L’ISLET post office is set to close under plans revealed by Guernsey Post yesterday. The outlet will be axed in an attempt to cut costs in the face of mounting losses.

But customers and politicians are outraged and plan to fight to save the service, based at the Sandy Hook Shopper.

‘They need to get their priorities right,’ said St Sampson’s deputy Ivan Rihoy.

‘This is typical of commercialisation – the people of Guernsey get pushed aside and it is money that talks.’

Earlier this week, Guernsey Post revealed that it lost more than £800,000 in the year to 30 September 2003. The ailing retail network contributed nearly three-quarters of the deficit.

‘They are now making a loss, but when it was in the hands of the States of Guernsey the service as a whole made a profit. Now they are thinking of closing down what I believe must be one of the most popular post offices. This is very sad news and it needs to be addressed carefully – the regulator should be looking at this,’ said Deputy Rihoy.

He also talked about tackling the issue with a requete in the States if possible.

Guernsey Post management is battling to get rising costs under control as the Royal Mail continues to hike up postal costs and retail business is lost.

‘The retail side has been losing money for many years – it has not just happened. In fact, the former administration closed three sub-offices in 2000,’ said managing director Mike Hall.

‘We are trying to cut costs by good housekeeping and in this financial year, we have saved £150,000.’

Mr Hall said that part of this had been through increasing revenue by maximising the opportunities to use new computer systems, selling prints and billing work for the likes of the States and Cable & Wireless.

But he warned that the loss of business from administering UK pensions, Alliance and Leicester Girobank accounts and National Savings books would wipe out £50,000 of the £150,000 saved.

Under new tariff agreements set by the regulator, the company could not cross-subsidise the retail from the post network and unlike in the UK there is no government subsidy for the retail services.

Proposals to cut costs include reducing the size of the Smith Street branch, which the company pays £100,000 a year to rent from the States.

Guernsey Post management believes that the L’Islet outlet – which loses 30p on each transaction – has to be closed to cut increasing retail costs.

‘I’m very sad – it is the only post office in the area. It will affect my business [Rihoy Electrics] and other businesses. I am concerned because I believe that it is used a lot of people,’ said Deputy Rihoy.

He was also concerned about people who get their pensions from the outlet and worried that users would not get to know about the closure or how they could comment on it.

Mr Hall said that the closure of L’Islet – the sub-postmaster is Le Riche, which employs one full-time member of staff and a shop worker who acts as cover – was in line with the Guernsey Post customer charter in that all residents would still have a post office within two miles.

St Sampson’s deputy Sam Maindonald has taken a pragmatic view.

‘I think it is very sad and regrettable but if it is losing money, it doesn’t make sense commercially and that is the problem. There are quite a few elderly people who use it and it is a shame, but if it is losing money there is no sense in keeping it open,’ she said.

Fellow St Sampson’s deputy Lyndon Trott said: ‘The decision regarding postal outlets is an operational matter. The States is concerned with high-level strategic direction only.’

* The closure is subject to a consultation period until 8 October.