Setback for bank plan after Post spends £860k on it
Friday 6th November 2009, 2:29PM GMT.
GUERNSEY Post has spent £860,000 investigating setting up a savings bank.
Its plans recently suffered a setback with the publication of the Hunt report which said the island could not have an indigenous bank.
But it is pressing ahead through discussions with the Guernsey Financial Services Commission with the likely outcome a partnership with a private or high street bank.
Guernsey Post chief executive Gordon Steele (pictured) said it was vital for the company to diversify as its postal market declined.
The company believes that a local scheme would be well received by locals whose trust in high street banks has taken a knock during the recent crisis and who want the money to stay on-island.
If established, it would start to make profits almost immediately, probably paying back the investment within three years.
Profits from its philatelic service have been used to take the project forward.
‘The mail business is in global decline. People are now using email, Twitter, Facebook,’ said Mr Steele yesterday.
‘Our volume from the UK this year alone is down 16%, so our choices are either to nosedive into oblivion or try to do something about it. We could cut costs until we harm the core services – that’s not attractive – so we’ve tried to see what else we could do.’
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In many smaller aresa of the UK, credit unions have been set up to assit those on low incomes in both saving and borrowing.
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There are plenty of software houses with local connections that could provide what will be a small and straight forward banking system for Guernsey Post. Not sure why they need to use Oracle which will undoubtedly be expensive and I imagine require their support centre in India to have access to provide support. This would put some people off using Guernsey Post banking services.
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£860,000. Eight hundred and sixty thousand pounds. £860k. Whatever way you say it this is a crazy amount of money. And that’s just to investigate it. How much to actually set it up and operate it! No wonder they want to put the price of stamps up.
Why is it vital to diversify the company? Why not just get smaller and cut costs? All about empire building I guess. Did we commercialise the Post Office so some business fat-cats could take all the profits and gamble it on consultants and expensive vanity ideas?
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At the risk of sounding facile, if I was going to spend 860K of someone else’s money to ‘investigate’ the feasibility of a project, I think I’d employ some COMMON SENSE and check my facts before I started writing cheques….
and I would certainly think twice before pitching my angst to the media (and hence the people whose funds I’d used) about how I only ‘found out’ that there’s a strong possibility I couldn’t actually progress the project AFTER I’d spent the money.
This is just another example of the flagrant use of taxpayers money by a supposedly State owned entity that is already taking more than it’s fair share of islanders hard earned cash to give to ridiculously overpaid staff and often imported management and consultants.
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I wonder how much of that 860K was spent in Guernsey on Guernsey consultants ?
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Ray. Little to none. All imported staff on HUGE salaries with IMMENSE expenses for travel, accomodation etc.
Totally scandalous.
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Ray (and Scarlett)
So you think that for a decision that could cost the island millions (or GP customers at least), we should take a local consultant (if one even exists). Why do you think there is a market for a Guernsey based consultant to advise on the ways to set up a bank?
hhmmm…. ancient architecture and whinging consultants – we have plenty of them though.
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Billythefish
Did I read you right’Why do you think there is a market in Guernsey on how to set up a bank here?
What do you think Guernsey Finance does.
An early conversation would have put this man straight before wasting a huge amount, this really is a disgaceful waste of taxpayer money but yet again there is no accountability and why they continue not to be pressed about how they spend our money they will continue to waste it. He should be sacked.
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yes, spot on, Paul.
In case you hadn’t noticed, Billy, a lot of those residents of the ‘modern architecture’ you see around the place are members of the ‘FINANCE industry’, and the LOCALLY based ‘Guernsey Finance’ would have been a first (and very cheap) port of call for the Post Office to ask the obvious question to, before spending thousands of Tax payers money and importing consultants of immense salaries to ‘investigate’.
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So let’s be clear, Guernsey Post has squandered a million pounds of taxpayers’ money on a vanity project that did not have the approval of the GFSC. How did it get to this stage – I smell something a little fishy here.
And when will someone be held accountable for this reckless profligacy? It could easily happen again if an example is not made. We are just too weak – please show some mettle here, T & R.
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No wonder the regulator is out for blood if Gsy Post can go and spend £860K on “investigating” setting up a Bank.
In this economic climate can you imagine any other commercial organisation local or not spending that amount of money on investigating.
As an organisation owned by the states, ergo you and me, I would like to see a complete breakdown of what the money has been spent on.
If it cannot be justified then the chief executive must tender his resignation.
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