Guernsey Water, Guernsey Ports, and States Works could be given greater operational independence as standalone companies, under proposals expected to be debated in March.
The businesses, which are overseen by the States’ Trading Supervisory Board (STSB), would remain wholly States-owned but with less political involvement in their day to day operations. This is the same arrangement already adopted for Guernsey Electricity and Guernsey Post, which were previously run by States Committees until being ‘incorporated’ as companies in their own right 20 years ago.
If States members give approval, Guernsey Water would be the next business to be incorporated, with the target being the start of 2028.
Guernsey Ports, which operates the harbours and airport, and States Works would follow at a later date. The STSB would be directed to report back to the States by the end of next year with more detailed proposals for these businesses.
The three businesses are already tasked with operating commercially, but to all intents and purposes are still States-run operations. A number of functions are provided centrally by the civil service, including recruitment and HR, and IT.
STSB vice-president Deputy Charles Parkinson said giving individual businesses more direct control over these functions had a number of advantages: “It is no criticism of the personnel who provide these various support functions, but under the current arrangements their wider focus and priorities do not always match the specific needs of each individual trading business. A good example is being able to agree staff terms and conditions that reflect their operational requirements and priorities, rather than being determined for the public sector as a whole. In the commercial world, companies simply do not operate that way.”
Under the incorporated structure, the STSB would no longer provide operational oversight of the businesses. Instead, they would focus on setting high-level objectives, which will ensure any commercial priorities continue to be balanced alongside the island’s wider social, economic, or environmental interests.
As now, any profits that are generated will be reinvested into our operations, and to fund long-term investment requirements.
Deputy Parkinson said Guernsey Electricity and Guernsey Post provide a good example of the benefits of this arrangement. While they have operational autonomy, they remain States-owned, and therefore operate within the priorities set by government.
“The businesses within the STSB look after a lot of the island’s key infrastructure, which is very capital intensive and requires long term planning, both financially and operationally.
“There is a danger when you have too much political involvement in decision-making that it leads to more short-term focus, and that is not in the best interests of these businesses nor in the best interest of islanders.
“As incorporated businesses, Guernsey Post and Guernsey Electricity have been able to plan much more long term, while also having the flexibility and agility to respond quickly and effectively to challenges that impact them specifically, and adapt accordingly. That is the model which we believe Guernsey Water, Guernsey Ports and States Works would perform better under, which will be to the island’s benefit.”
Pictured: St Saviours Water Treatment Works. Credit: Indulge Media and Guernsey Water
