COMMENTS by this newspaper yesterday that the RPI-plus settlement for the States manual staff was not a good deal for the taxpayer may well also come to apply to the employees themselves.

The reason is that the States has committed itself to a policy of restraining its expenditure growth to at or below the rise in Guernsey’s cost of living and it cannot meet that target without restraining wages, reducing staff numbers or cutting services. All other groups of States employees will regard the 5% settlement, with its additional enhancements, as the starting point for their claims and RPI-plus will be the aspiration for next year as well.

The situation regarding established staff – the civil service – is worsened because they receive annual increments in addition to any negotiated settlement so even a cost of living agreement is guaranteed to put up payroll costs for that group by more than RPI unless other steps are taken.

Executives realise this and it is one reason why a process of change was instigated to modernise the civil service and make it fitter for today’s times. That, however, has foundered while the need for effective controls over States’ salaries has increased. And if the civil service is a tough target, the Policy Council’s attention is turning to other staff.

As we have argued before, government might have an obligation to provide services but it does not have to run them. The commercialised utilities are a vivid example of how successful trading departments can operate when they are freed from the dead hand of bureaucracy and its union-enforced ‘one size fits all’ approach.

Implementing the fundamental expenditure reviews are, in part, a reflection of that thinking. Why should government, which is inevitably more expensive than the private sector, for example be responsible for employing a business unit like the sewage cart drivers?

This approach is one reason why the States uses private contractors to maintain the cliff paths, and they do so very effectively and efficiently.

The Policy Council has drawn up a list of potential commercialisation targets and the need to examine them closely has been heightened by this latest settlement – which may turn out to be not such a good deal for Unite’s members.