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Post by Equivocal on Feb 22, 2024 12:28:05 GMT
Put simply, the provision for the loss is calculated on the basis of the rate of claims and reversal of convictions, then discounted for future value. The faster compensation payments are made the larger the provision.
You will have noted the caveats regarding government funding, for example:
At this point intime, it is not possible to accurately estimate the potential liability that may arise as a result of this process. The
Government has announced its intention to support the Group with funding to cover the cost of compensation for Postmasters affected however the funding is subject to compliance with subsidy control requirements, including referral to the SAU under the Subsidy Control Act 2022.
Yes, but compliance with that act applies to all Government funding of the Post Office - not just compensation payments. As a state enterprise of course the Government is responsible for any losses incurred. The extent of the loss was calculated based on the rate of compensation payments and the rate at which convictions were overturned (per the accounts). It must follow that the financial position of the Post Office (and the extent to which Government liabilities were disclosed) was dependent on the rate of compensation pay outs. |
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Post by Baron von Lotsov on Feb 22, 2024 13:06:15 GMT
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Post by Pacifico on Feb 22, 2024 17:57:11 GMT
Yes, but compliance with that act applies to all Government funding of the Post Office - not just compensation payments. As a state enterprise of course the Government is responsible for any losses incurred. The extent of the loss was calculated based on the rate of compensation payments and the rate at which convictions were overturned (per the accounts). It must follow that the financial position of the Post Office (and the extent to which Government liabilities were disclosed) was dependent on the rate of compensation pay outs. But the money for compensation has already been ring-fenced so couldn't be spent on anything else - if the Government didn't pay it out this year it would pay out next year. And in the overall scheme of Government finances a couple of hundred million is a flea bite - certainly nothing that would affect any macro economic policy. |
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Post by Baron von Lotsov on Feb 22, 2024 18:10:51 GMT
"Shah studied philosophy, politics and economics at the University of Oxford."- wiki
I wonder if this looks to anyone like some exclusive club. The abundance of Oxford PPEs in top jobs in politics and government should have alerted you to something going on.
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Post by Baron von Lotsov on Feb 22, 2024 18:13:11 GMT
The extent of the loss was calculated based on the rate of compensation payments and the rate at which convictions were overturned (per the accounts). It must follow that the financial position of the Post Office (and the extent to which Government liabilities were disclosed) was dependent on the rate of compensation pay outs. But the money for compensation has already been ring-fenced so couldn't be spent on anything else - if the Government didn't pay it out this year it would pay out next year. And in the overall scheme of Government finances a couple of hundred million is a flea bite - certainly nothing that would affect any macro economic policy. They don't want thee paltry payments to coincide with the general election. It tends to get news coverage. |
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Post by Equivocal on Feb 22, 2024 18:36:09 GMT
The extent of the loss was calculated based on the rate of compensation payments and the rate at which convictions were overturned (per the accounts). It must follow that the financial position of the Post Office (and the extent to which Government liabilities were disclosed) was dependent on the rate of compensation pay outs. But the money for compensation has already been ring-fenced so couldn't be spent on anything else - if the Government didn't pay it out this year it would pay out next year. And in the overall scheme of Government finances a couple of hundred million is a flea bite - certainly nothing that would affect any macro economic policy. It's not about money being ring-fenced or the macro economic impact of the settlement. It's about the claim made that slowing down the claims would not affect the Post Office's financial position.
Given the way the provision for the claim has been calculated in the PO's accounts, a slowdown in settlement clearly affects the value of the provision and hence the PO's financial position. The fact theGovernment may/will pick up that liability at some future date is irrelevant. Slowing down the settlements makes the PO look not quite so bad.
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Post by Pacifico on Feb 22, 2024 18:44:05 GMT
But the money for compensation has already been ring-fenced so couldn't be spent on anything else - if the Government didn't pay it out this year it would pay out next year. And in the overall scheme of Government finances a couple of hundred million is a flea bite - certainly nothing that would affect any macro economic policy. It's not about money being ring-fenced or the macro economic impact of the settlement. It's about the claim made that slowing down the claims would not affect the Post Office's financial position.
Given the way the provision for the claim has been calculated in the PO's accounts, a slowdown in settlement clearly affects the value of the provision and hence the PO's financial position. The fact theGovernment may/will pick up that liability at some future date is irrelevant. Slowing down the settlements makes the PO look not quite so bad.
Its Government money - the PO financial position is not changed one way or the other. All financial liability that the PO faced has already been paid out. |
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Post by Equivocal on Feb 22, 2024 18:57:09 GMT
It's not about money being ring-fenced or the macro economic impact of the settlement. It's about the claim made that slowing down the claims would not affect the Post Office's financial position.
Given the way the provision for the claim has been calculated in the PO's accounts, a slowdown in settlement clearly affects the value of the provision and hence the PO's financial position. The fact theGovernment may/will pick up that liability at some future date is irrelevant. Slowing down the settlements makes the PO look not quite so bad.
Its Government money - the PO financial position is not changed one way or the other. All financial liability that the PO faced has already been paid out. No. The PO has a provision for the claims calculated as detailed in the accounts. Supressing the provision reduces the reported loss.
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Post by Pacifico on Feb 22, 2024 22:52:32 GMT
Its Government money - the PO financial position is not changed one way or the other. All financial liability that the PO faced has already been paid out. No. The PO has a provision for the claims calculated as detailed in the accounts. Supressing the provision reduces the reported loss.
settlements to claimants up to a value of £233 million, subject to Post Office funding the first £87 million. The
£87 million settlement level was exceeded after the balance sheet date and Government is now providing
funding for settlements.'
The PO is no longer funding the compensation scheme. |
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Post by Equivocal on Feb 23, 2024 5:31:17 GMT
No. The PO has a provision for the claims calculated as detailed in the accounts. Supressing the provision reduces the reported loss.
settlements to claimants up to a value of £233 million, subject to Post Office funding the first £87 million. The
£87 million settlement level was exceeded after the balance sheet date and Government is now providing
funding for settlements.'
The PO is no longer funding the compensation scheme. Wrong note, that's the shortfall scheme.
The provision is also impacted by payments made to those who have had convictions overturned, both interim and final payments, totalling£13 million in year, and the discounting of the forecasted future cashflows, the impact of which is material at
the balance sheet date. The level of estimation risk is increased as a result of the early stage of the proceedings,
with only five overturned convictions having had full and final settlement as at 30 November 2023.
In December 2021, Government formally confirmed it would provide funding in respect of future payments
arising as part of the OC, up to a maximum of £780 million, which is in excess of the total provision value plus
settlements made to date. The funding will be recognised at the point the settlement becomes virtually certain.
As I said, increasing the provision would have increased the PO's loss and hence negatively impacted its financial position.
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Post by Pacifico on Feb 23, 2024 7:38:19 GMT
But if the Government is providing the funding at the point of settlement then the effect on the PO is zero.
On a related note - I see that Mr Staunton has now claimed that UK Government Investments were behind the PO letter stating that they would oppose quashing 50% of the Horizon convictions. UKGI flatly deny this.
So we have Staunton making allegations that Badenoch did something that she denied, Munby doing something that she has denied and now UKGI doing something that they have denied... all without any evidence at all..
Walter Mitty?..
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Post by Equivocal on Feb 27, 2024 15:25:33 GMT
But if the Government is providing the funding at the point of settlement then the effect on the PO is zero. On a related note - I see that Mr Staunton has now claimed that UK Government Investments were behind the PO letter stating that they would oppose quashing 50% of the Horizon convictions. UKGI flatly deny this. So we have Staunton making allegations that Badenoch did something that she denied, Munby doing something that she has denied and now UKGI doing something that they have denied... all without any evidence at all.. Walter Mitty?.. Don't know if you watched the select committee today. Staunton took exactly my point on the PO's accounts. Perhaps because he's an accountant and I've spent the best part of the last 50 years reading DD reports on company accounts.
Whether or not he's a Walt, time will tell - perhaps.
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Post by Baron von Lotsov on Feb 27, 2024 19:54:22 GMT
'Funding agreements regarding the scheme are in place until 31 March 2025, with Government funding
settlements to claimants up to a value of £233 million, subject to Post Office funding the first £87 million. The
£87 million settlement level was exceeded after the balance sheet date and Government is now providing
funding for settlements.'
The PO is no longer funding the compensation scheme. Wrong note, that's the shortfall scheme.
The provision is also impacted by payments made to those who have had convictions overturned, both interim and final payments, totalling£13 million in year, and the discounting of the forecasted future cashflows, the impact of which is material at
the balance sheet date. The level of estimation risk is increased as a result of the early stage of the proceedings,
with only five overturned convictions having had full and final settlement as at 30 November 2023.
In December 2021, Government formally confirmed it would provide funding in respect of future payments
arising as part of the OC, up to a maximum of £780 million, which is in excess of the total provision value plus
settlements made to date. The funding will be recognised at the point the settlement becomes virtually certain.
As I said, increasing the provision would have increased the PO's loss and hence negatively impacted its financial position.
There is no such thing as virtually certain. Either something is certain or it is not. |
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Post by Bentley on Feb 27, 2024 19:56:42 GMT
Wrong note, that's the shortfall scheme.
The provision is also impacted by payments made to those who have had convictions overturned, both interim and final payments, totalling£13 million in year, and the discounting of the forecasted future cashflows, the impact of which is material at
the balance sheet date. The level of estimation risk is increased as a result of the early stage of the proceedings,
with only five overturned convictions having had full and final settlement as at 30 November 2023.
In December 2021, Government formally confirmed it would provide funding in respect of future payments
arising as part of the OC, up to a maximum of £780 million, which is in excess of the total provision value plus
settlements made to date. The funding will be recognised at the point the settlement becomes virtually certain.
As I said, increasing the provision would have increased the PO's loss and hence negatively impacted its financial position.
There is no such thing as virtually certain. Either something is certain or it is not. That’s a blow to Schrodinger. |
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Post by Baron von Lotsov on Feb 27, 2024 20:08:28 GMT
There is no such thing as virtually certain. Either something is certain or it is not. That’s a blow to Schrodinger. Yeah, but the traditional academic was honest and called a spade a spade. For example Heisenberg called his theory the Uncertainty Principle, not the Virtually Certain Principle. |
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