This Is Guernsey

By Nick Mollet

GUERNSEY Post may offer staff voluntary redundancy and reduce overtime as part of an efficiency drive to make savings. But chief executive Gordon Steele told workers yesterday that there would be no compulsory lay-offs.

The utility is looking to make £2m. in savings over three years - the regulator’s figure is £5m. - and has been assessing the best ways to do that.

‘We are in a pretty good position, the best it has been since commercialisation, and now is the time to push on and make change,’ said Mr Steele.

But it is introducing a restructuring programme in this first quarter of the year as it comes to terms with the regulator’s tariff capping and concerns about the future of the bulk mailing business, which contributes half its income.

‘We are looking at a number of options, which could include reduction in overtime and reduction in the number of jobs. We could look at the way we deliver the mail and postal service, but that is low down on the list,’ said Mr Steele.

‘Our external costs are going up faster than stamp prices, so we have to look internally for the efficiencies we need to take the business forward and develop new ways to generate income.

‘Working more efficiently is the best way for us to keep stamp prices down, secure jobs for the future and keep delivering the best services,’ he said.

He said GPO accepted it could not continue to rely on the bulk mail sector as that was under increasing threat from competition elsewhere and a possible change to UK VAT rules.

The company has a forecast turnover of £36m. for the financial year between March 2007 and next month.

That is up because the bulk mailers have performed well and continue to provide a great service, employing local people and investing in the island’s infrastructure, he said.

‘They represent over 50% of our income. The £36m. is not what it costs the people of Guernsey for the service,’ said Mr Steele.

‘The sad thing is the flowers business is not flourishing as we would want. I suspect it’s because of cheaper imports into the UK.’

With the Office of Utility Regulation having capped prices, the company has accepted the requirements set out by the regulator’s review and recognises it needs to become more efficient to develop the business in future.