British Gas shares plummet – CEO’s salary soars

“The boss of Centrica [formerly British Gas] is fighting for his job as investors lose faith in his leadership.

Iain Conn has been chief executive of the British Gas owner since 2015 – picking up £11.1 million in pay along the way.

But the FTSE 100 group’s shares have tumbled 60 per cent on his watch and are at their lowest level since 1999.

The father-of-three’s position is seen as particularly vulnerable since the arrival of Charles Berry, who succeeded Rick Haythornthwaite as chairman in February. …

Conn has also attracted the ire of retail investors who have seen the value of their savings plummet from 279p a share when he took over in 2015 to 109.05p at the close of business yesterday.

The slump has slashed Centrica’s value from £15.9 billion to £6.2 billion.

The backlash among shareholders comes a week after it emerged that Conn, 56, enjoyed a 44 per cent pay rise to £2.4million in 2018.

The rise of £740,000 covered a year when British Gas hiked bills for millions of families and saw 742,000 customers leave. …

Centrica this month announced another 500 jobs are at risk – 400 of which are based in Glasgow –- as part of the company’s plan to cut 2,000 jobs this year. It has axed 7,700 jobs since 2015.

Centrica declined to comment last night. …”

https://www.thisismoney.co.uk/money/markets/article-6925171/British-Gas-boss-fights-job-Iain-Conn-fire-shares-hit-20-year-low.html

“Revealed: Collapsed private provider to the NHS owes £11m”

“A patient transport company which collapsed after it withdrew from a key NHS contract owes more than £11m, including to the NHS, statements filed with Companies House have revealed.

Liquidators winding up Coperforma have found just a few thousand pounds in the company’s bank accounts. But the papers also showed the company owes £11.3m to unsecured creditors, including NHS organisations and suppliers of ambulances and staff.

Clinical commissioning groups in Sussex – where Coperforma won a patient transport service contract in 2016 – have claimed the company owes them £7.6m. In a statement, the county’s CCGs said: “The Sussex CCGs are actively pursuing all options to maximise recovery for the NHS of costs incurred as a result of the failure of the patient transport service contract.

“In particular, the CCGs are pursuing legal recovery against an associated party of Coperforma which provided a parent company guarantee. The CCG is currently unable to publicly give more details for legal reasons.”

Companies House lists Guernsey-based Seabourn Ltd as a “person with significant control” in Coperforma.

Coperforma claims instead that the CCGs owe it nearly £2.5m, although the documents lodged at Companies House showed the liquidators and their solicitors felt “there was not sufficient evidence to progress recovery”. The CCGs’ claim could be offset against this, it was suggested. This could still leave the CCGs owed more than £5m.

The liquidators are also investigating “potential antecedent transactions” involving the firm, although they will not say who was involved in this. These transactions normally involve the transfer of money out of a firm before it becomes insolvent.

Earlier documents, from just after the company went into administration in early 2018, suggested it had assets of around £400,000, excluding the money it said it was owed by the CCGs. It also owed £377,449 to “trade and expense creditors”.

Coperforma took over the Sussex PTS contract in April 2016, having been the only bidder for a contract which split the transport side of the service from the scheduling of ambulances. It struggled to deliver the service, with many patients arriving late for appointments or being left in hospital. Two of its subcontractors went into administration and the CCG had to pay some staff wages to make sure the service kept going.

Following growing complaints from commissioners and patients and a critical Care Quality Commission report, the company abandoned the £16m a year contract in November 2016. It was handed to South Central Ambulance Service Foundation Trust.

The Sussex CCGs involved were Eastbourne, Hailsham and Seaford; Hastings and Rother; Brighton and Hove; Coastal West Sussex; Horsham and Mid Sussex; Crawley; and High Weald Lewes Havens, which led on the PTS procurement.”

https://www.hsj.co.uk/finance-and-efficiency/revealed-collapsed-private-provider-to-the-nhs-owes-11m/7024800.article?

Much cheaper water bills in south west – thanks to Jeremy Corbyn!

Threatened with nationalisation, South West Water cuts bills by 15% – interesting!

“Under threat of nationalisation from a putative Jeremy Corbyn-led Labour government, Britain’s three listed water companies have agreed to the largest cuts in customer bills since privatisation by Margaret Thatcher 30 years ago.

The reductions will mean that households in the West Country will pay 15 per cent less at 2019 prices over the next five years. In the northwest of England, bills will fall by 11 per cent before inflation.

While the inflation link in water charges will mean bills will fall by less, new penalties for missing environmental and operational targets could mean suppliers having to cut household charges by even more as a means of compensating their communities.

Of the 17 water companies in England and Wales, three have made a fast-track agreement with Ofwat, the regulator, to set customer charges from April 2020 to March 2025.

The other 14 suppliers have been given a must-do-better notice by Ofwat. Having been told by the regulator to resubmit their plans and make them more ambitious, the 14 will be told by Ofwat in July whether their revised proposals are acceptable.

As there is no competition in the supply of water to households, the 17 suppliers are all local monopolies and as such are tightly regulated by Ofwat. However, critics of the regulatory regime, including MPs on both sides of the House of Commons, have argued that Ofwat has for too long allowed suppliers to put up prices without investing enough in, for instance, stopping leaks, which in some areas lead to 25 per cent of the treated water in the mains system going missing.

The three suppliers who have been fast-tracked by Ofwat for presenting credible business plans for the 2020-25 price review are, coincidentally, the three remaining stock market-quoted water companies: United Utilities, formerly known as North West Water, which serves 3 million homes from Cheshire to the Scottish border; Severn Trent, which serves 4.3 million customers in the Midlands; and South West Water, which supplies 1.8 million people in the West Country and is a subsidiary of Pennon Group.

Household customers of South West Water have long had the largest bills in the country. Ofwat has agreed with the group that those bills will fall before inflation by 15 per cent, or £77, from this year’s £527 average to £450.

However, South West Water has also agreed with Ofwat that if it does not clean up its act with the Environment Agency — it is the most regularly fined for pollution incidents — then it could face further cuts to the charges it makes.

United Utilities has agreed to a £49, or 11 per cent, cut in bills over the next five years but has been told it will have to cut charges more if it does not hit targets to reduce its leaks by 20 per cent.

Severn Trent is to cut bills by 5 per cent, or £16, over the five years. It has committed to more than halving the average time its customers are without water every year or face penalties.

Under Ofwat’s rules, bills will go up every year in line with CPIH, the consumer price index that includes housing costs, now running at 1.8 per cent.

The suppliers’ charges will get final clearance in December. David Black, the Ofwat director in charge of the process, said: “Our draft decisions for these companies show that investment in service and infrastructure can go hand in hand with more affordable bills.”

Source: The Times (pay wall)

Privatisation the Virgin way

Virgin has many privatised contracts with the NHS. Is there any reason to believe his companies will treat the NHS any differently to the way they treat what used to be our railways?

“Sir Richard Branson will have taken at least £306m in dividends from Virgin Trains by the time the firm’s 22-year tenure as a rail operator comes to an end within the next 12 months.

Branson said on Wednesday the Virgin name could disappear from trains by November, after its joint venture partner, Stagecoach, was blocked from three franchises by the Department for Transport over its refusal to pay more into rail staff pensions.

Analysis by the Guardian indicates that Virgin Rail Group Holdings, the joint venture company, will have collected at least £600m since its launch in 1997, a figure that drew criticism from Labour. …

The final total is likely to be higher once this year’s dividend is declared when the company’s next set of annual accounts is published in October next year.

Branson’s Virgin Group owns 51% of the venture, giving him a £306m share of the overall dividend pot.

The remaining £294m was allocated to the Stagecoach transport group, whose largest shareholder is the Scottish businessman and Scottish National party donor Brian Souter, together with his sister, Ann Gloag.

The highest dividend in a single year was paid in 2009, when Virgin Trains paid out nearly £95m. The figure has hovered around £50m over the past three years.

Andy McDonald, the shadow transport secretary, said: “This money could and should have been used to invest in services and hold fares down, not siphoned off by shareholders.

“The railway should be run as a public service in public ownership. Instead, absurdly, its run in the financial interest of foreign state-owned companies and billionaires such as Richard Branson. If Virgin disappears from the railway as Branson warns, it won’t be missed by taxpayers or passengers. …””

https://www.theguardian.com/business/2019/apr/11/richard-branson-earned-300m-virgin-rail-franchises?

Stagecoach rail franchise in pensions row

Owl says: Stagecoach has a near monopoly on bus routes in the Exeter commuter and rural hinterland – hoping the bus franchise is healthier.

But just another privatisation cash grab.

“Stagecoach says it is “extremely concerned” after the Department for Transport (DfT) barred it from three UK rail franchise bids.

The DfT says the bids for the East Midlands, South Eastern and West Coast franchises were “non-compliant” because they did not meet pensions rules.
Martin Griffiths, chief executive of Scotland-based Stagecoach, has called for an “urgent meeting” with the DfT.

Stagecoach had “repeatedly ignored established rules”, the DfT said.
Mr Griffiths said in a statement: “We are extremely concerned at both the DfT’s decision and its timing. The department has had full knowledge of these bids for a lengthy period and we are seeking an urgent meeting to discuss our significant concerns.”

Bidders for the franchises have been asked to bear full long-term funding risk on relevant sections of the Railways Pension Scheme, Stagecoach said. The Pensions Regulator has estimated the UK rail industry needs an additional £5-6bn to plug the pensions shortfall, and the company said it was being asked to take on risks it “cannot control and manage”. …”

https://www.bbc.co.uk/news/business-47877858

Gigaclear rural broadband project – paused probably for many months

From the blog of DCC Independent Councillor Claire Wright:

“There has been a delay now for sometime in Devon on the implementation of fibre to the home broadband. This means individual connections from the fibre cables in the road to each house.

A huge operation that was started by BT and in the past two years or so, operated by Gigaclear under the management of Connecting Devon and Somerset (Devon and Somerset County Councils).

Unfortunately, the timetable has slipped last autumn, partly due to the collapse of Carillion (Gigaclear were partners with a Carillion subsidiary engineering company) and partly due to the enormity of the Devon operation and road layouts.

One of the problems has been traditional Devon banks which have apparently been a challenge as the company usually digs up grass verges to install cables. Devon banks are also (quite rightly) protected under planning policy.

Connecting Devon and Somerset have had to apply for a funding extension from the government to allow for the extension of this work. This has been agreed in principle but won’t be endorsed nor the money received until the next comprehensive spending review later this year.

So without the firm confirmation contract extension funding and other logistical issues, there is still a delay of an unknown number of months.

This is deeply disappointing indeed and incredibly frustrating for communities such as Aylesbeare which doesn’t even have superfast broadband so residents are putting up with speeds of less than one megabit. I’m also aware that there are people living on the edges of communities who also have poor broadband service.

For residents and communities frustrated at the lack of connectivity there are other options, such as a voucher scheme to offset the cost of roof aerials for individual properties. For a bigger scheme involving whole communities, telecommunications companies can quote for a village service.

There are no easy solutions at the moment unfortunately and this is deeply frustrating for me and for many people in my ward.

Please email me if you have any questions at claire@claire-wright.org

I will update you when I know more.”

http://www.claire-wright.org/index.php/post/fibre_to_home_broadband_delayed_for_an_unknown_number_of_months

“G4S stripped of contract to run HMP Birmingham as government takes violent jail back under public control”

“A privatised prison marred by riots, drugs, suicides, violence and “appalling” conditions has been taken back under permanent government control.

The Ministry of Justice cancelled G4S’s contract to run HMP Birmingham, months after seizing temporary charge of the jail following an “urgent notification”.

Officials denied the unprecedented move was a “public versus private sector issue”, but critics claimed years of warnings over outsourcing prisons had been vindicated. …”

https://www.independent.co.uk/news/uk/home-news/hmp-birmingham-g4s-contract-government-public-control-a8849751.html