Regulation model to be reviewed amid spiralling costs

Thursday 25 April 2024

Consultants are being brought in to review Guernsey's system of regulation as costs climb substantially.

The Guernsey Competition and Regulatory Authority has argued that it does not have enough funding to do its job properly already, but is facing pushback from those that feel the model is more suited to a large country than an island community.

The Assembly has debated the GCRA's 2022 Accounts, a year in which its spending on enforcing the competition law was £1.185m., well in excess of the £147,000 States grant it received for this work, driven by two significant competition investigations that year and also defending two appeals made to the Royal Court.

The shortfall is made up by Policy & Resources.

The accounts showed spending on legal and professional fees was £867,582 in 2022, compared to £34,000 the year before.

"The GCRA's ongoing competition law costs now far outweigh the current levels of annual grant and therefore a proposal for 2025 funding has been shared by the GCRA which includes a significant uplift in its funding which the committee will be reviewing in the coming weeks," said Economic Development President, Deputy Neil Inder.

"Longer term, the committee recognises that the economic and regulatory landscape in Guernsey and the wider world is changing. For that reason, the committee has drawn up a scope of work for review of the GCRA and will shortly go to tender for a specialist providers to undertake this work.

Pictured: Deputy Neil Inder.

"This will assist in setting out how the GCRA's roles and responsibilities might need to be adapted to respond to the challenges of the new landscape."

Deputy David De Lisle wants price setting to be independent of States decision making, citing rising electricity prices and mooring fees as two examples.

States Trading and Supervisory Board President, Deputy Peter Roffey was skeptical of the regulator's request for increased funding.

"I believe our system of regulation is one that is too closely aligned to a much bigger communities where the cost per head is going to be a lot less than that in our situation, and where most of the utilities are actually run by private companies that are there for profit, not to serve the community as we are with State-owned utilities."

Deputy Heidi Soulsby asked whether any talks had taken place with the GCRA about the cost of building in the island.

This was echoed by Deputy Gavin St Pier.

"I would agree that building materials and concrete in particular is the one issue which builders and developers consistently identify as one of the major costs of development which drives up costs on the island and as we've already identified through the rest of this meeting, housing and increasing supply of housing is now acknowledged as our biggest government's priority and challenge.

"I would like Economic Development and P&R engaging with the regulator to ask them to do some work around building materials and concrete in particular."

Economic Development member Deputy Sasha Kazantseza-Miller said she had asked the GCRA about opportunities for undertaking market studies and the construction industry was on the agenda, as was procurement by the public sector.