THE regulator is putting Guernsey Post jobs at risk.
Chief executive Gordon Steele said the headcount would be cut by at least 16 if the Office of Utility Regulation gets its way and opening the market to competition could mean more redundancies because of the resultant two-thirds drop in revenue.
Mr Steele (pictured) said Guernsey Post expected a shortfall in revenue of up to £4m. with the regulator’s proposed changes to the reserved area and new tariffs. He accused OUR director-general John Curran of being ‘extremely misleading’.
The OUR’s central proposal is to reduce the amount of mail over which Guernsey Post has a monopoly from everything costing up to £1.35 to everything up to 65p.
‘We are concerned about possible redundancies as a result,’ said Mr Steele. He had hoped that could be avoided but, with a potential loss of 65% of revenue, it would be difficult if the company was to remain profitable.
‘The regulator’s office has also said we must reduce our administrative headcount by 16 people – this would not be possible without redundancies,’ he said.
The utility has 282 full-time employees.
Mr Steele said any such decision must be taken by the States and not the OUR.
He attacked Mr Curran’s calculations. ‘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.’
Guernsey Post’s calculations showed that the fall in revenue could be even worse, he said.
Mr Steele disputed any implication that the OUR allowed Guernsey Post to recover all of the £8m. cost increase imposed by Royal Mail and that therefore everything it wanted had been granted.
‘The reality is that what he has given with one hand has been taken away with the other,’ he said. ‘Some £2m. of that £8m. has been disallowed without any detailed review.’
He rejected a suggestion that bulk mailers would leave the island because of a rise in postal costs alone. The opposite was happening, he said, with new companies arriving and others investing in premises.
That only 8% of bulk mailers’ postal charges came from Guernsey Post while 92% was decided by Royal Mail was being overlooked, he said.
The regulator’s comments about Guernsey Post’s overheads and overtime payments having soared ignored the fact this had been imposed on it by legislation and also discounted important investments made in the company that had bettered services, he said.
‘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,’ he said.
Article posted on 19th November, 2009 - 2.30pm
5 Article Comments
If Mr Steele thinks that his claim that the OUR will cost the Post office £4million and that the response will be 16 redundancies, does that mean they are paid £250,000 each. Must all be directors I guess.
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The OUR has obviously never run a business or he would know what the consequences of his dictates would be. Guernsey Post has provided a sterling service for many many years and has generated income for the States of Guernsey. Under his supercilious recommendations, a profit making business will become a loss making one. How can the OUR have so much power that he cannot be challenged or has he. Challenge him in the Courts Mr. Steele and know that the people of Guernsey are right behind you.
Posties are an Island institution. Despite the terrible weather of the last two weeks, the posties still went out and delivered the mail. They deserve what they are paid. Would the OUR do it -of course not.
Leave our Post Office alone Mr Curran and I suggest you look at your own report. It has so many inconsistencies and contradictions, my office junior could do better.
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In response to Larry Granger. If the Post Office was run efficiently it would make a bigger contribution to the States. As it happens it is run really inefficienctly and so takes money fro the people of Guernsey and wastes it. The OUR is trying to give us a cost effective Post Office – can’t you understand that? Explain which of his recomendations are supercilious. If he keeps postal prices at an efficient level he has my support. I won’t support tyhe spendthift ways of Mr Steel who is spending all tyhe postal money on his vanity projects. If you believe in all your ideas use your own money Mr Steeel, not the hard-pressed postal user.
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It would be interesting to know how much of a pay rise the directors gave themselves when the post office was ‘privatised’ – and how the structure of the post office changed? There is probably somewhere to find this information but I haven’t found it yet. The posties have not had huge payrises.
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Does anyone else out there feel that Mr Steele’s comments of late appear to be more of a threat than a promise – ie. support us, or else… ( I’ll make people redundant)…?
I don’t have much time for either Mr Steele or his arch nemesis at the OUR, but perhaps Mr Steele and his senior management could make cuts elsewhere – like in their own very large pay packs, or by stopping the import of consultants (at huge expense) for a pretty much redundant project that he failed to investigate the viability of first?
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