STSB unlikely to achieve returns target

Wednesday 04 December 2019

The States' Trading Supervisory Board is unlikely to hit the aspirational £30 million target that P&R originally wanted returned to the States over the course of the Medium Term Financial Plan.

The target was set when the STSB, formed in 2016 as part of reforms to the machinery of government, was still in its infancy. It was acknowledged by P&R at the time, and in subsequent budget reports, that the figure presented a "broad brush estimate" and that there "is a risk that these returns will not prove affordable or realistic".

The idea was for the body, which governs and oversees all States trading assets and operating companies, to make a £30 million contribution to General Revenue between 2017 and 2021, in addition to any dividend paid in line with existing policy.

At the end of 2018, £10.5 million had been returned to General Revenue. That sum has been transferred to the Capital Reserve to contribute towards the funding of future infrastructure projects.

And while this brings the total returned since 2016 to £44 million, including regular dividends and other transactions outside of the MTFP, this particular target is unlikely to be met. 

Pictured: A list of capital investments made by States trading assets and operating companies in 2018. 

States Trading Assets Managing Director Simon Elliott said they were set to reach £19 million by 2021. He said Policy & Resources "is perfectly aware of what can currently be achieved". 

"The STSB has done what it said on the can - there wasn't a roadmap for us to follow but we have been very fortunate to have some very willing people coming to the board table," he said. 

"We have done what we said we were going to do and our aim is to act in the best interests of islanders."

Mr Elliott said the States runs a lot of natural monopolies and the aim is to operate in a commercial way whilst providing a customer-led service. 

"We want people to see they are getting value for money and getting good service from States entities," said Mr Elliott. 

STSB President Peter Ferbrache likened the board's role to a cruise liner - not moving so rapidly that things become out of control, but not so slow that it never makes progress. 

"[The creation of the STSB] was a brilliant move, it is very cohesive, it is joined-up government and a consistent view of how States operating bodies should work," he said. "We want it to be a steady cruise ship, not a speed boat or some ship chugging along at one knot per hour, never going anywhere because the tide is against it."

Pictured top: Guernsey Dairy, one of the States' loss-making monopolies, with, inset, Mr Elliott and Deputy Ferbrache.