States centralisation "a huge palaver and enormous waste of time"

Wednesday 25 August 2021

The Board that oversees the States' Trading Assets will ask Government to slash through the bureaucracy that has "hamstrung" the operational heads of the States-owned unincorporated businesses.

The States' Trading Supervisory Board is investigating the benefits of incorporating Guernsey Ports, Guernsey Dairy, Guernsey Water, Guernsey Waste and States Works, with a view to putting a policy letter before the Assembly later this year or early next.

There is a strong view, shared by its political and non-political members, that States centralisation of normal business practices is preventing the operational heads of those assets from employing best business principles.

Other States-owned assets Guernsey Electricity, Guernsey Post, Aurigny and James Co. are all incorporated businesses with their own commercial boards and less States intervention in their day-to-day affairs. 

Pictured: Incorporated States-owned utility Guernsey Post - led by CEO Boley Smillie - returned dividends of £1.4m to the public purse in 2020. 

STSB Vice-President Charles Parkinson, who is drafting the policy letter, wants the States to consider a shift in the way those assets are able to operate. 

"The STSB has built up significant experience now since forming five years ago. We can see the benefits of incorporation. As a group we will propose, probably early next year, to set out the case for looking at this further, if the States will agree to us doing that."

He continued: "It would put 650 people off the States payroll and onto the payroll of these businesses. But it is not mainly about that; it is about governance and decision-making at the lowest level at which the business’ decisions can effectively be made."

An incorporated States asset, for example Guernsey Post, has been able to electrify its fleet of post vans, introduce the 'Isle Deliver' service and other areas of operational investment without needing civil servant sign-off.

"However, if the airport wants to procure a piece of equipment, or States Work wants to replace one of its trucks, it has to go through the States’ tender processes," said Deputy Parkinson. 

"At the moment we waste enormous amounts of time. It just doesn’t make sense that these decisions have to go through politicians and civil servants. 

Pictured: The STSB wants trading assets such as States Works to be given more control over the running of their own business. 

Deputy Parkinson said: "It is frankly a huge palaver. These are decisions that could be made without officers or politicians getting involved, but under policies agreed by the Board of Directors."

Outgoing STSB non-States member John Hollis also spoke out against the status quo at a recent presentation to business leaders. 

"Unless we have boards close to the business making decisions, then we have hamstrung those businesses," he told the Institute of Directors earlier this year. 

Speaking again this week, he said it "would be madness" if the States were to vote against the policy letter the STSB will put to the States. 

STSB President Peter Roffey previously told Express that incorporation has to be considered, as the current system is not working as well as it could.

"I was really hopeful that the new set-up with the STSB would allow all of these businesses to operate in a manner very similar to a commercial company, to have the same agility and flexibility to follow business principles. 

"In reality, I have become convinced that as long as they are controlled by a States Committee, controlled by HR and other centralised services, that they will never have that flexibility."