Daniel Wilkins  www.exmouthjournal.co.uk 

A possible case of coronavirus at East Devon District Council has forced the closure of the authority’s headquarters.

Blackdown House was closed to the public at noon today (Friday, March 6) as a precautionary measure after a possible case of Coronavirus was identified in a member of staff who was returning from a high-risk country.

The district council said it will continue to provide services and apologises for any inconvenience caused.

An EDDC spokesman said: “They are displaying potential symptoms and although the risk is very low, we are taking the correct measures.

“All members of staff have been sent home and the majority will be able to continue working remotely.

“The offices will be thoroughly cleansed, according to recommended guidelines, over the weekend and we anticipate reopening early next week.”

More information and advice on Coronavirus (COVID-19) can be found on the Gov.uk website

George Osbourne’s austerity programme was aimed not only at balancing the books but in shrinking the state. His toxic legacy has left a hollowed out civil service unable to cope with unexpected events. Boris Johnson has made a bad situation worse by centralising decision making in his group of “weirdos”. Inability to act decisively has become apparent. Compare UK slowness to repatriate people first from China then Japan. Now we see paralysis to deal with the effect of the collapse of Flybe on regional connectivity, not just from Exeter, but across small regional airports in UK. Nils Prately puts it succinctly:

Nils Pratley, Financial editor, The Guardian Business View 6 march 2020

No soft landing

The easy part for the government was refusing Flybe’s request for a £100M loan. The Connect consortium that owned Flybe – Virgin Atlantic, Stobart Air and the US hedge fund Cyrus Capital – had only woolly investment intentions. It was puzzling how the terms of any loan could qualify as “commercial” if no commercial lender was willing to step in. The spread of the coronavirus might quickly have made £100m an inadequate sticking-plaster, as argued here yesterday. Ministers had little choice.

But there is still a big job to be done – minimising the fallout from Flybe’s failure. On that score, the new aviation minister, Kelly Tolhurst, came to the Commons bearing only good intentions. The government “stands ready” to help regional airport and regional connectivity, she said.

Come on, the government has had seven weeks to prepare for Flybe’s demise. Many routes will be picked up by other airlines, but not all. By now one would expect ministers to have decided which of the marginal routes will be protected via public service obligation subsidies, as already applied to Flybe’s London-Newquay operation.

Details, it seems, will follow in the “regional air connectivity review” commissioned in January. The government needs to step up the pace. There is an obvious danger of a domino effect in which regional airports are thrown into financial crisis after the disappearance of their largest customer. The way to address that is not by “standing ready”. It’s by making some decisions, sharpish.

Owl has already posted the history of how this project, conceived at the beginning of the century as the “Iconic” building that would do for Exmouth what the Tate has done for St Ives, has been dogged by failure. You, the  Council Tax payer have now bought it at the full asking price.

Meanwhile EDDC plans to double down on its success with further seafront regeneration!

Are Council Tax payers the buyer of last resort if it all goes wrong again?

Daniel Wilkins  www.exmouthjournal.co.uk

A prominent entertainment destination on Exmouth seafront has been purchased by the district council.

East Devon District Council has confirmed it has completed a deal for Ocean, in The Esplanade, and announced LED Leisure Management Ltd will continue to run the facility and pay rent to its new landowner.

The authority completed the £2.7million purchase using funds from a £20million commercial investment fund.

This acquisition is the first EDDC has made using this fund, designed to generate £450,000 per year to support council services and activities moving forward.

The council said this will help address future budget challenges for the council.

Cllr Geoff Pook, portfolio holder for asset management, said: “Investment in this and other properties over the next few years will help the council towards financial self-sufficiency along with giving the council a further and direct stake in the growth, prosperity and place making aspirations across East Devon.”

Good news. Axminster Carpets has been bought out of administration by a group of investors which includes former owners. 

Owl wishes them well and hopes they have learned the lessons from the previous failure.

https://www.bbc.co.uk/news/business-51758433

Axminster Carpets has been bought out of administration by a group of investors which includes former owners.

The royal warrant holder was bought by ACL Carpets, which will change its name to Axminster Carpets in the near future, administrators said.

The company went into administration on 19 February, and 80 jobs were then lost.

The business had built up debts of nearly £8m, but is now debt free, Axminster Carpets said.

The Dutfield family, which controlled the company until 2016, is part of the group of investors.

The company will continue to operate from its head office and manufacturing facility in Axminster.

Robert Day, who led the private investors, said: “The business has never been in a better position to again become a significant player in the sector.”

Joint administrator Benjamin Wiles, of Duff & Phelps, said: “We are absolutely delighted to be able to announce today that we have secured the future of Axminster Carpets, one of the best-known British brands, following the successful sale of the business and assets of the company.”

Axminster Carpets was previously rescued in 2013. It had gone into administration, also overseen by Duff & Phelps, but was bought out by a consortium led by private investor Stephen Boyd. `

The firm lost about 300 of 400 jobs at the time. It had been one of Devon’s largest private employers. 

Owl remembers when Axminster Carpets went into administration in 2013

www.independent.co.uk   21 February 2013 

Axminster Carpets has signalled its fortunes were unravelling rapidly after it filed an administration notice, leaving 400 jobs hanging by the proverbial thread.

The carpet maker, based in the eponymous Devon town, now has a moratorium of 10 working days’ protection from its creditors to stitch together a rescue package after it filed a notice of intention to appoint the advisory firm Duff & Phelps as administrator.

Joshua Dutfield, the managing director at Axminster Carpets, said: “Trading has been difficult and the management has been working with key suppliers, creditors and the lenders in an attempt to resolve the company’s financial difficulties.

“We continue to be committed to working to achieve the best-possible outcome for all concerned and most importantly the staff and suppliers.”

Before its financial crisis struck, Axminster Carpets nearly doubled its profits to £415,000 over the year to December 2010, on flat revenues of £32.7m, according to its latest accounts. Perhaps worryingly, its shareholders paid themselves a dividend of £500,000 that year.

The airline’s pension scheme is registered in the Isle of Man – meaning its members aren’t protected by the lifeboat fund

By Jessica Beard, PENSIONS REPORTER www.telegraph.co.uk

The collapse of regional airline Flybe has put more than a thousand savers at risk of losing their pension money.

Members of Flybe’s pension scheme stand to take a heavy financial blow as they are not protected by the UK’s lifeboat scheme, the Pension Protection Fund (PPF). 

The 1,350 people are not entitled to compensation because the British Regional Airlines Group Pension Scheme is not registered in Britain but in the Isle of Man. 

This means the scheme does not qualify for protection from the PPF, which is a statutory fund that was set up to guarantee that pension scheme members can retain a large portion of their savings in the case that a business ceases operations. 

The pension scheme owes more than £170m in retirement benefits to its members, according to a breakdown given at the firm’s year-end in 2017. However, the entire liability could be wiped out since Flybe has entered administration. In November 2018, Flybe had a pension shortfall of £11.6m. 

Dan Mindel, of covenant adviser Lincoln Pensions, said there are a number of “final salary”, also known as “defined benefit”, pension schemes that do not fall into the PPF net. 

He said: “At least with the PPF there’s a floor as to what their pension would be. In circumstances where there’s protection and there is a shortfall, there is no floor. It looks like the scheme is underfunded currently and how much people will receive depends on if Flybe gets funding back from administration, which seems unlikely.”

Warnings that Flybe pensioners could face financial ruin were made in February last year, amid concerns that the takeover bid made by Virgin would fail. 

People in the scheme should contact the trustees, Mr Mindel said, as there is going to be a period of uncertainty. 

Those who are currently retired and receiving their pensions are likely to be prioritised over those who are not yet withdrawing, he added.  

The ailing airline became the first British business to be forced into administration as a result of the coronavirus, after a government rescue bid fell through. 

Flybe cancelled all flights after the last plane landed yesterday evening, ruining travel plans for all of its passengers. 

The carrier had about nine million passengers annually and is owned by billionaire Sir Richard Branson’s Virgin Atlantic, as well as by shareholders Cyrus Capital and Stobart Group.

Brought down by coronavirus? Well, hardly. Chronic mismanagement and greedy owners, more like. Covid-19 might have dealt the final blow to Flybe. But it’ll be no consolation to the airline’s 2,400 staff that its minted shareholders had the financial fuel to keep it flying.

Alistair Osborne  www.thetimes.co.uk

They just didn’t want to put any money in. And, in a sense, who can blame them: an ownership trio starring Sir Richard Branson’s Virgin Atlantic and the UK-listed Stobart, each with 30 per cent, plus New York hedge fund Cyrus Capital, the holder of the rest. But to let the carrier keel over just a year after they bought it? Call it an unlucky takeover if you like. But cynical would be a better word.

They knew Flybe was a financial black hole with wings: floated at 290p a share in 2010, bought in February last year for just 1p a share, or £2.8 million. And, even during the bid, the acquiring trio showed their colours. For months, they messed around Flybe’s management with mooted offers as separate bidders. Then, with the airline running out of cash, they joined forces, cut the price by more than nine-tenths and made a take-it-or-leave-it rescue bid. When Flybe’s furious shareholders protested, they dodged round them and re-cut the deal to buy the assets out of the holding company. Nice work.

Still, all of that might have been forgiven if they’d made any effort to deliver on their promise to “provide a strong foundation to secure the long-term future of Flybe”. They pledged to “deliver more choice to customers”, rebranding Flybe “under the Virgin Atlantic brand” and incorporating its feeder services into Virgin’s “extensive long-haul network”. And they claim to have invested “more than £135 million”.

Reality tells a different story. As Stobart admitted, once Flybe had failed, the cash hit on its investment was just £7 million. The rest of its contribution was its fledgling airline Stobart Air and its aircraft leasing wing, ludicrously valued at £43.3 million — or about five times what they’re worth. The owners have routinely failed to admit how much cash actually went in.

In fact, each investor had different reasons for buying Flybe. Stobart wanted an outrageous price for its aviation assets and more traffic through its Southend airport: one reason it was about to add Flybe flights to Jersey and Belfast, even though the airline flew the same services from London City. Virgin’s chief interest was nine pairs of lucrative slots at Heathrow — scandalously switching the taxpayer-subsidised Newquay service to Gatwick to free up four of the slots. And Cyrus wanted a quick flip — even if no windfall to match the $1.4 billion it shared with Branson from selling Virgin America.

All wanted as little financial risk as possible, underlined by them instantly taking charges over Flybe’s assets — or at least those that couldn’t fly off. Lessors had security over most of the 67 turboprops, but anything unencumbered was divvied up. Companies House filings show that “clear and distinctive” labels were affixed to all kit valued “in excess of £10,000”.

Nowhere was there a viable business plan, requiring cost and route cuts. Or the promised rebranding that involved hard cash. No wonder credit card companies held back £50 million of passenger fares. Who’d release money to this business?

And then, when cashing in on Flybe turned out to be trickier than thought, the owners demanded a taxpayer bailout — pretty demeaning for the Necker island knight, apparently worth £4 billion. Or Virgin Atlantic’s co-owner Delta Air Lines, valued at $30 billion. Or Cyrus boss, Stephen Freidheim, managing $4 billion of funds and the owner of a Manhattan penthouse.

Yes, they persuaded ministers to give them a £10 million holiday on air passenger duty. But a £100 million soft loan when they’d patently failed to invest enough themselves or produce the promised turnaround plan? No big surprise new chancellor Rishi Sunak saw through that. As British Airways-owner IAG put it: if Flybe’s “wealthy shareholders didn’t wish to fund its survival, it would have been preposterous for the government to do so”. You don’t need coronavirus to tell you that.