Thursday, 25 March 2010

Jarvis into administration - seeing the future

Jarvis, best known as a rail maintenance company and for being chaired by Steve Norris the fomer Tory transport secretary has gone into administation.

It's a recession and we expect companies to struggle and jarvis has been in the 'difficult' category ever since its plunge into PFI contracts which it never managed to make profitable.

However, now administration has been driven by a fall off in work from network rail. Network Rail had begun some major cuts last year; indeed these have led to strike action  - which are on quite strong ground about safety rather than pay for once from Bob Crow!

There are many threads here that we will see over again in the next few years in the UK:

1) State body makes random cuts (Network Rail is responsible to no one, even though it is state owned, in effect it is its own Quango), roundly condemned as the wrong choices.
2) Private sector contractors get first hit as they don't strike
3) Public sector workers then go on strike.
4) Services fall and economic loss is suffered all round.

We have to have cuts and less spending becuase we have run out of money, but it is all going to get very messy and interestingly the private sector will suffer more do to the logic of Government spending (i.e. the last to go are the actual civil service jobs which have the best perks like pensions)


Jonathan said...

And due to this opaque link between government spending and the private sector, there will be plenty of left wingers claiming that it all shows the strength of the public sector and that all these private companies should be privatised.

Its like we're back at the start of the 70's.

CityUnslicker said...

agree - shite ain't it?