Since 2020, Guernsey Ports has had to rely on the States to cover a shortfall in income, including a loss of around £6 million forecast for 2023. This will bring the total amount of taxpayer funding received in the last four years to around £30 million. This situation is not sustainable in the long-term, particularly given the current pressures on public finances.
A review of all current fees and charges has therefore been carried out, to identify where additional income can be raised. Along with efficiency savings and new revenue opportunities, which will help to return Guernsey Ports to a self-funding position by 2026.
It is proposed to apply above RPI increases to a broad range of fees and charges, starting in 2024.
Guernsey Ports is mindful of the potential impact of sudden sharp rise in charges and will always try to smooth increases so that customers can adjust to these. This also gives Guernsey Ports the opportunity to monitor and take stock of any changes to service demand or usage and adapt accordingly.
For marina berths, the increase will be targeted so that owners of smaller boats will see the lowest increases. Current fees will rise by between 20% and 30% next year
Why is Guernsey Ports losing money?
The COVID pandemic is having a lasting impact. Passenger numbers at the harbours and airport have recovered since travel restrictions ended, but are still around 15% below pre-pandemic levels. As two thirds of income comes from commercial passenger, ship or aircraft charges, this reduction has heavily affected Guernsey Ports finances.
It is also dealing with a backlog of maintenance on some the island's ageing infrastructure, particularly at the harbours, which requires additional spending at a time when income has fallen.
Is it just boat owners that are being targeted?
No, the intention is to spread increases as widely as possible, with a review of all Guernsey Ports fees and charges. The focus on user charges means those who make most use of the Guernsey Ports facilities provided will contribute the most. Raising income from other commercial activity around the Ports is also being considered, including car parking at the airport, generate more income through improved duty free provision at the ports, and changes to our operating concessions. Efforts to increase provision of larger berths for local boats will also be advanced to better meet this demand.
Why not make savings?
Guernsey Ports is aiming to reduce operating costs as well as generate additional income. A full review of expenditure is underway to identify savings and efficiencies, and potential new revenue streams. The full benefit of these may take time to realise, and it is not anticipated they will be sufficient to return Guernsey Ports to a fully self-funding position.
Why do this in a cost of living crisis?
Given the current pressures on States finances, Guernsey Ports cannot keep relying on funding from the taxpayer to meet its operational and maintenance requirements. Charges will therefore have to rise, and to put this off for longer will store up more problems for the future. Phasing the increases will give customers have time to adjust to the higher costs.
Why not phase in over a longer period?
A three-year transition was considered the right balance between giving time for customers to adjust to the rising cost and the need to reduce Guernsey Ports' reliance on taxpayer funding as soon as possible. To extend it would put more pressure on States finances.
When will mooring charges increase?
The annual increase in mooring fees will apply from 1 April 2024.
How much will the increases raise?
In the calendar year 2024, the proposed increases across the Ports will raise around £5 million. However the Ports will still see an operating deficit in 2024. It will not be until 2026 at the earliest that Guernsey Ports will generate an operating surplus sufficient to fund its operating costs and the most critical elements - but not all - of its capital investment programme.
What happened to the money in the Ports Holding Account?
In the past, Guernsey Ports raised sufficient revenues to fund day to day operations and its routine capital programme. In 2019 this fund amounted to £6.3m, which was held in a reserve. Following the implementation of strict COVID travel restrictions, this reserve had to be used to cover operating costs, before arrangements had been made to cover the Ports losses. The tariff changes will enable this reserve to be reinstated over time.
Aren't boat owners already paying for the airport?
The forecast capital investment required at the harbours over the next 10 years is around 2.5 times that forecast for the airport over the same period.
Guernsey Ports operates as a single business, with shared staff resources and management across the organisation. All income from customers contributes to the cost of maintaining our operations and to the upkeep of the island's most essential infrastructure.
Why penalise the large boat owners, who already pay higher charges?
Mooring fees are calculated based on the dimensions of the vessel - usually measured in square feet. This will therefore reflect the required berth space, but larger boats also need a greater area to manoeuvre around the marina, thereby requiring wider channels and occupying more water space overall compared to a smaller boat. It is therefore reasonable to have tiered charges, according to size of vessel. For owners of larger vessels, the cost of boating (excluding mooring fees) is higher than for most, and they are generally less likely to be negatively impacted by an increase.
Will mooring charges for visitors also increase?
Yes, the rate for visitor moorings will increase by 30% (above RPI) by 2026. This will contribute more income while ensuring Guernsey remains an attractive destination.
Why is the increase for visitors less than for locals?
On a day rate basis, the mooring fees for visitors are already significantly higher than for local boat owners, and that will continue to be the case after the increases are applied. For instance, a 35ft visiting boat currently pays around £38 per day, with the equivalent charge for a local mooring being £7 per day. For a 51ft vessel, the relative costs are £49 and £14.
Guernsey Ports visitor rate is not atypical compared to other similar marina facilities in our local area, whereas for local moorings current fees are considered to be relatively low compared to current market rates for this region.
If you have any questions or wish to provide feedback, please contact Guernsey Ports by email on commercialandproperty@ports.gg.