| Author |
Message |
Laurie Queripel
Guest
| | Posted on Monday, August 30, 2010 - 10:56 am: |   |
IT’S IMPORTANT to point out that the Guernsey Press headline attributed to John Curran from the Office of Utility Regulation (‘£37k is too much for a postie on a bike’, 23 August) is very misleading.
This point was cleared up in the small print explaining that the figure included operational costs and overheads. It therefore seems rather disingenuous to lead with such a potentially inflammatory comment.
I am reliably informed that the actual salary is several thousand pounds less than the quoted figure. Personally, I don’t begrudge our posties a decent income. They, as it were, work at the coalface and provide a most necessary service. Driving rain, gale force winds and snarling dogs, these are just some of the hazards that they often face.
Balance and common sense have to come into play when considering the competition ethos in a small community such as Guernsey. In such a community, it is absolutely vital that the utilities (communications, energy, water etc.):
1. Are stable and reliable.
2. Form a committed, integral part of that community.
3. Provide employment for the local workforce, and any profits generated should stay in Guernsey and benefit the local economy.
I am yet to be convinced regarding the advantages of regulation, particularly when, on the whole, prior to its introduction, things seemed to be working quite well.
The actions of the OUR also impact on smaller businesses, encumbering them with additional bureaucracy, red tape and fees thus adding to their running costs.
Finally, is the OUR financially sustainable and what is the typical price (salary, overheads, pension, operational costs) of employing an OUR staff member?
LAURIE QUERIPEL
l.b.l.w.27q@ amserve.com |
Anon
Guest
| | Posted on Thursday, August 26, 2010 - 03:15 pm: | |
PLEASE, please tell me that the Guernsey Press quoting the average postie’s wage as being £37,000 a year was a misprint. Surely it was. Wasn’t it?
I like my smiling postie very much, so this is nothing personal against him, but my husband (a police officer), who has had knives pulled on him, had people vomit over him, dealt with car accident fatalities and then had to report the news to the grieving family at all hours of the day and night gets £26,000 a year, with precious little opportunity of much overtime to earn more.
Does this seem a fair comparison to you? No, me neither.
Name and address withheld. |
Michael A. Ward
Guest
| | Posted on Friday, April 23, 2010 - 03:49 pm: | |
MY FIRST reaction to reading your headline on 8 April, 'Scrap regulator, say Post and Guernsey Electricity', was - at last somebody is shouting that 'the emperor has no clothes'. However, your subsequent headlines of the 10th and 12th made me realise that we still live in Never Never Land. The problem is that these reports show that two issues of critical importance to Guernsey are being cooked in the same pot and will inevitably result in decisions being made in the knee-jerk arena of our States meetings and may once again cost the island dearly.
What are the two issues?
First, there is the matter of Regulation. I deliberately use a capital letter because Regulation is a beast that once spawned becomes impossible to control, as the finance industry has learned to its cost.
While the need for effective Regulation is a necessity in the wider world of finance, as the unbridled greed of many executives therein periodically proves, the same imperative does not apply to our utilities. (Although it is an argument for another day as to whether we get value for the £10m. p.a. of direct costs - probably £30m. p.a. if indirect costs are included - that the local finance industry has to bear each year.)
The fact of the matter is that our present utilities regulation was ill-conceived in the first place, so there is little wonder that there are justifiable complaints from within this sector. To understand why we are where we are, we need to look back to when the utilities were 'commercialised'.
Because many of our elected representatives could not put aside petty issues and personal political agendas in order to work together for the good of us all, the structure of our government ceased to be fit for purpose. Consequently, it became obvious to many that it could not exert sufficient 'shareholder' control over the utilities, which was needed to initiate the changes to their methods of operation necessitated by changing market forces. Knowing that, under the circumstances of the time, the States did not possess the will or the wit to take the actions needed, many well-meaning people thought the only option was to try to impose some sense of commercial reality on the utilities. Unfortunately, this caused those to whom 'commercial' is a dirty word to clamour for 'protection of the public' by regulation. Thus Guernsey has been saddled with the fatuous concept that the public needs to waste money on a quango to protect it from an entity that it owns. Even the supervision of the telephone service, which it finally decided to sell after procrastinating so long that it had lost most of its commercial value, appears to have been given little objective thought. More attention was paid to the politically populist dogma of 'a level playing field' than to a cost/benefit analysis of a costly quango supervising a business that was already facing the explosion of competitive forces created by the advent of the digital world. Could not a cost-effective method of supervising Cable & Wireless Guernsey Ltd have been found that would not have cost us customers nearly £4m. over the last seven years? Have we really had value for money in spending over £2m. in direct costs alone in supervising the utilities we own?
The second issue is that of the future of Guernsey Post.
While I am sure that Mr Steele is a competent executive of a postal service and many may applaud him for seeking to preserve the jobs of postal workers, does Guernsey really need a States-owned bank? If it thinks that we do, are there not sufficient executive people with real banking experience in our island who could have investigated this subject authoritatively and objectively - without spending £860,000 of our money without our consent in order to find that our law would probably need changing?
Guernsey Post's chief executive confirms, if confirmation is needed, that postal services as we know them are dying. Guernsey Post, through no fault of its own, in its present form is, like the States itself, no longer fit for future purpose. So, rather than spending more money to plug the holes in a sinking galleon just because it has served us well in the past, would it not be better to turn our minds to designing a new ship that can face the current winds of change with confidence? To suggest that we should follow the UK Government down the road to perdition as justification for seeking to diversify into financial services is of little comfort to many of us, so why don't we stop, take a step back and return to first principles?
What is the fundamental purpose of a postal service in our modern world? It is exactly the same as when Rowland Hill extended the penny post - to provide a community that needs it with an effective means of communication. But the needs of the wider community have drastically changed, so, although the need for a postal service may not be in terminal decline, at least not in the foreseeable future, the numbers of people needing it are rapidly diminishing and will continue to do so until there remains only a relatively small proportion of the public still dependent upon post. In these circumstances, Rowland Hill would never have designed the type of service we have now. Is it beyond the wit of those members of our States who have some real business experience to develop a service based upon future needs?
While most of us will only need such a service sporadically, the people who will mainly need this service will be the elderly and those who are not computer literate. So let us design a service that these people can afford. If we need to subsidise it, so be it, but let us know the cost up front, not bury it in a quagmire of diversification.
Of course, the spectre at the feast for those brave enough to deal with the problem logically is labour relations. Inevitably, any effective modernisation of the service will lead to a contraction of staff.
Bearing in mind that many Guernsey Post employees have given faithful service for much of their lives, this problem will require much care and consideration but if the States - yes the States, which is still the ultimate employer - is worthy of its name, a fair and compassionate solution could be found. Attempting to turn postal workers into bank clerks is not the answer.
Any private company faced with the market change that Guernsey Post faces only has two options - to downsize as caringly as possible, or go out of business. Trying to diversify into financial services that are foreign to your workforce has generally had disastrous consequences for many, not least the original employees. It certainly has for many of the public, as the multitude of examples of mis-selling that now abound evidences.
MICHAEL A. WARD |
Dennis H. Le Moignan
Guest
| | Posted on Friday, April 23, 2010 - 03:48 pm: | |
Postwatch Guernsey
THESE are difficult times for Guernsey Post Ltd, therefore Postwatch feels it should try and clarify some points relevant to the present situation.
Postwatch Guernsey is an independent watchdog committee initiated by the States of Guernsey as a condition of the postal licence issued to Guernsey Post Ltd when the company was commercialised. We meet on average every six weeks, but in the past it was monthly, when much was happening within GPL, and this would happen again should the need arise. Postwatch is provided with up-to-date information from top levels of management at our meetings. Also, its chairman and sometimes committee members keep in touch with management at other times regarding various issues that may arise.
The Postwatch mandate states: 'To act in the best interests of all users of the services offered by Guernsey Post by acting as a watchdog, to protect, promote and develop the interests of all customers of Guernsey Post's services and to ensure that customers receive the best possible cost-effective service from Guernsey Post.
'To monitor on an ongoing basis Guernsey Post's compliance with the various quality of service targets agreed with the Office of Utility Regulation including end to end delivery targets for the various mail streams, delivery failures, operational failures, complaint handling, compensation claims and the like.'
Guernsey Post Ltd
Postwatch observes the following: Since commercialisation in 2001, there have been many changes at GPL in management, operational procedures and staffing levels. The company has been through some dark times, in particular with the loss of a chief executive after a long illness. Changes made in the company since Gordon Steele joined as chief executive in February 2007 have led GPL to achieving noticeable improvements throughout. It is relevant to the improvements at GPL that complaints to both GPL and Postwatch have reduced.
During this period, battles have been fought and are still ongoing to protect the business.
The large rise in Royal Mail charges has had a big impact financially on the company, which had change forced upon it.
At the same time, disagreements with the OUR are ongoing. GPL is constantly working to increase efficiency and reduce overheads while occupying an inefficient building, which, although impressive, is too large for current mail volumes. Paying £160,000 to the OUR for its operating licence is an additional contentious issue.
Postal services worldwide are all struggling because of continuing huge reductions in letter mail due to the use of email and other electronic facilities.
The US postal service has stated that it will lose £240bn over the next 10 years unless it radically changes its business because its mail volume has reduced by 20% during the last 12 months. Approximate figures for the decline in post in other areas at this time are: UK 10%, Guernsey 10-15%, Jersey 10-15%, Continental countries 5-15%.
The introduction of 'pricing in proportion', instigated by Royal Mail costing structures, has also brought additional problems. While PiP results in little increase to the cost of the consumer sending letters, commercial/bulk mailers sending packages and perishable goods such as flowers have had larger increases in their postal rates.
These additional costs have to be passed on to their customers and some bulk mailers are searching for alternative ways to send their goods to the UK.
This is not an easy situation to resolve, because next-day delivery can only be achieved by using the Royal Mail distribution system as no other company in the UK has similar facilities. GPL is striving to help the bulk mailers in their predicament. It is interesting to note that bulk mailers regard GPL's service as being very good. It is the cost which is the upsetting factor.
The regulator has made the decision to reduce the reserved area from £1.35 to £1. The RA means that competition is not allowed at or below that amount. However, reducing it to £1 and removing all packages from the RA means GPL is now open to more competition, which is within the mandate given to the OUR by Commerce and Employment. With the current world decline in post, this would seem not to be a good idea.
GPL is not happy with this and having failed to negotiate a settlement with the regulator has decided to appeal against the decision through the courts. This might seem to be an extreme measure, but without a tribunal system in place (the old one was scrapped years ago) there are no intermediate measures that can be taken.
Office of Utility Regulation
Apart from the mandate which C&E gave to the OUR regarding GPL is the fact that regulators normally work from a theoretical business model, whereas GPL works from a theoretical base combined with the practicality of making something work.
This means that they most likely come up with different answers, although at this present time they appear to be miles apart.
Defence of our postal services in the ever-diminishing worldwide postal market is paramount, not only to sustain GPL's business but to maintain what most islanders would consider as an essential social/community requirement and service. Therefore, as we have previously stated to the OUR, Postwatch feels it is necessary to maintain the RA and not allow competition at and below the figure of £1.35.
We strongly feel that a review of regulation is a good idea.
It is also our opinion that the OUR has been doing a good job in the past within the mandate it was given by C&E, but possibly it is time to do as stated in the National Audit Office report of 2005: 'The OUR should adopt a more risk-based approach to its regulation of Guernsey Post. It should only be involved in matters which are fundamental to the wellbeing of consumers and the island as a whole. Other issues should be given a light touch. Such an approach could reduce further the cost of regulation.'
The continuing decline in postal volumes might suggest bringing 'the lighter touch' into play.
Postwatch has listened to the arguments put forward by both GPL and the regulator, but cannot categorically say that either party is totally right or wrong.
While all information is made available to us from GPL, when it comes to the highly detailed points of the finances involved both parties are working on one million-plus figures and Postwatch does not have the highly qualified expertise to go through them, therefore we cannot make a 100% decision on all aspects of the dispute.
It would require an expert working full time, such as the specialists used by GPL and the OUR, to find the answer - we can only judge things by using all other information available to us.
Postwatch Guernsey is contactable on the telephone on 733561, by emailing PostwatchGuernsey@cwgsy.net
or at Freepost, PO Box 633, St Peter Port, GY1 5SS.
DENNIS H. LE MOIGNAN,
Chairman,
Postwatch Guernsey. |
William Audoire
Guest
| | Posted on Saturday, January 23, 2010 - 10:19 am: | |
SELLING off that which gives large island employment.
If our Guernsey Post Office makes a profit for we, the island people who own it, then pat them on the back and leave them alone. We have the best post in the world. Simpletons gone mad in cutting down our apple tree.
WILLIAM AUDOIRE. |
M. F. Cooper
Guest
| | Posted on Monday, January 18, 2010 - 03:02 pm: | |
RECENTLY, one of your comment columns referred to the OUR report about the future of the postal service and suggested that householders would probably be satisfied with deliveries two or three times a week rather than every day.
I would suggest that this could cause serious problems as many people do not use computers and rely on regular, prompt delivery of their mail that may include important items such as medical appointments and invoices etc. that may be subject to responses within a short delay.
In my opinion, the future of the postal service should remain operated completely by the existing organisation.
I am surprised that the PAC is proposed to approach the States before the Assembly has considered the requete on the subject of consensus government. I consider that cabinet style government would result in a small number of individuals setting policies without due regard to the wishes of the elected deputies of the people. What will happen to democracy?
Finally, I wish to say how I appreciate the columns published by the former deputy Peter Roffey.
M. F. COOPER |
John Buchanan Sr
Guest
| | Posted on Saturday, November 28, 2009 - 11:26 am: | |
Who are all these consumers who want there to be competition with Guernsey Post?
As far as I can work out, 95% of the population of Guernsey is quite happy with the way our mail is collected and delivered and the operation of all our post offices throughout the Bailiwick.
So that leaves us with a minority group of people, or should I say companies, who would like to ship out their goods cheaper and therefore make more profit and who are only interested in their bottom line.
So, the conclusion I can draw is that this introduction is not for the benefit of islanders but for the benefit of a small, minority group of companies.
The civil servant with the fancy title, who in fact is just another head of a quango, appears to have lost the plot when it comes to what consumers want and has become blinded by the figures. (Cheap shot I know, but that's the way lots of people see it).
The area where the most income comes from is not a majority, they are in fact a minority and the Guernsey people (the majority) don't want an alternative postal service.
If you think for one moment that we will then have two post offices in every village and two sets of postmen doing the rounds, you are sadly mistaken. Guernsey Post will be left with no option but to close some of them down, as is happening all over the UK.
I admit that Guernsey Post is not perfect and when you look at the accounts, it really must get a grip on its overtime bill and there are certainly savings to be made. But more competition has nothing to do with any of this and should not be entertained at any price.
We are rapidly taking Guernsey Post in the same direction as Guernsey Electricity.
The OUR has taken a profit-making enterprise and stifled it to the extent that it is now not in profit any more. We keep talking about the money that Guernsey Electricity invested in tidal energy. They wouldn't be able to do that now and where is the money to come from if we want to install a tidal energy facility?
Ask yourself this question: electricity is quite cheap in Guernsey. Why?
Most small jurisdictions have high energy costs because they have to import fuel, etc. Places like the UK are able to have cheaper electricity because of economies of scale. Oh and don't say because we get it cheap from France.
We are not taking so much from France any more because it's not so cheap now.
Wait a minute, though. UK electricity is more expensive than ours - this should give you a clue that something is not right. It's high time the States of Guernsey looked into the operations of the OUR before it's too late.
JOHN BUCHANAN (SNR) |
Laurie Queripel
Guest
| | Posted on Friday, November 27, 2009 - 03:06 pm: | |
TWO things immediately strike me about Guernsey Post. They provide an excellent service to the community, and annually return a profit to the States. What's not to like?
Once again it seems that all this talk of change and competition is to suit a minority of the population. There is nothing visionary about the OUR's proposals. Other, crucially bigger, jurisdictions have adopted similar initiatives, normally to the detriment of ordinary consumers.
Closures of local post offices and the loss of their essential services often follow. The historic proof speaks for itself. Guernsey Post are fully invested in and committed to the island. The competition ethos can never be fully embraced in an island as small as Guernsey. Stability and quality of service have to count for something.
We would probably have neither of these things if an outside company were allowed to come in and cherry-pick the postal market. Dog eat dog scenarios very rarely result in a satisfactory outcome for the consumer.
I am greatly concerned by the fact that Deputy Dave Jones has recently tried to intervene regarding this issue only to be told that, in effect, it was none of his business.
The mandate and the reach of a quango should never supersede that of a democratically elected official.
The OUR is an advisory body. They should not have the ability to rise above or bypass political scrutiny.
I find it a bit rich that the OUR has highlighted the fact that some Guernsey Post staff earn between £25,000 and £35,000 per annum and yet according to the October Billet d'Etat, the OUR's staff expenditure and salaries for 2008 amounted to more than £417,000.
This averages out to approximately £59,000 per staff member. No doubt, as with all businesses, Guernsey Post could identify and act upon any inefficiencies but there is a good deal of difference between that process and what the regulator is proposing.
There are areas where the OUR's attention is merited but not in this case and certainly not to this extent
LAURIE QUERIPEL.
l.b.l.w.27q@ amserve.com. |
Derek Coates
Guest
| | Posted on Wednesday, November 25, 2009 - 02:39 pm: | |
THERE are always two sides to every story. My concern is that the 'posties', politicians and people of Guernsey have been given a very biased version by the Guernsey Post Office PR machine and may not have been told the other half of this particular story.
The key point to understand is that the whole of the 'bulk mail' industry representing £21m. a year of Guernsey Post turnover (and growing) requires only £370k of post office labour - because nearly all of the work of sorting is being done by the bulk mailers themselves!
The remaining Guernsey Post turnover of just £22m. (and declining) has labour costs of a staggering £13m., the majority of which is made up of management salaries. This is one of the things that the OUR are demanding must change, and rightly so. Guernsey Post is quite simply being extremely badly managed and the extent of this mismanagement has been brought to the attention of the public by the OUR and Guernsey Post don't like it.
If Guernsey Post are successful in campaigning against the challenges that the OUR has set them, then the result will be significantly more job losses in the future than need be the case, not only amongst postal workers but also among middle management. We believe that Guernsey Post are failing their staff, failing our business community and failing our island.
In our opinion the postal workers, postmen and drivers at the Guernsey Post Office are doing a terrific job for our island. They turn out in all weathers collecting, processing and delivering our mail. They have our wholehearted thanks and deserve all of our support.
Regrettably the actions of the senior management at Guernsey Post and their aggressive public attack upon the OUR cannot be equally applauded. It has been both unwarranted and dishonest and it has been played out in the media using half truths and scaremongering. It has recently also begun to verge on the personal, something that I find to be both distasteful and unwarranted. Rather than be accused of self-interest because we are a major post office customer, we have until now kept silent, but the aggressive spin by Guernsey Post against the OUR compels us to speak out.
Guernsey Post has significant vested interest in keeping their protected monopoly in place, particularly among their highly paid and comfortable senior management.
Healthspan on the other hand spend over £5m. a year on postage and we are biased because we will gain from cost cutting at Guernsey Post as that brings down our costs.
The only people in this equation with no axe to grind are the OUR. They are in existence to keep costs down for all customers. They act as a form of quasi-competition, ensuring that the consumers of monopolistic utilities such as Guernsey Post are not burdened by unnecessary costs arising from management flaccidity and incompetence. For that reason our island should be extremely grateful to the OUR. They are the unbiased voice that is here to protect the consumer and as such, they do not deserve the dishonest vilification thrust upon them by the PR machine at Guernsey Post.
Perhaps the biggest disservice of the attacks by Guernsey Post on the OUR, is that it may persuade some politicians to ignore the dangers to our wider economy if the OUR recommendations are not implemented. Guernsey Post in its current form will no longer be viable and many more staff at the post office will lose their jobs than would otherwise be the case. Failure to implement the OUR recommendations will result in the people of Guernsey being left with the burden of an impoverished and loss-making Guernsey Post for many years to come.
Derek Coates,
Chief executive,
Healthspan.
Editor's note: Mr Coates' submission to the OUR can be read in full by clicking this link - www.guernsey-press.com/pdf/dcoatesNov09.pdf |
Dr N. Le Poidevin
Guest
| | Posted on Tuesday, November 24, 2009 - 03:56 pm: | |
THE Office of Utility Regulation seeks to restrict the monopoly position of Guernsey Post and increase competition.
The OUR's present monopoly position cannot guarantee us the best control of public utilities.
Is it not time to open up that office to competition and have at least two Offices of Utility Regulation?
DR N. LE POIDEVIN. |
David Inglis
Guest
| | Posted on Saturday, November 21, 2009 - 10:17 am: | |
I AM in support of Martin Johnson's letter on 12 November, 'OUR is not out to destroy Post.' Clearly he makes the reader realise that GPL controls the outcome of its destiny, not the sabre-rattling director general, with the writer providing clarity to a lot of misguided facts.
It is important to remember the States established the OUR to protect and monitor, among others, Guernsey Post's performance and quality of service, all in the interest of the taxpayer and the user. It is only right therefore that Guernsey Post trims its operational activity against the reduced mail volumes. Maybe it's time to end the expensive Saturday collection and delivery service, like the rest of the postal world has, but strangely enough with the exception of Royal Mail.
DAVID INGLIS. |
Gordon Steele
Guest
| | Posted on Thursday, November 19, 2009 - 03:31 pm: | |
I FEEL I must respond to the Director General's letter of 16 November to refute a number of the statements he makes.
1. His statement that 70% of Guernsey Post volume would remain with a reduction in the reserved area to 65p is extremely misleading. What he does not mention is that, based on his own calculations, Guernsey Post's revenue would fall by 65%, meaning only 35% of GPL revenue would remain in the reserved area.
Our own calculations indicate that the fall in revenue could be worse than that. Contrary to the regulator's argument, his proposal means that even a first-stage reduction in the reserved area would have a very significant financial impact on Guernsey Post.
2. We are concerned about possible redundancies as a result of the abolition of the reserved area. We would hope that these can be avoided. However, the potential loss of 65% of our revenue might make this difficult to achieve if we are to remain profitable.
I should also point out that the regulator's office has said to us that we must reduce our administrative headcount by 16 people - this would not be possible without redundancies.
3. The Jersey Post environment is quite different to that proposed for Guernsey, so no parallels should be drawn. Under Jersey law, new operators must apply for a licence and demonstrate that their activities will not damage the Universal Service Obligation in Jersey. This would not be the case under the regulator's proposals for Guernsey, which would mean that foreign competitors could enter the market without a licence and with no concern about the Universal Service Obligation.
4. We dispute the implication that the regulator has allowed Guernsey Post to recover all the £8m. cost increase from Royal Mail and therefore everything we wanted has been granted. The reality is that what he has given with one hand has been taken away with the other. Some £2m. (£1.2m. in the first year) of that £8m. has been disallowed without any detailed review. This, combined with a reduction in the reserved area and the regulator's proposed tariff, means that we face a huge shortfall in revenue of up to £4m.
5. While we recognise that bulk mailers are an important asset to the island and an important customer to Guernsey Post, we totally reject the notion that bulk mailers would leave Guernsey on the basis of a rise in postal costs alone.
The reverse is actually happening, with new bulk mailers recently announcing start-ups in the island and some current bulk mailers making major investments in plant and premises. It's important to understand that for bulk mailers, only about 8% of their postal charges come from Guernsey Post, while the other 92% comes mainly from Royal Mail charges and conveyance charges, which would still be there after any deregulation.
Of course postal costs are a factor in any decision but they have to be seen in the context of other factors such as lack of VAT and lower taxation, along with the availability and cost of local labour and suitable premises.
6. We are disappointed to see that despite Guernsey Post issuing corrections, the regulator is still making misleading, selective statements about overheads and overtime. In saying overheads have doubled, he has conveniently ignored those costs that were imposed on us, such as complying with new legislation, and also discounted those very investments such as training, development of local people and revenue protection that have led to the dramatic improvement in the financial and service performance of the business.
We repeat that overheads at Guernsey Post remain in line with the highest industry standards. Also, we say again that directors' salaries have not increased by an average of £115,000 each and overtime has not doubled and the regulator knows it.
Guernsey Post understands that the regulator has an important task to do in balancing interests for all interested parties in this dispute. However, we believe that we have a right to expect the regulator to take his decision on the basis of the correct data and the correct analysis.
We also feel that he should take into account the interests of all parties in the Bailiwick, not just the views of the bulk mail industry.
And finally, we firmly believe that as the decision about the reserved area is of such importance, and once taken can never be reversed, it must be taken not by the regulator but by the States, on behalf of everyone in the Bailiwick of Guernsey.
GORDON STEELE,
Chief Executive,
Guernsey Post. |
John Curran
Guest
| | Posted on Monday, November 16, 2009 - 01:40 pm: | |
Thank you for the opportunity to respond to your reader's letter regarding the proposals to allow some further competition in the postal market.
The key facts are:
1. Guernsey Post will still have a monopoly on almost 70% of its postal volumes with a reserved area at 65p.
2. Fewer than 10 Guernsey Post staff out of a total of 271 work on bulk mail. Talk of mass redundancy threats if it loses some bulk-mail business is simply scaremongering.
3. Claims of threats to the Universal Service Obligation are entirely baseless and is Guernsey Post 'spin' designed to detract from the efficiency savings it needs to make. Jersey Post, operating in a very similar environment, has never had a reserved area but still provides the USO.
4. The OUR has allowed Guernsey Post to recover all its costs from Royal Mail's increased charges, despite claims from Guernsey Post to the contrary.
5. Bulk mailers pay significant amounts to the States in tax and TRP, employ 600 people (2007 figures) and contribute significantly to island life. Ensuring they stay in Guernsey, providing diversification in the economy, is important.
6. There is a real risk that Guernsey Post will lose customers if the reserved area is not changed. The clear message from bulk mailers is they need more competitive pricing than that offered by Guernsey Post. Not only do such customers have alternative locations where they can operate from, other postal operators are actively seeking to encourage them from Guernsey.
7. The claim by Guernsey Post that it has absorbed £4m. of Royal Mail costs is misleading. The saving comes from its bulk mail customers changing how they send their mail, not by Guernsey Post efficiencies.
The OUR was established by the States of Guernsey and operates within the confines of the various laws and States directions given to it. In 2001, the States directed the OUR to give Guernsey Post a monopoly on certain postal services in the Bailiwick to the extent that it was required to ensure maintenance of the universal postal service. The States also asked the OUR to review and revise the scale of the monopoly with a view to introducing more competition so long as it did not prejudice the universal postal service. Therefore, in reviewing the reserved area, the OUR is acting only in accordance with the States of Guernsey instructions.
Contrary to Guernsey Post's claims, the OUR is proposing to allow it to recover all the costs being passed onto it by Royal Mail. This is a serious misrepresentation by Guernsey Post, which has claimed the OUR has not allowed £4m. to be recovered. This is factually incorrect. The OUR has also proposed wide ranging tariff changes from April 2010 as a consequence of the change in the way post charges are calculated - called Pricing in Proportion (PiP).
The OUR believes Guernsey Post does need to make greater efficiency savings - our proposals required approximately £1.2m. in total. Much of these savings should come from lowering overheads that have been wrongly attributed to the postal business. While Guernsey Post is free to diversify its business, the OUR does not believe it is right that Guernsey postal customers should be funding the cost - and bearing the risk - of such diversification.
As our report sets out, overheads have doubled since 2006, overtime in parts of the operations business run at 54%, average non-operational payroll has increased by 49% - well ahead of inflation for the same period - and the finance function costs have doubled. This is not OUR 'spin' - these figures are all Guernsey Post's own numbers. So far we have seen no evidence that this additional cost has improved postal services and postal customers should not have to pay for it.
We have also proposed reducing the reserved area to 65p. Guernsey Post will still retain a monopoly on almost 70% of postal volumes at this level.
It does, however, give bulk mailers the opportunity to get more competitive pricing than is currently available through Guernsey Post. It must be made clear that Guernsey Post will not necessarily lose this business just because the reserved area is lowered. If Guernsey Post offers its customers prices that are competitive and at a quality that customers need, then it should have no fear of competition. In 2007, bulk mailers paid to the States in taxes and other charges more than three times what Guernsey Post did. They employed nearly 600 people, supported a wide number of charities and sporting organisations and supported other Guernsey businesses through purchasing goods and services locally. Allowing the bulk mailers to get more competitive prices ensures they stay in Guernsey, contributing to diversification in the economy.
This is why the OUR must look at this wider picture. It is not a view that can allow itself to be driven by just the narrow commercial interests of Guernsey Post.
The confusion and hysteria surrounding the USO must also be refuted. The USO is the level of service Guernsey Post must deliver and includes six-day delivery and the provision of reasonable customer access points. The USO is set by the States and the OUR cannot change it. The OUR is legally required to ensure that Guernsey Post can meet this obligation and the proposed changes in the draft decision will have no impact on the USO, contrary to what Guernsey Post would have islanders believe.
It is our opinion that Guernsey Post is behaving irresponsibly by fuelling unfounded redundancy fears when it should be doing all it can to allay such worries.
It was because of such unfounded fears that when I spoke with the chairman of Guernsey Post on 30 October, I asked him to do what he could to reassure his staff that such risks do not exist.
The issue then becomes one of funding the USO. The suggestion here appears to be that, by opening the market to competition, Guernsey Post will lose so much business that it can't continue to provide the level of service required. Guernsey Post has claimed it will need a States bailout. Let me be very clear that there is no basis for this claim whatsoever. Guernsey Post retains a monopoly on nearly 70% of all mail.
Jersey Post has never had a reserved area of any kind. The level of 65p has been chosen as this is the level at which Guernsey Post can support the USO if it runs as efficiently as is required.
The introduction of the new approach to pricing (PiP) may in fact provide new opportunities for Guernsey Post. A number of bulk mailers may be able to adapt how they dispatch mail, enabling them to take advantage of cheaper mail costs inside the reserved area - boosting the volume of mail within the reserved area. By opening the postal market to competition in a limited way, we believe it balances Guernsey Post's requirements with that of bulk mailers. This helps ensure the provision of the USO at the lowest cost to all postal users. As a result, all postal services benefit from our proposed decision.
The alternative is that given Guernsey Post's less competitive pricing for packet mail, bulk mailers may have to consider leaving Guernsey altogether. In such a case, not only is the bulk mailer's contribution to employment lost, its tax take to the States is lost and Guernsey Post loses even more revenue than might otherwise be the case.
The OUR's balanced set of proposals are designed to ensure Guernsey Post and its key customers can be sustainable in Guernsey and that all postal customers get an affordable, high-quality postal service. We have met with Guernsey Post to help them understand our proposals and we have asked them to share with us the basis for their opinion. Before making any final decision, we will weigh up all of the relevant information before us to ensure that our decision results in a strong, sustainable post market that meets all postal customers' needs at the lowest cost.
The draft decision is now open to the public for comment until 20 November and the OUR would be delighted to hear from every interested person and group with a viewpoint. The draft decision can be found on the OUR website at www.regutil.gg.
John Curran,
Director general,
OUR |
Anon
Guest
| | Posted on Monday, November 16, 2009 - 01:40 pm: | |
OUR director general John Curran believes that Guernsey Post could cope with changes if it was run more efficiently - perhaps he should be directing this at this island's government, who in their wisdom (another one of their good ideas) introduced the OUR to the island in the first place. Mr Curran, like so many of our States deputies, appears to listen to no one.
Mr Curran is not elected and appears not to have to answer to anybody and I am at a loss to understand how one person can dictate how utility companies run their businesses.
Guernsey Post provides what I and many other islanders perceive to be a very good service to our small island. I emphasise the 'small' as I don't believe there is room or need for competitors.
The Guernsey Post over the past few years, under the direction of chief executive Gordon Steele, has managed a company which has returned an operating profit to the States and met most of the performance targets that were set.
It seems to me in the present climate the States needs all the money it can lay its hands on. Earlier this year Guernsey Post were in the top three worldwide of the small operations mail awards at a ceremony held in Munich. Surely this must say something?
Imagine how demoralising all this is for employees of Guernsey Post, from the chief executive to the ordinary postman, who have all worked hard to achieve the targets and gain awards and with these proposals face the prospect of redundancy.
Competition needs to be fair and I don't believe the regulator's proposals meet this criteria. It would be a great shame to lose the six days a week delivery service that this island has been accustomed to for many years - long before Mr Curran came to the island.
The OUR has already wreaked havoc in the energy business in Guernsey - what a good job he is doing.
I fear for the future of this island as we appear to be being dictated to from every corner, whether it be Brussels or the OUR. So come on deputies, sort this out before it escalates further.
Name and address withheld. |
Dave Gardiner
Guest
| | Posted on Saturday, November 14, 2009 - 09:38 am: | |
I HAVE been reading with interest the conflicting and contradictory views expressed on the effect new regulation would have on Guernsey Post Ltd.
If the gentleman with the rather grand title of director-general who seems to think he's omnipotent is allowed to inflict radical, ruinous regulations on GPL, I fear the consequences. In my opinion, regulation is important and can be very good when applied correctly, but in this case, I'm afraid it's a case of too much regulation, too much change and not enough thought and common sense applied.
While on the subject of opinion, I found your Opinion column dated 7 November, in which it was strongly implied that bulk mailers and fulfilment companies are considering leaving Guernsey if more competition in the postal system is not allowed, almost laughable.
Allow me to point out what is glaringly obvious. Whether the bulk mailers and fulfilment companies remain in Guernsey is dependent on the tax benefits they receive, not the price of a stamp.
DAVE GARDINER.
GP Editor's footnote: The situation regarding the fulfilment sector is more involved than Mr Gardiner's correspondence might suggest.
The VAT exemption is a significant factor in the sector's being here but it is far from the only reason.
Increasing amounts of goods leaving the island do not qualify for the exemption as the industry matures away from CDs and DVDs into higher value items and as the UK ceases to be the only market served.
In addition, Guernsey is in direct competition with other jurisdictions, including Chicago, Hong Kong and Switzerland, and faces cost pressures including higher labour rates and scarcity of suitable accommodation. Ultimately, whether the sector - and its estimated 800 jobs and logistical benefits - remains here depends on two things: the cost of getting goods in and sending them out again. |
Christine Smedley
Guest
| | Posted on Monday, October 26, 2009 - 02:45 pm: | |
FURTHER to the Guernsey Press's front page article today (22 October), it should be noted that the Office Of Utility Regulation recommendations are rarely in the interests of the majority of the Guernsey population and it certainly has not consulted with the populace on this subject, nor stated its reason for such an assumption to extend its powers to enable control of post prices outside the reserved sector of the statute. Of course, while we should all like a postal service that is as efficient as possible, at the same time maintaining universal service obligations, there are other factors, which need to be taken into consideration.
Guernsey Post provides, to these islands, a first-rate postal service, which delivers post to more than 27,000 addresses across the Bailiwick, six days a week, and handles over 70 million items of post a year. Its customer charter makes a major commitment to the residents and businesses of the island as well as endeavouring to improve its service and develop closer relationship with all its customers. Its 10 sub-post offices provide outreaches, which most of the island can access, and many become social centres of the community - St Peter's Post Office is a case in point.
We all have our eco-friendly 'posties' whom we greatly value and appreciate. They are always helpful, courteous and they always go that extra mile to help their customers. It is an extremely well set-up organisation, which provides us with a service for which many other countries would be very proud.
While it may appear that Guernsey Post has an advantage over other providers, it does have to comply with the terms of its licence under the Post Law. The Post Law prohibits the provision of postal services in the Bailiwick except under the authority of, and in accordance with, the conditions of a licence granted by the director general (Section 1(1). Section 1(2)(a) provides for a number of exceptions, which are not regarded as reserved services. The Post Office Reserved Postal Services Order, 2001, which came into operation in October of that year, defines reserved postal services as:
'Postal services provided in consideration of a payment of less than £1.35.'
In addition to Guernsey Post, we already have several other operators here - these are non-licensed services. At present, section 1(2) of the Post Law provides that a person does not require a licence to provide those services, which are provided for a sum in excess of £1.35.
Therefore the OUR's proposal to extend the scope of the operation of the Post Office's licence is neither fair nor impartial. If its recommendation were to be introduced, the Guernsey Post would be subject to limitations not imposed upon its competitors. Also, the costs incumbent upon such regulation would be unreasonable and disproportionate to the benefits achieved.
It is obvious that, because of the limited size of the island, the cost-effectiveness of running multiple systems cannot possibly result in any long-term savings to the consumer and there must be considerable savings to the island in having one integrated system, with a well-trained work-force, carrying out the majority of the postal deliveries, which is what we currently have.
In a previously undemocratic act regarding the telecommunications industry, a consultation was carried out in relation to internet service providers and the OUR proceeded to require that internet service providers be licensed, which was instituted, without recourse to the general public, and the consumers then found themselves with multiple internet service providers, wishing to erect dozens of mobile phone masts all over the island. The money raised from the last round of license sales for the mobile phone companies was retained by the OUR to perpetuate their own department and did not devolve to the public.
Is this current recommendation by the OUR yet another regulation, by stealth, which it could be introducing as a means of selling licenses to other post providers? I believe this is a further case whereby the residents of Guernsey need to exercise their democratic voice and lobby their deputies to make them aware of the public's opinion in this matter. We have an excellent post office system and we do not wish to ruin the integrity of Guernsey Post Limited, which has been built up over many years and serves this island well.
If the Guernsey Post's monopoly is broken, it would be a seriously retrograde step, resulting in the other operators picking off the bulk mail items, which would then make it difficult for Guernsey Post to stay profitable, and the general public will be the ultimate losers.
In time, we could have half a dozen other operators, vying with each other for our business, within a tiny population, no larger than a small British town. It would take years for the other operators to set up their infrastructures, which our own Guernsey Post has already.
In the interests of efficiency and money-saving ideas for the benefit of the islanders of Guernsey, I should like to suggest that the OUR looks for answers to its own offices for reducing its payroll and overhead costs and leaves our Guernsey Post alone.
CHRISTINE SMEDLEY. |
Christopher Shaw
Guest
| | Posted on Saturday, October 24, 2009 - 10:52 am: | |
SO, WE'RE going to introduce competition to the postal service. Why would we do that? Because they've done it in the UK?
Guernsey has one of the most effective postal services anywhere, just like it used to be in England. It's not the Guernsey postman who can't find your house to deliver your mail-order trousers, it's the outsourced agent of the UK private alternative to the post office and that's why you never get them. Who is it who notices that old Mrs Tostevin hasn't taken her milk or post in for three days? It certainly isn't the outsourced UK agent.
The postal service is a part of our heritage, a part of what makes Guernsey different and a representation of what they have lost in the UK due to giving regulators too many powers. Look what happened with Cable & Wireless. There is every reason to have a regulator to check that things are done properly but no reason at all to give someone who has never really been in business the power to take business decisions.
When we first started to introduce regulation to Guernsey we did it Guernsey's way by using senior experienced people with industry knowledge, who, above all, had worked in the real world. Now we seem to have career regulators, who by and large have no experience of running the businesses they seek to regulate.
It's time to wake up and stop slavishly following what they do in the UK. If they were right, the UK postmen wouldn't be on strike.
CHRISTOPHER SHAW. |
Tony Holland
Guest
| | Posted on Saturday, October 24, 2009 - 10:51 am: | |
THE regulator has decided that the reserved area regarding the post be reduced from £1.35 to 65p. So, if he gets his way, we will soon see overseas companies popping over to cherry pick the main source of income.
Do these companies wish to deliver the 'extra mile' that our posties do? Oh no, they don't want to be bothered with that. That loses money. Instead of Guernsey Post paying money to the States of Guernsey, soon they will have to go cap in hand to be bailed out.
GPL has in the last year alone achieved the best quality of service ever, the best customer relations ever, complimented at the world mail awards and complimented by Postwatch.
So, Mr Regulator, there is a saying: 'if it ain't broke, don't fix it.' Maybe you're trying to break it.
Guernsey and its people are different. The economy and way of life are, luckily, different to anywhere in the world. Accept this.
Look what is happening to Royal Mail.
Should you get your way, GPL will be running a high-cost, non-profit making venture.
Do the Guernsey public deserve this? Do the States of Guernsey want this?
Answers on a postcard please.
TONY HOLLAND. |
John Curran
Guest
| | Posted on Thursday, September 10, 2009 - 01:23 pm: | |
I WOULD like to respond to the recent letter from Jeff Kitts and other readers on the issue of the OUR’s role in regulating Guernsey Post.
The OUR is responsible for implementing the regulatory regime put in place by the States of Guernsey. The OUR is not self-appointed but has been put into place by the States of Guernsey. This regime was reviewed in 2006 by the National Audit Office and found that not only was regulation of Guernsey Post essential, but the current form of regulation is the most appropriate for Guernsey.
It rejected the suggestions Mr Kitts now makes.
In 2006, the States of Guernsey endorsed the NAO’s view.
It is important that the role of regulation is properly understood. Our role is to ensure consumers, particularly where they have no choice in service provider, pay a fair price. The role of the regulator is to ensure that those monopolies operate as cost effectively as possible and do not simply pass excessive costs onto their customers.
To show how we do this in practice, I will use an example from our work regulating Guernsey Post. In 2006, the board of Guernsey Post, of which Mr Kitts was a member, sought to increase the cost of posting a local letter from 29p in 2006 to 45p by 2009. It also intended to increase the cost of a UK stamp from 34p to 52p.
The OUR, following a review of the company’s efficiency, identified areas where several millions of pounds of savings could be made. The review also drew GPL’s attention to the existence of several working practices which would be hard to sustain in a business that faced competition.
As a consequence, stamp prices were capped by the OUR at levels that incentivised the company to make those savings.
The price for a local stamp is now 36p and a UK stamp 43p – 9p per stamp cheaper than originally proposed by Guernsey Post. The combined effect of the OUR’s work for these two basic postal services over the three years of our review will be a saving to postal
consumers of £2.7m. The saving across all postal services will be substantially higher.
This year Guernsey Post met all of the 21 service standards the OUR put in place. GPL has worked hard to meet these targets and it is something of which GPL is justly proud. It also clearly demonstrates that the existence of the OUR is beneficial to islanders.
Mr Kitts appears to argue that so long as it is a States-owned company that is making profit – regardless of whether that is at the cost to its customers of unnecessarily higher charges – that such behaviour should be tolerated. The OUR cannot support such a view.
The current OUR consultation on Guernsey Post’s tariff proposals – which is available on the OUR website, www.regutil.gg – sets out in more detail some of the issues that need to be considered in looking at competition and we would be interested to hear the views of postal users, either directly or through Postwatch Guernsey, on these issues. |
Annette Archer
Guest
| | Posted on Friday, August 07, 2009 - 08:28 pm: | |
THIS is the tale of five postcards. They were sent from Combourg, Brittany. The first two were sent to Somerset and arrived in five days. The third was sent to Perth in Australia and arrived in six days. The fourth was sent to St Martin’s, Guernsey, and took 15 days and the fifth one was sent to, wait for it, St Peter Port, Guernsey, and took 16 days.
Bring on the competition, I say. Always good for business. |
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