Allow me to explain this Polly

What exactly does \”bankruptcy\” mean anyway, in an NHS paid for by taxes where no service can go to the wall like Woolworths?

It means that the management who have fucked up get turfed out.

Woolworths did indeed go bust. But we didn\’t then start dynamiting the buildings the moment the receiver was appointed. When a hospital goes bust we\’ll similarly not tear the place down. New management will be found to run those very valuable assets.

That\’s what bankruptcy is. A method of getting assets out of the hands of those who manage them badly and into the hands of those who do it well.

5 comments on “Allow me to explain this Polly

  1. In theory, yes. But in practise the official receiver frequently finds a way to put the assets back into the hands of the person who fucked up at rock bottom prices, without letting anyone else in with a chance.

  2. You’re missing her point completely. For a chain of shops, or a newspaper, or a private hospital provider, bankruptcy does exactly as you suggest (subject to the prepack recieverships David mentions).

    Southern Cross is a good example of the bankruptcy system working very well for private care provision: no oldies got turfed out onto the street, but the shareholders lost everything and the creditors took a haircut.

    But here, we’re talking about one arm of the government owing money to another arm of the government, being bankrupted by itself, paying adminstrators gbp200 an hour to tell itself how to be less bankrupted, and ultimately handed back to the government in some form or other, with more or less the same people in charge.

    It has the legal form of a real bankruptcy, but none of the substance and none of the benefits.

  3. That’s what bankruptcy is. A method of getting assets out of the hands of those who manage them badly and into the hands of those who do it well.

    But sometimes those who take over the management of the assets will take the view that the best course of action is to liquidate those assets and close down the entire operation. But that would not be politically possible in the case of a hospital, not to mention the impact that this would have on local healthcare.

  4. More telling than her profound ignorance of the realities of bankruptcy is the final paragraph (which Tim you omitted to notice) where she lauds Andy Burnham’s Green paper which effectively turns the NHS into the coalmining industry circa 1973. I’m assuming in her warped mind, this is the template for all industries across the Uk (only then can fairness be ensured)

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