shown a little further down that piece. The quotes “Kerslake also sides with Simon Stevens, chief executive of NHS England, who last week questioned the prime minister’s claim about NHS funding“, “Dr Sarah Wollaston, chair of the Commons health select committee, criticised the government for blaming GPs for the crisis” as well as “She said in a tweet: “Pretty dismal stuff for govt to scapegoat GPs for very serious NHS pressures. Failure to understand the complexity or own responsibility.”“. So we have a few political fires going on and the fact that Prime Minister May reacted poorly is just one facet. The one that does matter is “failure to understand the complexity“, you see, it seemed to me for the longest of time that there was too much politicisation with the NHS, which is why I am referring to the essential need of a judicial public inquiry of the NHS. Why on earth has the NHS become so complex? Is that not a valid question too? In this world, is medical care and health care the one item on everyone’s agenda to keep that as simple as possible? In that, we see another part, in advance I will apologise for the upcoming ‘less’ civil words, but why the fuck is anyone handing over £340,000 to PwC? The headline from the Coventry Telegraph ‘Coventry and Warwickshire NHS chiefs fork out £340,000 for advice on how to SAVE money‘ (at http://www.coventrytelegraph.net/news/coventry-warwickshire-nhs-chiefs-fork-12436466), there is in addition a small part if each forked that over, or if this was a total amount. The fact that PwC, you know the ‘idiots’ involved in fallen places like Tesco and BHS, now they are advising the NHS? How much is that going to cost the tax payers after the initial fee that equals 13 annual incomes for most UK working citizens? The quote “The document, released in December, aims to address the need to bridge the local NHS funding gap of £267 million which will exist by 2020 if services stay the same in the region” gives rise to even more worry. Not only is the NHS a quarter of a billion short in roughly 1080 days in Coventry and Warwickshire, to survive they have to move? How will that aid the people in Coventry and Warwickshire? Will they end up with any health care at all, or will the local Romani Gypsies with oils and herbals need to be relied on? You think that I am exaggerating? If so, please feel free to inform me on how those two places Coventry and Warwickshire, with 340,000 and 550,000 people end up coming up short by £267,000,000 in three years? Well if advice comes at £343,000 on private consultants, that shortage might be reached rather quickly, but that is not the story is it? The story is how funding has failed and how much more it will fail over the next three years. So, as such, is my view as I personally see it of an essential judicial public inquiry that far-fetched?

In that part, the PwC will have more to explain. When we see: “The sum cannot be broken down as you request as the work was undertaken on a fixed fee basis but please note that the work was commissioned in line with government framework rates.”, what else was done, how many hours and what data was the advice based on? In addition we see that the payment to PWC LLP, who were commissioned by the STP member bodies to help to develop the STP between July and September 2016 (as quoted), so this Sustainability and Transformation Plan (STP) gives a solution, which involves:

  • University Hospitals Coventry and Warwickshire NHS Trust
  • South Warwickshire NHS Foundation Trust
  • George Eliot Hospital NHS Trust
  • Coventry and Warwickshire Partnership NHS Trust
  • NHS Coventry and Rugby Clinical Commissioning Group
  • NHS Warwickshire North Clinical Commissioning Group
  • NHS South Warwickshire Clinical Commissioning Group

It now becomes a question on where the trimming would need to be, more important if there is an upcoming shortage of a quarter of a billion, is there an oversight of what has been billed, what has been received and with three commissioning groups, should we fear what kind of a gravy train is running here. How many clinical commissioning groups are there in the West Midlands? If every county has one, how much in payments go into those clinical commissioning groups? These are all questions that are not heard by too many places. I think that there is an issue, I am not sure if what I am raising is an issue, but with only part of West Midlands, if they are short by a quarter of a billion, what shortages can we expect to see in Herefordshire, Shropshire and Staffordshire? Consider that the West-Midlands is around 5.8 million at present. Implying a lot, that part you should realise when 15% of a West Midlands is cause for a quarter of a billion in shortage, where is the rest of West Midlands at? Is that such a weird question? Even as there is absolutely no fault to the medical practitioners themselves, there is a fair bit of uncertainty regarding the governance of the medical profession and the governance of the NHS trusts. It is the scent of silence. In this I equally blame the Labour party as they did not change direction funding the NHS as it should have. Now, we know that the financial crises has hit everyone, this is a fact of life, yet the issue we see when the Guardian quote “saying that the real amount of extra cash being given to the NHS in England between 2014-15 and 2020-21 is only £6bn and even that much smaller sum has only come from cutting spending on public health programmes and medical education and training by £3.5bn” was given on October 31st 2016 also implies the partial pressure we see mounting. by cutting £3.5bn on medical education and training, we can see one headline, namely ‘NHS in crisis as cancer operations cancelled due to lack of beds‘ as it changes into ‘NHS in crisis as cancer operations cancelled due to lack of qualified surgical staff‘, when some of these specialists require 8 years of training, that view is not overly pessimistic, it is an actual reality that the UK could be facing from 2019 onwards, yet for how long cannot be predicted because the changes in policy are unknown and they will largely influence for how long this problem will continue, as well as it will continue to grow as a problem.

In light of this, perhaps a light hearted alternative? When we see the BBC (at http://www.bbc.com/news/uk-england-35121632), how long until politicians will consider: “Nearly 1,500,000 people were killed this year as part of the government’s NHS sustainability cull“. You see, if we do it to the badgers, how long until people are on a similar list to create convenience?

 

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An audited symphony in Green

twitterfeed_0101aThis all started yesterday when the honourable Mark George QC sent a tweet (see picture), which was followed by my answer, and that one was given because I was feeling frisky. When you are done killing people in Constantinople as Ezio Auditore, I relied on Twitter to see some of the news messages on the air. His was one of the first ones I saw.

Was he wrong, was I? At that point it did not matter, the image that is given was based on three different matters and they could very well be valid, so I decided to dig today and see what is exactly going on. The first thing I am noticing is how much emotions are going all over the place, it is all about the wealthy getting bashed. Now, this might not be wrong, but what is actually happening? First was the Week, who referred to an article in the Guardian, so I am looking at that one (at https://www.theguardian.com/business/2016/dec/21/sir-philip-green-bhs-mps-pension-schemes). The title is catchy enough ‘Sir Philip Green could face £1bn BHS fine under MPs’ plan‘, yet is this going anywhere? The first quote is “BHS collapsed into administration in April, leading to the loss of 11,000 jobs and leaving a £571m deficit. The regulator has started legal proceedings against Green and Dominic Chappell, the former owners of BHS, in an attempt to fill the deficit. They collected millions of pounds from the retailer“. You see, the issue behind all this goes a little further and of course, the red cloth of the bull became very visible. The Accountant Online (at http://www.theaccountant-online.com/features/comment-bhs-and-the-silence-of-the-auditors-4923573/) gives us the news that the Guardian was unwilling to give us here. When the Accountant gives us “The Accountant magazine professor Prem Sikka painstakingly analyses PwC’s role as auditor of UK failed retailer BHS“, so the same group of less capable reviewers (read: idiots) connected to the entire Tesco disaster are also linked to BHS? Can anyone explain to me why Pricewaterhouse Coopers is still accredited to work anywhere in the UK at present? The additional quote gives us “Recurring losses and negative equity should have encouraged auditors to issue an emphasis of matter type of audit report which might have alerted employees, pension scheme members, pension regulators and others of the possible inability of BHS to correct deficits, but PwC did no such thing“, is that not odd? The fact that everyone is in emotional state, including the one person that should feel the strike of shame too. You see the right honourable Frank Field, Labour MP for Birkenhead and Chairman of the Work and Pensions Select Committee makes no mention of the PwC side either. I find that very odd, the fact that such large companies do not get red flagged by the auditor should actually have been higher on his list than Philip Green was. So Frankie’s response in the Guardian on £1000 million instead of £350 million is (as I personally see it) merely a load of rubbish, something to set at ease the engine of anger from the 11,000 people without a job, because if he had actually cared PwC would have been on his list in that interview in massive 350 feet letters, sending shock-waves through that decrepit organisation of abacus users.

This is not nearly the end of it. When we look at the Guardian in November, We see (at https://www.theguardian.com/business/2016/nov/02/philip-green-may-be-forced-to-pay-money-into-bhs-pension-scheme) that Graham Ruddick and Kevin Rawlinson have more to say on the matter (at an earlier stage) as we see ‘Pensions Regulator begins legal proceedings against Sir Philip Green‘, still the PwC stays unmentioned. Is that not weird? When I see ‘regulator‘ and ‘legal proceedings‘ I see, in my mind, in equal measure the need to look at the books and at that point the auditors. You see a £571 million deficit should not have been unnoticed, more interestingly anything over £100 million should have instantly called for a pension check, the fact that the Accountant online gives us “Page 1 of BHS Limited 2011 accounts stated that “The directors believe that preparing the financial statements on the going concern basis is appropriate due to the continued financial support of the Company’s ultimate parent company Taveta Investments Limited”. This statement is repeated on page 1 of the 2012 and 2013 accounts. Page 1 of the 2014 accounts stated that “during the year, the company was a wholly owned subsidiary of Taveta Investments Limited“, this should have been more than one moment where the senior abacus users at PwC should have been ringing the bells of red flags, the quote “BHS and its controllers had persistently failed to eradicate pension scheme deficit. In the light of that why did PwC have confidence in management assertions that it would provide financial support to ensure that BHS would remain a going concern“, shows what I personally believe to be a massive level of negligence, one that at this point is missing from the Guardian and several other news media. Can anyone explain how PwC seems to be receiving this level of non-accountability? Is this the price of hiring cheap graduates in places where seniors need to work? So as we see the massive amounts of deficits in place, we see that “since 2009, PwC collected £2.282 million in audit fees and £9.04 million in consultancy fees from Taveta Investments Limited, which included BHS“, which gives me the fact that in total (including Tesco), PwC received £25 million for what I personally regard to be overly negligent, that whilst I over my life for being capable and overly service oriented have never received anywhere near 0.3% of that amount annually pre taxation. So we can state that whilst the emotional and feigned state of anger by Frank Field sounds nice, but it is merely charades and the man should remain quiet until he actually achieves anything in regards to the pension schemes.

Now let’s get back to the original part, because there is a lot more than PwC in this matter. The quote “As part of any deal, it is understood that Green wants the regulator to ensure that Chappell pays into the pension scheme as well. The billionaire tycoon believes he was misled by Chappell about his track record in business and the money that Retail Acquisitions was paid by BHS“, which can easily be rectified, because if this was done properly there would have been records, like mail messages with attachments (resume amongst others), there would have been reference checks with phone numbers and annual statements showing the track record of Dominic Chappell, who according to some is seen as a former racing driver lacking 100% of retail experience. I cannot vouch for that, yet simple investigation should be able to set that one straight in mere minutes. If Philip Green cannot show any mail messages with evidence, my message to him would be “If it isn’t written down, it does not exist“, one of the oldest golden rules in administration, I reckon a billionaire should know small things like that. In this there is a third side of the problem. This side comes in the form of Lesley Titcomb, who is the current Chief Executive and former COO of The Pensions Regulator (TPR), in the shape that “it was yet to receive “sufficiently credible and comprehensive offer” to bail out the BHS pension scheme, which has more than 20,000 members, despite Green pledging to fix the problems facing it“, she too remains mindlessly numb on any mention of PwC. A pension hole this big should have raised questions years ago. They all remain silent on the auditor which gives pause as to why the hell that firm is:

1: Allowed to be in business in the first place; and

2: Able to cash in on 25 million (including Tesco).

We see that continuation in “The regulator said that after a “complex investigation” and months of talks with Green about a rescue deal for the pension scheme it was sending warning notices to the billionaire tycoon, Chappell and their companies“, the auditor that facilitated for all this remains out of sight, out of mind and out of mention in all this. I have a massive problem with that part, especially as the Guardian has stated more than once to be such an ‘investigative entity‘.

In all this we now see the final part leading to the wise tweet that the honourable Mark George QC made and it makes him a lot more honourable than anything that the UK Labour party has to offer. In my view, I questioned whether the £580 had been a valid destination. The Guardian quote gives “Green controlled BHS between 2000 and 2015, during which time his family and other shareholders collected more than £580m“, so he did not get all the cash, so there is the smallest of discrepancies here on the statement of the Honourable Mark George QC, yet he only had 144 characters to make it. I would want to see 15 annual statements of all the payments towards the Green family and shareholders. Because in that regard, a firm that had a pension scheme in deficit for 11 years and negative equity for at least 7 years, how would it have been possible for shareholders to get anything at all, in addition, how much did Philip Green actually receive as payments from the BHS side of his businesses?

There is a growing list of concerns, concerns that should also be used against PwC, the TPR as well as HM Revenue & Customs. I think that it is safe to say that the days of ‘Walk softly and carry a beagle‘ (Charlie Brown) are over and we need to look at ‘Shout loudly and carry a machine gun with the safety off‘ (Rambo) as an actual deterrent for the non-actions of all these players. In addition, I think we need to put Lord Grabiner in the spotlight who was a former Chairman of both Taveta companies. You see, what Frankie Fields did carefully avoid to mention is that Lord Grabiner is linked to the Arcadia group, also owned by Taveta Investments, as is his family member Ian Grabiner, in all this Baron Grabiner might be seen as an academic administrator, but there is nothing academic about this half a billion pound mess and with Labour members remaining very silent on their peers, it seems that the 1 billion pound levy threat is merely a hollow action giving the implied value of £0 towards Frank Fields and his valued point of view, especially when we look at a non-actioned and non-mentioned gap of 11. One person (@the_MourningSun) gave me the answer to my tweet that this was down to a difference between the letter and the spirit of the law. I think both have failed miserably for well over half a decade when the larger players get to play the game the way that the BHS was played. In the end, it will be for a court to decide whether Philip Green broke any laws or failed anyone he cares for (read: implied view he only cares for himself). What is overly clear is that too many parties are leaving the auditors in the shadows, away from the peering and prying eyes of the public, which is a massive failure on every level.

So as you think that the TPR is currently on the ball, you all better take notice of the Guardian quote “By the standard measure used by the PPF, 4,272 defined benefit schemes are in deficit and the size of the black hole is £195bn“, so as we see that part, I wonder when we get a list of those 4000+ schemes, who is auditing them. I wonder when we look at 2 pie charts, one based on the deficit amount against the auditors involved, and one based on the number of schemes against the auditors involved. I wonder which auditor will end up being the most prominent one. Would you like to hazard a guess?

Let’s see if we can revisit this part somewhere this quarter and see how many spins the media and Lesley Titcomb (Executive Officer TPR) will end up doing.

 

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