Mouchel chairman Bo Lerenius said: "Our balance sheet is stretched and we need to do something."
Try stamping your foot and shouting very loudly, "OH BUGGER!!!"
Earlier this year rivals Interserve and Costain who had been considering a takeover bid for Mouchel walked away after studying the company's books. I think that was probably a good enough hint that all was not well.
Christopher Bamberry a financial analyst said the profit shortfall "would probably leave the company in breach of a banking covenant." He added that concerns over customer confidence cast doubts over Mouchel's ability to win and retain work. "It's hard to see how a rights issue can be avoided," he said. Who in their right mind would take up a rights issue after this sorry tale of woe and in light of the current spending cuts? Two other services groups, Connaught and ROK, reliant on government contracts collapsed into administration in the last year.
SO! This is the outfit running most of our town, with our money. It don't look good do it? Now you see why Mouchel had to close their Liverpool office and move the remnants of staff to Oldham where we are probably providing free accommodation for them.
Just take a look at the first line again folks - £300,000,000 for a twelve year partnership. £300m of our money leaving the town without so much as a last good-bye!
Why are we throwing all this money at a bunch of tossers from dahn sarff who can't even keep their own affairs in order? Why are we paying a bunch of outsiders to do something we've already paid for?
If we are employing all these people to run the services that we ran so ably at one time, what are the people who used to do that job in the labyrinthine corridors of OMBC doing now? Do they while away the hours reading Mystic Meg in the Sun. Do they sit entranced as the odious Battye regales them with fairy stories? Do they gaze in wonder at the acres of Axminster in Little Jimmy's den? Are they put to work polishing the solid gold fittings in Avarice Hall, site of Charlie's palatial HQ? OR? And here's a novel thought. Do we pay them to sit around doing nowt all day?
If Mouchel succumb in the dwindling market, the result for Oldham will be catastrophic! You can bet we have no fall-back plan to keep the town moving, Lie-bour don't believe in planning for the future. If they did maybe we wouldn't be involved with the 'Unity Parasites.'
It's bloody amazing ain't it? Every time we fall in the shite....we come up smelling of shit!
You think things are bad now?? As they say; "You ain't seen nothing yet!"
ADOPT THE BRACE POSITION FOLKS!
Cause for concern, certainly, but bear in mind that there's another side to the coin: one reason Mouchel is doing badly is that it messed up in pricing contracts, so the services Oldham is receiving are probably costing less that the council could have paid to a different contractor.
ReplyDeleteAnd don't delude yourself that the £300m is just 'leaving the town without so much as a last goodbye' - all the services the public expect cost money to deliver (mainly to pay the wages of the local workers who deliver them, regardless of whether they're directly employed by the council or by a contractor like Mouchel).
Ultimately it comes down to whether we want to have lower council tax bills and fewer services or to keep the services and pay for them. If you object to the £300m, presumably you're in the former camp.
...Anon you say one reason Mouchel is doing badly is that they 'messed up' in pricing contracts. But this is their chosen profession, their raison d'etre. If they cannot run their own business successfully why the hell are we trusting them with ours?
ReplyDeleteAgreed all services cost money to deliver. We used to be able to deliver them with the talent WE employed within the council. Why do we now need to use a middleman to do it? Even if they are utilising all local labour they are receiving a fee for the service. This is another tier that we never used to have.
Scrutinise OMBC accounts. Do you see huge surpluses raised by Mouchel? Do you see any savings whatsoever? Do you see any improvement in performance since we sold out to Unity Partnership? Services, facilities, amenities deteriorate year on year while complaints about them increase exponentially.
We ask again. Where are the people who used to fill the positions taken over by Mouchel? Are they lost to us? If so what will the likely outcome be if/when Mouchel crash and we have no employees with the necessary skill sets to keep the town operating? Oldham Council in following this path is admitting it has no idea on how to operate and deliver the services needed to keep the town afloat.
You ask if we want lower council tax and fewer services or keep the services and pay for them. We now have far fewer services and the highest council tax in GM. We would love to, not keep, but dramatically increase and improve services but we are never going to be able to afford to pay for them while the current system and the incompetents administrating it, waste so much of OUR money.
Which is the main reason we object to the £300m to Mouchel. Why can we not run our own affairs. If we have 300m to hand out use it to employ better people in house. Get rid of the top-heavy departments who just keep muddling through.
Let's imagine, Anon, you are the owner of a company Anonnimice Plc, which has developed a revolutionary new computer mouse. All aspects of production, marketing and sales are carried out in-house. Sales are constant at about 2m units p.a. Each unit costs out at £3.50 to produce and they sell for £5 each. This gives a gross turnover/profit of £10m and £3m respectively. Each year overheads eat up £1.5m and a sum of £1m is re-invested in the company to keep your product cutting edge and to finance future plans. This leaves you with a nice income of £500k.
ReplyDeleteKNOCK, KNOCK! Who is it?
Hello, we are a services provider who can improve your efficiency and increase profits. Our name is Mousehole.
We have done some costings on your business and we are confident we can produce Anonnimice for £2.50 per unit and push sales up to 2.5m units p.a. Our fees will only amount to 50p for each unit.
Oooh! goody you think. An extra £2m profit coming in. This will enable us to expand our operations. Based on these figures you snatch the contract from Mousehole and sign up for 10years at £1.25m p.a.
Mousehole bring in their own staff and your once loyal team members slope off to rival companies or the Job Centre.
All seems to be going swimmingly until at the end of year 3 you notice production has fallen off. Mousehole explain this is because they outsourced design and production to a new-start company in Panama that had promised huge savings.
Year 4. Sales slump alarmingly. The sales manager, who spent all his career in anthracite sales has taken on a motley crew of sales persons including several previously unemployable 'NEETS' from the dole queue. Between them they couldn't sell a free meal to Howie Sykes.
Year 5. Just barely break even. Reserves are dwindling as they are used to cover day to day costs. Mousehole unconcerned as they are still drawing their contract fee and they make sure they are first in the queue.
Years 6 and 7. Major losses recorded as sales plummet and production costs soar to try and rectify faults caused by unskilled labour in Nicaragua to where production was transferred in an effort to cut costs. Panamanian company successfully sues for breach of contract and is awarded a large settlement.
Year 8. production ceases. Insufficient funds to continue trading. Mousehole still claiming their contract payments.
A petition by the Inland Revenue forces firm into administration . Business is liquidated. You have personally become liable for several large sums and are declared bankrupt.
Chinese company buys patent for Anonnimice for peanuts and starts up full scale production. Product becomes world wide success once again but now sells for £2.50 per unit. Generates huge profits.
Mousehole also now in liquidation. Blames it on 'some risky contracts'
Answer Honestly:-
a) Are you glad you got involved with Mousehole?
b) Before Mousehole was the job under control, was life easier and were you solvent?
c) What did Mousehole provide that you were lacking?
d) Were Mousehole value for money and did they have the expertise necessary to make a success of this venture?
e) Would you employ Mousehole on any of your projects in the future and would you recommend Mousehole to any other business?
f) Whatever possessed you to do this?