With one hand tied behind their backs...

TWO key messages come jumping out of the independent assessment of whether to let the airport, harbour, Guernsey Water or States Works shake off the shackles of political control.

One is that a board of politicians is inefficient and lacking the necessary knowledge to improve the running of these businesses, the other that the process of wage negotiations creates all sorts of problems for the managers, who are trying to operate in a commercial world.

Public Services commissioned the Office of Utility Regulation to assess its different business units some time around 2008-9.

Guernsey Harbours, the airport, Guernsey Water, States Works, waste water and solid waste were all examined.

The regulator comes down in favour of change and if you pick between the lines, you get an idea that these operations are trying to work with one hand tied behind their backs.

Why it has taken so long for the report to see the light of day is anyone's guess, but the reason given by the department that it did not return in December 2009 as planned were the calls at the time for a reassessment of the role of the regulator.

Its timing in releasing this now, then, is somewhat bizarre given the independent report on the regulator has itself only just been released, with no official political response to that yet.

Clear as mud.

No need to rush these things either, because even now it is a progress report and no more than that - is there really a desire for change?

Is it telling that the OUR was not asked to look into privatisation?

Instead, its guiding principle was to assess the scope for commercialising certain services currently provided by PSD.

However politically and perhaps publicly unpopular privatisation may be, the pros and cons of it would at least create a full picture of the options available and was also raised as an option by the Financial Transformation Executive as it looks at cutting States spending.

The OUR recommends commercialising a merged water and liquid waste business, turning Guernsey Harbours into a revocable trust, looking at solid waste once the final solution is known, potentially commercialising the airport and leaving States Works as it is.

Under Guernsey's model of commercialisation, the States remains the sole shareholder in the business but it is run as an independent operation.

There are some common problems identified across the business units as the argument for change is built.

'The range and complexity of issues faced in running the six business units is vast,' the OUR said.

'The ability of any political board, which has a range of other important responsibilities in its portfolio, to manage these businesses in terms of value added in the decision process at any serious detail is constrained.

'The decision-making capacity of the PSD board, whether operational, technical or financial, has been a major aspect on which the business units have raised concerns given the political board is engaged in many instances with what are essentially diverse business decisions.'

The time available to the political masters to concentrate on each unit is also limited.

'The presentation of business papers to the PSD board can involve substantive proposals, particularly capital investment programmes, which reflect the engineering, marine and general technical background of senior managers in the business units.

'In many cases this may not be suitable for PSD board members and can contribute to an uninformative environment in which it is hard to challenge the content of the proposals put to the board and to reconcile the commercial merit of proposals with the technical/operational merit.'

It is perhaps a very wordy way to highlight the limitations of politicians when it comes to examining issues that are outside their own areas of expertise.

And then there is the one area where these business units really should be in control - their staff.

'The ability more fully to engage with employees in negotiating terms and conditions is another area where strong views were expressed, in particular, in circumstances where the operation of the business unit doesn't lend itself to a standard working day, or human resources were employed to respond to unpredictable events.'

There is a stark example of the problems of having to rely on political wage negotiators employing a 'one size fits all' approach to settlements.

States Works has to bid in competition with Ronez for roadworks contracts.

This usually happens in May for work the next year.

But the Public Sector Remuneration Committee only begins its wage negotiations in January.

'When it is considered that some 90% of the tenders it submits for the following year require assumptions about labour costs, the concerns around timing and cost uncertainty are apparent.'

Public Services believes it is making good progress on assessing the options for change.

'Subject to what is learnt over the coming months, it would seem likely that changes to the business environments of one or more of the operations could be presented to the States for consideration in 2011 or early 2012,' the department said in its report.

But you are left with a slightly hollow feeling from a report that lacks the full picture.