A Time of Magic

I’m sure that most people assume that shops basically have the same kinds of account that they do themselves albeit with larger throughput.

However, that’s not generally the case. Yes, they do have relatively normal bank accounts but for a whole host of reasons they can often accumulate countless other accounts with their suppliers and in particular for payment processing. To sell merchant account is very much a specialism as the requirements of businesses can vary considerably even when they are apparently similar.

Thus, for example, you can find that two quite similar hotels will operate their credit card processing in wildly different ways. Most will continue to use their normal bank but these days that’s not necessary nor desirable as there are outfits that can do it much cheaper and with more efficiency than a normal bank could.

One of the increasing problems for the UK government is the fact that large chunks of what were formerly nationwide financial decisions have been devolved to the regional governments which make for some peculiarities that are most noticeable in these difficult times.

Thus we have the national government saying that they will ring-fence health and, largely, education spending. A fine aim for sure, but both of those budgets are devolved to the regional governments which causes problems because those governments are financed by what’s called the block grant – essentially a big cheque to cover all of their bills.

The effect of this is that those block grants are what will be reduced (by anything from 25% to 40%) and it will be up to the regional governments to distribute those reductions amongst the areas within their responsibility. Taking Northern Ireland as an example we find that health and education take up around 60% of the total budget so if they are ringfenced by the regional government and the cut were 40% then all other departments would need to be closed down which is hardly a runner. Even at 25% that would mean a 60% cut in the other departments. Thus ringfencing health and education is hardly going to be possible, no matter how desirable it might be in principle.

I think it’s safe to say that we can expect some extremely difficult decisions from the regional governments in the coming months.

We’re trying to sell a rather unique property at the moment.

That’s clearly more difficult in the current market than it would have been a few years ago and therefore the buyers are that little bit more cautious about it. Essentially they want to know what the property is really worth when previously they’d have taken more of a chance.

Thus, we find ourselves becoming more aware of what it’s really worth as opposed to what we’d like it to be worth. As it happens there isn’t a whole lot of difference in the two figures and we’ve been keeping such a close eye on it that when we got another valuation done by an estate agent to help one of the buyers our own figure was identical to the one that we’d quoted that buyer earlier (no, we didn’t influence the agent: the buyer arranged the agents visit and we never even spoke to them).

The problem is that this particular buyer had started from the premise that he could borrow X, that he’d need to spend Y on various renovations and that therefore he could only pay us X-Y. Unfortunately, that figure is well under what we could accept as even a rock bottom minimum and it turns out it about a third of what the valuation turned up. To say that he’s not a happy bunny is putting it mildly as he’d put quite a bit of time, effort and money into getting all kinds of experts out to assess what it would cost to makeover the property into what he wants and now that’s all been wasted.