Treasury acts over losses at Guernsey Post

Continuing losses at Guernsey Post have prompted Treasury and Resources to react.

The trading company is due to make another substantial loss in the current financial year, following an GBP800,000 deficit in 2003.

Treasury minister Lyndon Trott told the House yesterday that two members of the department would be at all future board meetings to learn more about the problems faced and for the company to fully understand the political concerns.
He also admitted that confidence in the commercialised utility had gone down.
‘I would go even further and say that confidence in the benefits of commercialisation has diminished as a result of Guernsey Post’s past performance,’ he said.

Part of the GBP800,000 loss was attributed to increased costs from the Royal Mail – an expense that is due to continue over the next four years.
‘This will result in a substantial increase in charges to Guernsey Post.
‘In addition, the full impact of the staffing costs to meet the licence condition, which were agreed in advance between the postal authorities and the Office of Utility Regulation, will need to be absorbed. I understand that a review is under way by Guernsey Post and the OUR regarding the implications of varying these licence conditions.’

Deputy Trott revealed that it would have closer liaisons with two other States trading companies, Aurigny and Guernsey Electricity, and that the former’s accounts will be published in future.

Despite a 1,000-plus petition being handed to Guernsey Post in protest at the planned closure of L’Islet post office, Deputy Trott refused calls for his department to interfere with the company’s decision until instructed by the House.

‘But I will tell it that it is important for it to consider the timing of this.’
Deputy Trott also revealed that Guernsey Post chairman David Warr will step down at the end of the year. Mr Warr took over as acting non-executive chairman following the problems in Christmas 2002.

In a statement following the morning’s debate, Guernsey Post said that involving two States members in meetings would ensure that the department obtained a better understanding of the challenges it faced and would help in returning the business to profitability.

‘As regards my own position, I am delighted that someone with the knowledge and experience of Dudley Jehan has agreed to take on the role of non-executive chairman from the end of 2004,’ said Mr Warr.

‘I have every confidence that the board of directors, together with the senior management team, will continue to work together to achieve success.’