Competition plan will destroy mail service
Wednesday 21st October 2009, 2:30PM BST.
PROPOSALS to introduce competition would destroy the Bailiwick’s mail services, Guernsey Post and the staff’s union warned today.
The Office of Utility Regulation’s plan to erode the monopoly was released this morning, to the surprise and disappointment of Guernsey Post chief executive Gordon Steele and the Communication Workers Union.
The CWU warned of potential job losses and questioned the ‘unelected’ and ‘unaccountable’ OUR’s right to make such influential decisions that in its view would threaten the universal, six-day service.
The OUR’s central proposal is to reduce the mail over which Guernsey Post has a monopoly, from everything costing up to £1.35 to everything costing up to 65p.
Guernsey Post was also denied the tariff increase it requested to meet increased costs imposed by Royal Mail.
Mr Steele (pictured) said the actions would damage the company and have a lasting destructive effect, resulting in extra cost to the taxpayer.
‘The regulator’s decision will turn Guernsey Post from a company that returns a modest operating profit to the States into a loss-making public service and a drain on the island’s resources. We must have contributed £1.5m. to the States last year but, instead, we will be coming to them cap in hand.’
Opening up the market as proposed was categorically wrong for Guernsey and doing so in the UK and Sweden had damaged services to customers irrecoverably, Mr Steele said.
OUR director-general John Curran believes that Guernsey Post could cope with the changes if it was run more efficiently.
He highlighted issues such as overtime payments doubling in the last three years.
- To read Guernsey Press stories in full click here for subscription details. Individual editions are now available online.
Island Life
All about Guernsey
Ambassador of the Year 2011
History & Heritage
Visitor Information
Guernsey's government
Campaigns
Voice For Victims
Voice for Victims is a campaign aimed at promoting the rights of those affected by child sexual abuse.
This is Guernsey
Guernsey Press
Useful Links
What an arrogant bunch of fat cats the Post Office directors are. I’ve just read the OUR report and one of the main points is how much directors pay has increased – its doubled since this Gordon Steale arrived (from the UK).
Report abuse
What do we need another postal service this one does a good job leave them alone OUR
Report abuse
Tom
Fat cats! Have a look at the OUR accounts in this months billet and see how much the salary costs are.
Report abuse
Why risk breaking a system that works pretty well and returns a modest profit that returns to the people of Guernsey?
Competition is all very well if the market is large enough to support several operators, but in Guernsey?
I don’t recall the public clamour for a change – there are more important things to regulate…
Report abuse
Perhaps we could have another OUR in place to provide competition with the current lot? The current lot seems to be pretty inept, so maybe the competition would do them good!
Report abuse
On this occasion the OUR seem to have united the workers and management at Guernsey Post together with a probable majority of local consumers.
I am supportive of the regulatory function but the OUR must ensure that it does not come to be regarded as infatuated with or captured by the financial interests of a few key commercial customers.
Of course our Post office is a utility…..but, crucially, it is also a service and should remain so.
Report abuse
seems that Curran is once again trying to upset another utility.GPL and the posties do a great job so why dont curran leave alone.over 1.5 million given to the states coffers last year if curran gets his way and others can cherry pick instead of 1.5 million given, me…you…and all the others will have to pay part of our taxes to keep them going.Remember..you always need a postie to go that extra mile!
Report abuse
Guernsey post is too small to split up. The best bits will be cherry picked and bought and operated at a profit by the buyer, and the remainder will then run at a considerable loss, at a high cost to the local taxpayers. Just look at what is happening in the UK.
This is regulation for it’s own sake, and will do nothing to benefit the residents of the Bailiwick. It is economic madness and should be stopped.
Report abuse
Privatise it and save some Tax.
Report abuse
Mike. You mentioned the OUR accounts in the month’s Billet. Is that online and wherabouts is it? No wonder they don’t want any competion, bang goes their large salaries. I suppose that is why they want to keep charging us more for stamps and the like! I don’t send letters any more or packages if I can help it. I just email.
Report abuse
Hi Teresa
Go on the States of Guernsey website and you will see Billets D’Etats. Just follow the links to October ones. If I recall its the third of the ones for next weeks sitting
Report abuse
Why would anyone want to encourage postal competition from outside the island?. Guernsey Post pay all their tax into the Guernsey coffers, why give this additional income to the UK government?. Who’s complaining about their level of service or the prices they charge ? leave well alone Mr Curran and let Guernsey Post get on with delivering more profit to Guernsey next year. Why isn’t he encouraging the “I BUY GUERNSEY” campaign.
Report abuse
Theresa
I think you’ll find Mike is referring to the regulator’s own salary bill, not Guernsey Post’s. In total, the regulator and his extensive team cost Guernsey 750k a year. I don’t get it. Why are we paying that for a separate regulator when Guernsey States is the main shareholder anyway? Can’t the States just keep an eye on how efficient the utilities are being on our behalf?
This is worse than a case of “if it ain’t broke, don’t fix it”. It’s a case of “if it ain’t broke, don’t pay £750k a year to fix it”.
Report abuse
Seems to me that we are paying for a regulatory service that blatently doesnt understand its customer (Guernsey).
Report abuse
Agree with many of the thoughts here. There is nothing wrong with our current arrangement: it returns a profit to the people of Guernsey and the service is reasonably good. In fact my wife (from the UK) has commented that we often get mail from the UK quicker than UK residents do!
Is this a rewriting of “if it ain’t broke don’t fix it” to “if it ain’t broke, break it and charge the Guernsey taxpayer”? If someone can enlighten me why this serves any greater purposes than the OUR trying to justify their existence I’d like to hear it.
Report abuse
Come on OUR, this is a small post office operating on a tiny island. The competition rules that apply on the mainland are set in a completely different context.
Guernsey Post deliver our mail on time (and to the correct address most of the time !) and their charges seem pretty fair to me. How will additional competition improve that situation?
If it ain’t bust why fix it?
Report abuse
I think the O.U.R have miss the point hear. Surely a community the size of Guernsey’s cannot sustain more then one postal delivery service, which provides the service the GP does.
You don’t hear many complaints of the postal service and prices are not expensive. so why change it.
The O.U.R have been a bit short sighted. Guernsey as a small community works well and services develop to serve the community well such as the GP. Guernsey is a completely different scenario to the scenario which governs the O.U.R’s perception of rules and the recommendation they make are based on a much larger community.
In other words, stop interfering. We don’t need self righteous organisations telling us what to do with such short sightedness.
On another note prices should be regulated by an outside body to ensure the power of a monopoly is not abused.
Report abuse
We’ve been subsidising the local post for ages. Without the bulk mailers the local post would be about £1.40.
Getting rid of their monpoly is less about the mail in but more about the mail out.
Do you know what the GP does for the bulk mailers? Very little. We separate our post into the 128 UK postal zones – we bag it, weigh it an certify it. A truck turns up from the PO and takes it straight down to the boat. That gets sent to Royal Mail. So we pay top dollar for zero service because GP has the monopoly on all mail out.
GP wants to put those prices up. There are UK companies that will set up an office, negotiate a contract with RM and provide a 20% cheaper price. GP are on sticky ground.
Instead of getting dewy eyed about the postie. Have a look at the costs of running the management? Where have the locals gone over the past four years? Why are all these 3 day a weekers crawling around the place all UK contract workers.
Mail in to the island has diminished year on year. Yet their cost have risen massively.
Have a look at the facts first, peel away the onion skin of management costs and cosy relationships. The OUR is right – the GP need to reduce costs and they can start with management and the unions.
Like it or not people some of the main bulk mailers have a bunker plan to leave and operate out of Switzerland. Lose us and you have a huge problem on your hands.
And don’t believe all you read. Look at the costs. Nice business for the top management. Massive waste.
Report abuse
Surely there’s a good old Guernsey compromise to be made here? The regulator doesn’t want bulk mailers to leave the island and I’m sure Guernsey Post doesn’t either. Couldn’t the two sides work together to come up with a competitive pricing solution for bulk mail that didn’t actually involve anything as drastic as full competition? It’s the competition part that is so emotive because people can’t help but worry that losing their much-beloved posties will be the natural consequence of the cherry-picking that will result.
Speaking of people’s reactions, have you seen the Save our Post Office Guernsey Facebook page?? Some lively debate going on there…
Report abuse
It is clear that many of these commentators have yet to read the report.
In addition to the massive rise in directors fees there is the excessive cost of operating the Smith Street office and the decision to change postmen’s pay from 6 day to 5 and then to pay overtime for the 6th day – you couldn’t run a shop, pub or restaurant that way.
The OUR quite correctly takes issue with the GPL not holding to its own targets. There is also the issue of investigative costs of operating a bank which will not go ahead.
Thank goodness Guernsey’s consumers have someone on their side.
Report abuse
The OUR are picking away at the scab and the Post Office doesn’t like it but there are a few key questions which need answering –
Why does a state sponsored monopoly need such a top heavy and expensive management structure?
Why should postal rates be increased in order to provide the Post Office with funds to spend in developing unrelated diversification plans for their business?
Why does the States need an OUR when it is the only shareholder and should be competent enough to manage the postal service on behalf of the people?
Half the senior management structure at the Post office (those that are left can do a 5 day week) and half the funding for the OUR…that’ll save a few quid and we won’t even notice the difference!
Report abuse
Bulkmailer, if GP is so expensive, why do you stick with them?
Report abuse
the unions appear to have far too much power in the GP organization. What has happened to the new fleet of vans is an example of this.
ANY organization who can afford to pay this much overtime is an organization who’s product is too expensive. I find it strange that the general puplic do not appear to want value for money when it comes to Guernsey Post.
Report abuse