A COUPLE of sentences in the 2011 Budget report, which was released last week, provide a clue for how the island’s public sector could look in the years ahead.

The Treasury minister wrote that there are opportunities for potentially devolving some functions to the private sector which could result in some posts no longer being required.

Although his department is not leading that particular initiative, it is clear that the island possesses considerable assets that could either be sold to raise money or else returned to the private sector thus reducing the size of government.

One of the guiding principles of the Tribal Consulting work that led to the Financial Transformation Programme is to ensure that departments are only engaged in delivering essential services that cannot or should not be provided by the private sector.

Thought has already been given to what areas fall into that category and they include the harbours and airport, States Works, the sewage collection service, Beau Sejour and Guernsey Water.

That is a multi-million pound portfolio of property and business that arguably should not be in public ownership or, equally arguably, could be managed more efficiently by the private sector as its equivalents in the UK and elsewhere are.

It would also be possible to add to that by selling off some or all of Guernsey Electricity and Guernsey Post.

Many islanders and some locally-based professional operators would be pleased to invest directly into Guernsey plc although it is doubtful whether there would be much appetite for selling off 100% of assets such as the ports and Guernsey Electricity.

If a partial sell-off is to be contemplated, however, the States would have to be clear on what it was trying to achieve. As the Regulatory Policy Institute said in its report on the adequacy of regulation locally, the role of Treasury and Resources as shareholder needed to be looked at.

In reality, it is not currently geared up to sufficiently test the operating efficiency of such businesses and nor is it sufficiently clear on the returns it should be seeking on behalf of the taxpayer.

So while there is a compelling case for selling off assets, Guernsey is not ready to do so yet.