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Geoff Southern has been preparing to call the Council of Ministers to
account over the spate of planned redundancies in the publicly-owned
utilities. This is a preview of his proposition regarding the Jersey
Water cuts:-
THE STATES are asked to decide whether they are of opinion -
To request the Minister for Economic Development, in accordance with
Article 6 of the Competition Regulatory Authority (Jersey) Law 2001, to
request the Jersey Competition Regulatory Authority to prepare for him,
for immediate presentation to the States, a report providing information
and advice in relation to the activity of the Jersey New Waterworks
Company Limited ('the utility'), being a monopoly, on the reasons for
and consequences of outsourcing all main laying and service connection
civil engineering works activity.
Report
Article 6 of the Competition Regulatory Authority (Jersey) Law 2001
states the following:
6 Functions
(1) The Authority shall have such functions as are conferred on it by or
under this or any other Law or any other enactment.
(2) The Authority may recognize or establish, or assist or encourage the
establishment of, bodies that have expertise in, or represent persons
having interests in, any matter concerning competition, monopolies,
utilities or any matter connected with the provision of goods or
services to which the Authority’s functions relate.
(3) The functions of those bodies shall include one or more of the
following –
(a) the provision to the Authority of advice, information and proposals
in relation to any one or more of those matters;
(b) the representation of the views of any one or more of those persons.
(4) The Authority may, on request by the Minister, provide the Minister
with reports, advice, assistance and information in relation to any
matter referred to in paragraph (2).
(5) The Authority shall have power to do anything that is calculated to
facilitate, or is incidental or conducive to, the performance of any of
its functions.
The employer called workers into a meeting on the evening of Wednesday
4th November at 4pm which coincided with a letter addressed to the
regional officer of Unite, the employees’ representatives being hand
delivered to his office. They were advised that all main laying and
service connection civil engineering works would be privatised resulting
in 20 job losses. The employer said that it was reviewing its operations
with a view to ‘maintaining acceptable returns for its shareholders’.
Fact 1:
Jersey Water profits were up last year by
14%
to
over £4 million.
Fact 2:
A final net dividend for the year 2008 of 194 pence per share (up
15% on the year)
on the ordinary and ‘A’ ordinary shares was declared
Fact 3:
At a meeting with the managing director and the company secretary which
took place on Friday 6th November, the company was not able to justify
the redundancies to the satisfaction of the employees and their
representatives, except to reiterate their position in relation to
shareholder dividends. Surely in today’s economic climate, the welfare
of workers and their families should be balanced against shareholder
profits? Especially when you consider that according to company
accounts, the business is buoyant.
When employee representatives expressed the above concerns to the
employer, the response was ‘do you expect Jersey Water to carry these
workers’. This is a shameful and disgraceful thing to say. Many of the
staff have been employed for 20 years or more, providing a loyal service
both to the public and the company. To be so dismissive of their own
workforce reveals a total lack of compassion on the part of the
management, which in turn reflects badly on the States, as majority
shareholder.
These attitudes are in sharp contrast to the views of the retiring
chairman expressed in his statement of 3rd April in the annual report.
“Jersey Water is a tremendous asset to the island…. It has an
infrastructure in extremely good condition, with detailed plans for the
continued maintenance and enhancement of its processing and distribution
capability for the future.”
“it is..... important that… pressure for short term gains are not
pursued at the expense of the Company’s ability to provide for the needs
of all of its stakeholders”
and finally, of the staff he had this to say:
“ I continue to be impressed with the very positive attitude of our
staff to their work throughout the company and on behalf of my
colleagues on the Board, as well as stakeholders, I take this
opportunity to thank them all for their continued support and commitment
to your Company.”
Not withstanding the position of the States in condoning this poor
behaviour on the part of the new Chairman and Board, there are other
issues which need urgent attention, many of which fall within the remit
of the Economic Development minister through the JCRA.
The following issues come to mind immediately when considering the
position of the States in relation to this monopoly utility:
1. Is the States conflicted?
Many would consider that is acting against its own best interests and
against its policies in allowing these redundancies, which will further
depress the economy at a time when the Economic Stimulus policy attempts
to maintain and stimulate the economy through the recession.
2. In consequence, why has the company not bid for Economic Stimulus
funding to bring forward mains infrastructure projects in the coming
year?
3. Is a profit of over £4 million on a turnover of only £14.3 million an
appropriate return from its monopoly position or could it be excessive?
4. Is the decision to outsource or privatize this mains engineering
activity, with the loss of 20 jobs, solely to further increase profits
and dividends in the best interests of the island and the economy
overall?
5. What skill levels exist
among the JAYEN employees by comparison with the current highly skilled
and experienced workforce? Is there a risk to standards of service
provision?
6. What proportion of the JAYEN
workforce is locally qualified? Is there a risk of increasing ratios of
non-locally qualified in this sector? Is there a reduction in the terms
and conditions of employees by outsourcing?
7. Is the States fundamentally
conflicted as majority and controlling shareholder in balancing its
interest in pursuing higher dividend against its interest in reducing
prices to residents?
All of these questions, and probably more, require answers. The States
if it is to act properly in the best interests of the island and its
residents must have those answers. Only then can it decide whether the
actions proposed by the Board of JNWW should be sanctioned. This
proposition enables the Assembly to obtain the information it needs
through the Economic Development Minister through timely action of the
JCRA.
Financial and Manpower Statement: The power of the Minister to request
such a report is contained in Article 6 (4) of the Competition
Regulatory Authority (Jersey) Law 2001 and therefore any such a request
should be catered for in the ED budget. If the report is to be timely
then this will be funded fro the 2009 budget of £594,600. It is
interesting to note that in the ED Business Plan 2010, funding to the
JCRA has been reduced because “The effectiveness of the JCRA has
developed to the stage that they now require less resource to manage
competition law policy.” Equally the Authority is resourced to meet any
manpower requirements under articles 6 (2) and (3a) above.
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