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Annual Report
& Accounts 2021
R.81/2022
2nd Floor Salisbury House, 1-9 Union Street, St Helier, Jersey www.jcra.je
Contents
Chair's Message 3 Chief Executive's Report 5 Introduction 6 The Role of the Authority 7 Strategic Goals 8 Prioritisation Principles and Values 9 Performance Report 13 Key Activities 14 2021 Resources 15 Financial Performance 16 Engagement Strategy 18 Measuring Success 19 Performance Analysis 22 Priorities for 2022 31 Sustainability 32 Accountability Report 33 Corporate Governance Report 34 Governance Report 35 Corporate Governance Report 36 Attendance 37 Board Effectiveness Review 37 Risk Management 38 Remuneration and Staff Report 40 The Accountability Statement 41 Financial Statements 43 Independent Auditors' Report 44 Statement of Comprehensive Income for the Year Ended 31 December 2021 47 Statement of Financial Position as at 31 December 2021 48 Notes to the Financial Statements for the Year Ended 31 December 2021 49 Meet the Team 57
This document sets out the Annual Report and Accounts for the period 1 January to 31 December 2021. It is presented to the Minister pursuant to Articles 17 and 18 of the Competition Regulatory Authority (Jersey) Law 2001.
This document takes account of the Annual Reporting Best Practice Guide published by the Office of the Comptroller and Auditor General in November 2021.
Further information on the work of the Authority is available on the website – www.jcra.je.
Stephanie Liston
I am pleased to report that the Authority has had a very active and productive year as an independent Jersey regulator. We have been proactive in identifying markets that require attention from a competition perspective. The Authority commenced market studies in the alcohol and promotions market, the freight logistics market and business connectivity and telecoms retail price comparisons. We have also responded robustly to unexpected issues as they have arisen, such as the failures of emergency call services.
Our Board is now complete and has functioned to a very high standard throughout 2021.
The Board includes:
Paul Masterton (our Senior Independent Member) brings a wide range of international commercial skills to the Board as well as excellent local knowledge.
Professor Ian Walden, Director of Commercial Legal Studies and a lecturer at Queen Mary University of London; Ian is an expert in IT, data protection and communications law.
Dr. Lara Stoimenova, an accomplished economist, is a competition and regulatory expert in both the public and private sectors.
Tim Ringsdore was appointed as the Authority's permanent CEO early in 2021 and has joined the Board as an Executive Director.
Sarah Price , our Company Secretary, continues to provide excellent governance support to the Board.
3 Annual Report & Accounts 2021
It is my pleasure to Chair such an experienced Board. We are pleased to have been able to meet in person for a number of our Board meetings. We have worked collaboratively with the Team to reach well informed and considered decisions. In particular, individual non- executive Board members have shadowed various key projects to bring their experience of best practice to the Authority.
The Authority is committed to the highest standards of good governance. We now have well established board committees to cover Audit and Risk (Chaired by Lara Stoimenova) and Remuneration (Chaired by Paul Masterton). We operate a careful spending regime ensuring Government and stakeholder funds are spent in the best interests of Jersey.
The Authority has an extremely broad brief as the Jersey competition regulator as well as the sector regulator for Ports, Posts and Telecommunications. In comparison to the UK, we are essentially the CMA, part of the Civil Aviation Authority and Ofcom – all in one. Though Jersey may be a smaller economy, the regulatory challenges are very similar and sometimes more complex.
We are working independently of and collaboratively with Government. The Authority and Government have agreed and completed both our Memorandum of Understanding and Funding Agreement. We have had regular formal and informal meetings with Government, the Scrutiny Committee, various Ministers and civil servants.
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We continue to work closely with the Guernsey Competition and Regulatory Authority (GCRA) under a separate Memorandum of Understanding. Tim Ringsdore and I have regular updates from the CEO and Chair of the GCRA. We also coordinate on various competition matters that affect the wider Channel Islands. We are aware that, particularly in the telecoms sector, there is a desire by the operators that the two regulators are aligned in relation to 5G and telecoms security.
Over the next 12 months we will be undertaking a strategic review of both the Ports and Posts sectors so that we can better understand what support and changes in their responsibilities might be appropriate in the future. As part of this review, the Authority Board has met with the Boards of Jersey Post and the Ports of Jersey during the year. These meetings have provided valuable information so that we can plan how to address their current challenges as normal business resumes.
Telecoms has been both challenging and time consuming over the last 12 to 18 months, with a number of investigations highlighting the need to support effective competition. I am pleased with the outcome of the recent wholesale broadband access review. We look forward to seeing new products and lower retail prices offered by all operators for the benefit of Jersey consumers.
We did impose some significant fines as a result of our investigations into emergency service failures. This was necessary in light of the seriousness of the failures. The Authority is focusing on resilience and reliability within communications networks. We are continuing to work closely with operators on delivering the right outcomes. We would like to provide Jersey residents with confidence
that the Authority will take the appropriate action necessary to protect Islanders.
I expect telecoms to remain a significant part of our regulatory responsibilities as the industry continues to move at a fast pace. The Authority will remain informed and ready to react to new demands and technologies as they arise. Two areas of focus in the coming year will be the consideration of the introduction of 5G technology and licences as well as implementation of telecoms security measures.
Throughout the year we have undertaken significant stakeholder engagement to enable us to better understand the challenges faced by the sectors we regulate and by Government. What we have learned is reflected in our strategy. We launched our 2022 Strategic Plan at a breakfast event on Wednesday, 3 November 2021. We were very pleased to present our plan to a group of stakeholders. It is our aim to continue to be transparent and accessible to all.
As a small nation regulatory authority, we are determined to be best in class. Through our personal engagement, we are pleased to find people asking for our advice and guidance on a wide variety of subjects affecting the Island.
Our overall approach is to listen and work proactively with stakeholders. We prefer this approach to confrontation. We have significant powers which we have exercised and will continue to use, as appropriate. However, we are concentrating on being forward looking and focusing primarily on positive and lasting outcomes for Jersey.
Chief Executive's Report
2021 continued to be dominated by the impact of the Coronavirus Pandemic. Despite the challenges this presented, the Authority managed to complete the internal structure in the early part of the year. We now have a small but extremely talented team, supported by a panel of external experts. The objectives for the Authority were clearly communicated and managed, which resulted in effective performance throughout the year.
Impact of the Coronavirus Pandemic
The Authority remained flexible in its approach to many unique challenges, this included working from home (WFH) but maintaining close communication with all stakeholders during these home working periods. A number of board meetings were undertaken remotely but these were managed effectively with no impact to decision making.
The Authority worked, and continues to work, to support its regulated sectors and businesses and when the WFH restrictions were lifted we managed to undertake face to face board to board meetings with Ports, Post and a number of telecommunications companies.
Despite the challenges faced, the Authority continued to meet its legal duties and functioned to a very high standard through another challenging year.
JT to reduce its wholesale cost of broadband services over the next five years to other operators has already resulted in more competition, greater choice and value for all Jersey citizens. We will continue to monitor the retail price to consumers. Initial work to support 5G spectrum allocation commenced and will continue in 2022.
The Authority works closely with the GCRA under a separate MOU. We will continue to work with the Jersey Regulators Forum to look at key issues that are affecting the Island and collectively working with Government and local businesses to develop appropriate policies for the future.
The Authority also spent considerable time discussing various topics with Ofcom, the CMA and other regulators from small nations across the world. This international engagement assists us in our ambition to be best in class in everything we do.
The 2022 business plan was consulted upon and published in December 2021 and has been supported in its content and approach. It continues to be an ambitious plan, which is designed to provide a clear understanding to all stakeholders as to where the Authority will focus its limited resources to deliver the best results possible.
We also presented and published our longer-term strategic plan which, provides all stakeholders a view of the Authority's future focus and ambitions.
We are grateful to all our regulated sectors for the
excellent support they provided to the consumers and At the end of 2021, the Authority is in a strong position business throughout the year. to continue to focus on Jersey and Jersey consumers.
We will continue to engage with all stakeholders and focus Performance on key projects that help markets work efficiently in the
interests of consumers, businesses and the wider Jersey During the year officers commenced three separate economy. We look forward to encouraging innovation, market studies and provided competition law guidance investment, value for money, choice and quality, making to local businesses and government. This work is funded Jersey an attractive place to do business.
through a government grant and marks a significant
improvement on performance for many years. The I would like to thank my team for their professionalism, board to board meetings with Ports and Post helped dedication and commitment during a very challenging improve relationships and provided an opportunity to year.
share strategies and discuss specific issues. A key area
of discussion related to the need to undertake sector Tim Ringsdore
reviews, this was accepted. This work will commence CEO
in 2022.
The telecommunications sector continued to be challenging with two ongoing investigations taking up considerable time. The decision by the Authority to direct
Introduction
The Jersey Competition Regulatory Authority (the investment, value for money, choice and quality, Authority) is established by way of the Competition and making Jersey an attractive place to do business. Regulatory Authority (Jersey) Law 2001, with further
functions and legal duties relating to competition law This markis ets in gto achieoods and serve the vision vices fof or Jerhealthsey y.and sustainable and economic regulation set out in legislation passed by
the States of Jersey to which the Authority is ultimately To support this objective, the Authority, as an accountable. independent body, has a broad range of formal powers
to ensure that competition law and its regulatory duties The Authority is responsible for promoting competition are upheld.
in the supply of goods and services in Jersey, together
with the economic regulation of the ports, postal and The year 2021 was the first full year the Authority telecommunications sectors. operated as a standalone organisation in Jersey only,
following the end of the joint arrangement with the The Authority's mission is to help markets work GCRA in June 2020.
efficiently in the interests of consumers, businesses and
the wider Jersey economy by encouraging innovation,
Article 6, Competition Regulatory Authority (Jersey) Law 2001
01 The on it Authority by or under has such this functionsor any other as are Lacw onor ferraned y
other enactment.
02 The or eAuthority ncourage mathe y resectognise ablishmenor est tofablish, , bodies or assisthat t
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.
03 The more of the ffunctions olloof those wing: bodies shall include one or
- The provision to the Authority of advice, information and proposals in relation to any one or more of those matters; and
- The representation of the views of any one or more of those persons.
04 The provide Authority the Minismay, on ter requeswith t reports, by the Minisadvice, ter,
assistance and information in relation to any matter referred to in paragraph (2).
05 The anything Authority that isshall calculahatved e the to facilitpower ate, to or do is
incidental or conducive to, the performance of any of its functions.
Introduction
The Role of the Authority
Legislation
Competition (Jersey) Law 2005
Air and Sea Ports (Incorporation) (Jersey) Law 2015
Postal Services (Jersey) Law 2004
Telecommunications (Jersey) Law 2002
Role
This Law promotes competition in the supply of goods and services in Jersey. Competition Law is designed to deal with three main issues: anti-competitive arrangements, abuse of a dominant position in a market, and mergers that are harmful to competition. In line with its Strategic Objectives, the Authority aims to ensure that consumers and the economy benefit from competitive markets.
This Law enables the Authority to license port operations in Jersey. The Authority's primary duty under this Law is to best protect and further the interests of users of port operations, where appropriate, by promoting competition in the provision of port operations. In addition, to ensure that provision is made to satisfy all reasonable demand, both current and prospective, for port operations, and that they are provided efficiently and effectively.
This Law empowers the Authority to license companies providing postal services that concern Jersey. The Authority's primary duty is to ensure that postal services are provided so as to satisfy all current and prospective demand. The Authority provides oversight of Jersey Post's behaviour and charges, as well as ensuring quality of service provision and universal service obligations (which ensures all users receive a minimum level of service) are met.
This Law empowers the Authority to license the provision of telecommunications systems in Jersey. The Authority's primary duty in this respect is to ensure that telecommunications services are provided both within and between Jersey and the rest of the world so as to satisfy all current and prospective demands for them, wherever arising. In the telecoms sector, the Authority carries out its functions in a way that maintains well-regulated Jersey telecoms markets, supports retail competition and the path to next generation connectivity (5G) and co-ordinates spectrum and number management with Ofcom (the UK telecoms regulator).
Strategic Goals
In 2021, the Authority published its mission to help markets work efficiently in the interests of consumers, businesses and the wider Jersey economy by encouraging innovation, investment, value for money, choice and quality, making Jersey an attractive place to do business.
This is to achieve the vision of healthy and sustainable markets in goods and services for Jersey.
To achieve these, the Authority has four strategic goals which are interrelated and mutually reinforcing:
Strategic Goal 1: • Enforce competition law effectively – with a key focus to prevent the
application of anti-competitive arrangements and the abuse of a dominant Protect and encourage competition position in a market and to assess mergers to prevent any substantial
lessening of competition.
• Encourage competition where appropriate and proportionate – use the market studies regime to address issues with competition in those markets where change would most benefit islanders.
Strategic Goal 2:
Deliver effective supervision of regulated sectors
Strategic Goal 3:
Safeguard consumers
Strategic Goal 4:
Establish the Authority as a respected organisation
8 Annual Report & Accounts 2021
• Ensure the effective regulation of specified sectors.
• Encourage continuity and security of supplies of goods and services by enabling environmental and other best practices.
• Using both competition and regulation powers, empower consumers to exercise informed choice and help markets work in the best interest of Jersey as a whole.
• Support and work effectively alongside other Jersey consumer bodies.
• Build knowledge and capability to meet future requirements and challenges.
• Complement and support the work of regulatory and enforcement authorities in Jersey (and beyond) and act as a trusted advisor to Government.
www.jcra.je
Prioritisation Principles and Values
During 2021, the Authority consulted on a revised set of Prioritisation Principles which it believes better align with its overall future objectives. These were published in May following a public consultation.
The Authority has strategic choices to make in deciding which areas to focus its limited resources and the appropriate approach to further its aim. The Authority will make these strategic choices based upon its remit under the various laws that apply to it, as well as drawing on the intelligence and analysis gathered through its research and stakeholder engagement. In prioritising the use of its resources, the Authority will take an evidence-based view of the likely contribution to its strategic aim in the short and longer term.
The list of factors to consider under different principles is illustrative and not exhaustive. We will not apply these principles in a mechanical way. Judgement and reasoned balancing are required for each case, which necessitates that we consider the principles in the round and on a case by case basis.
In some cases we have a legal duty to act once certain relevant circumstances arise. For instance:
• Once we have discovered or been notified of
a breach of licence condition of one of our sector licensees;
• We have a function to obtain and review information relating to merger situations;
• We have a duty to conduct regulatory appeals and
references in relation to price controls, terms of licences and other regulatory arrangements under
sector specific legislation; and
• We have a duty to act if we receive a Ministerial direction.
During prioritisation we will consider the timing and resource requirements of our work to ensure that the Authority's duties are appropriately met within the confines of the resources available to the Authority.
The Authority makes best efforts to abide by Nolan's seven general principles that underpin public life, namely: selflessness, integrity, objectivity, accountability, openness,
honesty and leadership.
Prioritisation Principles
- Impact What would be the likely direct effect on consumer or citizen welfare in the market or sector where the intervention takes place?
Consumer welfare includes better value for consumers in terms of price, quality, range of services, both static and dynamic, and may also include non-financial detriment such as the avoidance of physical harm or emotional distress. We may prioritise work because the direct effects would specifically benefit disadvantaged consumers.
What would be the likely indirect effect on consumer welfare?
This principle captures further improvement to citizen/consumer welfare and citizen/consumer confidence that results from changes in consumer, business or Government behaviour which is prompted by the Authority's actions. We intend to both capture deterrence and improve awareness for consumers, citizens, business and Government.
What would be the expected additional economic impact on efficiency, productivity, innovation and the wider economy?
This captures whether, as a result of our actions, efficiency would be expected to increase or growth and innovation be encouraged in a particular sector and across the Jersey economy.
- Strategic Does the work fit with the Authority's strategy and with other objectives of the Authority? Significance
This will include whether there are elements of strategic significance of the work that are additional to impact. The Authority will periodically review and publish its strategy in line with its overall ambition of being consistently a best in class regulator.
Many of the duties placed upon the Authority are in fact essentially about protecting principles of fairness to consumers and fair play in commercial behaviour between businesses. Such benefits do not readily lend themselves to measurement in terms of monetary value but require a more subjective assessment of their value. The majority of areas in which the Authority is involved will involve strategic as well as tangible financial cost/benefit considerations.
Is the Authority best placed to act? Alternatives to Authority action could include:
• Private enforcement; and
• Action by other regulators and stake holders, such as members of the consumer council, the Jersey Financial Services Commission, the Channel Islands Financial Ombudsman, the Jersey Office of the Information Commissioner or Government legislation and policy.
What would be the impact of the new work on the balance of the Authority's current portfolio of work?
By ensuring the projects we do are aligned with the Authority's strategic aims, have an appropriate impact and consideration of the resource constraints, we will ensure that our portfolio is balanced and focussed on the most important issues.
- Risks What is the likelihood of a successful outcome?
The higher the likelihood of a successful outcome, the more likely we are to open or continue an investigation or to take a particular enforcement action. A successful outcome is one that helps us to achieve one or more of our strategic goals.
Scale of detriment.
In some cases, the likely scale of the detriment may be such that a project should be pursued despite there being a small likelihood of success because it will nevertheless provide clarity on the law. We also consider the overall balance of risk across the whole of the Authority's work portfolio.
Need for consistency.
In other cases the desired impact may be to establish consistent standards, create legal certainty and send clear long-term messages rather than "win" a case. We will balance the risk of short-term failure with the chances of long-term success. We are also subject to challenge and take account of this in our decisions.
Risk management.
Risk is inherent in everything that an organisation does. Consequently, good risk management at all levels is a critical success factor for any organisation. A core component of good corporate governance is risk management. The Authority will therefore carefully manage risk throughout the process of making decisions on its work programme.
- Resources Proportionality.
We will only decide to open or continue an investigation or to take particular enforcement action if we are satisfied that the resources required are proportionate to the expected short/long term benefits (taking into account any risk that they may not be achieved). We may decide to open or continue an investigation or to take enforcement action that is resource-intensive because we consider that, having regard to its impact, strategic significance and risk, it is a good use of our resources. Conversely, we may decide to terminate or not to open an investigation or not to take enforcement action that is relatively resource-light because it is still a poor use of our resources.
What are the resource implications of doing the work? We will have regard to
• The level of resource that is likely to be required;
• Whether the resource requirements of the work are proportionate to the benefits of the work;
• The period over which the resources are required;
• The alternative uses to which that resource could be put; and
• Any savings created for the Authority by enabling us to meet our objectives more efficiently.
We will consider not only our internal resource requirement, but also what external resource we may need (such as outside counsel or consultancy advice).
Values
During 2021, the Authority abided by the principles of openness, integrity and accountability – and those standards which are widely recognised as being applicable to public service, and to the conduct of all involved in public life.
The Authority has published its values as part of the establishment of its Strategic Goals in 2021. In achieving those goals, the Authority aims to live by its values:
Trusted and Independent
Collaborative and Considerate Diverse and Inclusive
Proactive and Evidence Based Determined
We engender trust by making clear and proportionate decision, being open and transparent and working for the public interest.
We listen and engage with all stakeholders.
We promote diversity and equality inside and outside of our organisation by treating everybody with respect and dignity.
We seek to have maximum impact by holding a proactive, independent non-judgemental and inclusive outlook.
We balance the use of soft and hard powers, are resolute in our decision-making, while being innovative in our approach.
Performance Report
Key Activities The tdecisions and publicable below recorations made in 2021. ds some of the key activities,
February
Competition (Merger control)
Jersey Post, Woodside Logistics
– Decision
Telecoms
Emergency Call Failures Financial Penalties – Information Note
Business Connectivity Market Review
– Information Note
March
Competition
JT Sure competition law investigation
– Information Notice
May
Prioritisation Principles published
Telecoms
Network Sharing Licence Modifications JT and Sure
June
Competition (Merger control) Digital UK, Freesat – Decision
July
Competition (Market study)
Freight logistics market study
– Terms of Reference
Telecoms
BCMR Final Decision – Market Definition and SMP assessment
Licence Modification JT and Sure
– Final Notice
Telecoms Statistics and Market Report 2020 issued
Wholesale Broadband final decision August
Competition (Merger control)
JJ Fox Ltd, A E Surcouf (Easenmyne)
– Decision
August (cont.)
Scientific Games, Sideplay Entertainment – Decision
Telecoms
Caller Line Identity – CFI / Consultation
September
Competition (Market study) Launch Alcohol Pricing and Promotions Telecoms
JT July 2021 Outage Information Note issued
October
Telecoms
Wholesale Broadband Price Control – new pricing implemented
November
Government Funding Agreement and MOU published
JCRA: Strategic Plan launched Competition (Market Study)
Telecoms Retail Pricing Terms of Reference published
Competition
Channel 5, Digital UK – Merger Decision Telecoms
Mast Audit published
December
2022 Business Plan published Competition (Merger control)
Sky UK, Paramount Pictures - Decision Post
Jersey Post Licence Modification issued
Telecoms
Directory Information Services – CFI / Consultation launched
999 Guidance Consultation launched
2021 in Numbers
1
2 major elaunchvent 50%incrin LinkfAug - Decolloease weredIn s
telecoms
licence
2 t• Business cmodificelecommunicationsonnectivityation
price reviews
• Wholesale broadband
2 telecommunication
penalties
3 tinelecvesommunictigationsation 5 cguidelinesommenced
7 published k• Prioritisa• Annual reporttion Principlesey papers
• JCRA strategy
• 2022 Business plan
• Telecoms statistics report
• Funding agreement
• MOU with Government
26 33 press releases LinkedIn posts sent out (2 per (3 per month month average) average)
2021 Resources
The Authority is supported by a number of permanent staff and specialist consultants with the appropriate skills and experience to undertake the work required.
Tim Ringsdore was confirmed into the permanent role of Chief Executive in February 2021, bringing further stability to the organisation. He was appointed as a Member of the Authority on 14 September.
During 2021 the CEO appointed a General Counsel, Finance Officer and Office Manager in support of its work across all sectors. The Authority will continue to support personal development for all officers to ensure we have the appropriate in house skills to deliver the business plan.
As a result of having a very small team a resource mitigation plan will be developed in 2022 to ensure that risks of losing key personnel are offset and our work continues in an effective and efficient manner.
Officers also have the ability to draw on a number of specialist consultants to support key projects that require expert help.
The MOU with the GCRA remains in place with regular communication taking place.
The MOU is designed to:
– Enhance the exchange of information between the Authorities;
– Promote, insofar as possible, cross-border
co-operation in investigation and enforcement; and
– Enable, insofar as possible, the Authorities to
assist each other in training and education relating, in particular, to competition law matters.
Key Issues and Risks
The key issues and risks faced by the Authority in delivering its objectives were identified as:
- Relationship with Government
– ensuring a balance of accountability and independence
- Relationship with Stakeholders
– ensuring an appropriate relationship with regulated entities and other regulators, developing and maintaining the reputation of the Authority
- Delivery
– dealing with planned and unplanned work programme, ensuring sufficient resource and expertise is available to meet its duties and objectives.
More information on how
the Authority approaches such issues and risks can be found in the Accountability Report.
Financial Performance
All of the activities undertaken are separately funded, and by sector. Cross-subsidisation is not permitted to ensure that all costs are ring-fenced by sector, and common costs are shared between sectors. A working capital balance and an appropriate level of reserves were maintained at all times.
A budget for expenditure was set for the Authority of £1,540,786 for 2021 (2020: £1,261,289). This covered regulatory and competition law activities.
The Authority were updated on a regular basis of the expenditure against budget, and in 2021 total expenditure was 4% under budget for the year. The most significant under spend being within salaries, which was largely offset against over budgeted costs in consultancy and legal fees.
Income Licence Fees
Sector specific regulation is funded through licence fees paid by licensed operators in each of the ports, post and telecoms sectors. The licence fees are calculated based on the forecasted cost of regulating the sector for the year in question. Any surplus licence fees above costs are either returned to operators after the year end or held to fund future work.
A breakdown of the licence fees charged, the cost of regulating the sector and surplus/(deficit) for the year is provided below.
£ Ports Post Telecoms
2021 2020 2021 2020 2021 2020 Licence & application fees 180,000* 90,000 20,000 22,000 688,954 665,781
Costs 56,576 32,343 31,076 7,190 707,095 771,416 Surplus for the year 123,424 57,657 (11,076) 14,810 (18,141) (105,635)
*The Ports licence fees have increased to £180,000, being in line with prior years, with the fees and reserves to be utilised for the review of Quality of Service in line with the published Business Plan for 2022.
Merger and Other Fees Grant Funding (Competition)
Fees are received from parties making applications Grant funding is received from government to cover for approval of notifiable mergers and acquisitions. the cost of administering and enforcing competition These applications and costs are, by their nature, law. The initial grant approved for this work in 2021 of unpredictable. During 2021, these fees amounted £577,000 and was increased by £114,000 in relation to to £45,000 (2020: £50,000). In total, the cost for all two additional market studies, to grant in total £691,000 merger and acquisition activity was £26,676 (2020: (2020: £350,000).
£12,584), resulting in a surplus for the year of £18,324 In total, the cost for all competition law activity in 2021 was (2020: £37,416). Any cost in excess of fees received are £653,022 (2020: £325,303), resulting in a surplus for the funded through the competition law grant. year of £37,978 (2020: £24,797). Grant income in excess
of costs is, with the agreement of the Department, either returned to government or held to fund future work.
Financial Performance
2021 Summary of Income, Expenditure and Net Surplus/(Deficit)(£)
900,000 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0
Competition | Ports | Postal | Telecoms | M & A |
|
|
|
|
|
-100,000
-200,000
Income Expenditure Net surplus/(deficit)
Income Analysis of 2021 Costs Expenditure
2021 Income 2021 Cost Analysis 2021 Expenditure
Competition (43%) Supplied & Services (3%) Competition (44%) M & A (3%) Office Premises (4%) M & A (2%)
Ports (11%) Establishment (9%) Ports (4%)
Postal (1%) Consultancy & Legal (32%) Postal (2%) Telecoms (42%) Salaries & Staff (51%) Telecoms (48%)
Engagement Strategy
Principle 1: Public and Consumer Benefit
We work for the benefit of the public and consumers in Jersey, ensuring there remains strong choice, value and protection. We accomplish this through engaging with consumer and business groups to understand the specific needs of our citizens and businesses.
Principle 2: Transparency and Communication
Whilst maintaining our duty of confidentiality, we ensure openness and transparency with stakeholders, working on the basis of no surprises'. Clear and regular communication to all stakeholders is a priority for the whole organisation.
Principle 3: Working closely with Government
While independent in its decision making, it is essential we work in close collaboration with Government, to ensure that our work programme remains aligned with policies and the strategic plan. We provide independent advice and guidance where necessary to inform and assist with the development of Government policy.
Principle 4: Engagement with Licensees / Stakeholders
We will maintain close working relationships with licensed operators and wider stakeholders ensuring that we remain aware of key issues affecting them.
During 2021 the Chair, Members of the Authority and the CEO undertook an intensive engagement programme, meeting with all regulatory sectors and key stakeholders within Government and businesses.
This reminded stakeholders of the Authority's role and responsibilities, as well allowing in depth discussions regarding specific issues that were affecting the various sectors the Authority is responsible for. As a result of these discussions we finalised the Authority's strategic approach and officially launched our strategy at the end of 2021 and subsequently developed a new 2022 business plan that will help deliver positive outcomes for the Island and its consumers.
Officers of the Authority also developed closer working relationships with a wide range of individuals and industry bodies, such as the Institute of Directors, Chamber of Commerce, Jersey Consumer Council, Ofcom and the UK
18 Annual Report & Accounts 2021
Competition and Markets Authority, which has allowed us to reach a wider audience, clarifying key projects and benefits to the community.
Officers also commenced three major market studies. These required significant engagement with a wide variety interested parties to ensure the Authority was clear about the terms of reference before commencing these significant projects, which will be concluded in 2022.
Media coverage remained positive and officers also supplemented PR through various LinkedIn video posts which allowed further information and updates to be supplied about the 2021 Business Plan to interested parties.
Given the modest size of the Authority it is vital that focus is on projects that provide the best possible support for the community and economy. In order to maximise impact of any intervention, the Authority builds its engagement and trust around four key principles.
www.jcra.je
Measuring Success
VALUE FOR MONEY FOR JERSEY CONSUMERS
This section provides an overview of how the Authority measured its success over the year.
Success Criteria Further Detail
Reviewed in 2021 2021 Objective: Ensure appropriate and proportionate price controls are in place and
regularly reviewed for regulated sectors. In 2021, a rolling programme of reviews will be developed.
2021 Delivery: Ports: changes to the Ports of Jersey charges were reviewed by the
Authority in 2021. No changes were made to the price control framework.
Post: Jersey Post made some changes to its postal charges which it notified the Authority and its customers ahead of implementation.
Telecoms: During 2021, market and price reviews were carried out for the Business Connectivity Market and Wholesale Broadband Access Services.
CONSUMER CHOICE
Success Criteria Further Detail
Customer Support 2021 Objective: Ensure appropriate and proportionate controls are in place and
regularly reviewed for regulated sectors. In 2021, a rolling programme of reviews will be developed.
2021 Delivery: Telecoms: Fixed Line CLI: Consultation commenced with key
stakeholders on Call Line Information, which will help prevent harm to consumers and will conclude during 2022.
Directory Enquiries: Stakeholders were consulted with during 2021 on the future requirements for these services and this will be concluded in 2022.
DESIRABLE GOODS AND SERVICES
Success Criteria Further Detail
Quality of Service 2021 Objective: Ensure appropriate and proportionate Quality of Service standards Standards and reporting are in place and regularly reviewed for regulated
sectors.
2021 Delivery: Ports: Reporting was re-established during 2021 following a break
due to the Pandemic.
Post: Due to the ongoing working from home guidance we have agreed to delay Quality of Service reporting until Q2 2022.
Measuring Success
DESIRABLE GOODS AND SERVICES
Statistics Reporting 2021 Objective: Review publication of industry statistics for all regulated sectors to
ensure they are relevant, add value, and support Government policy objectives.
2021 Delivery: Telecoms: This is joint project with the Guernsey Competition and
Regulatory Authority and Statistics Jersey. The approach and presentation of the report was refreshed and the report
was published in July 2021.
Compliance 2021 Objective: Spectrum and Numbering: The annual mast audit was undertaken
in Q4 and a report was published on the Authority's website, once again all operators are working within ICNIRP guidelines.
2021 Delivery: It is the Authority's intention to continue with mast audits on an
annual basis.
MARKETS THAT WORK WELL FOR JERSEY
Success Criteria Further Detail
Competition 2021 Objective: Carry out investigations into possible breaches of Competition Law Investigations in line with prioritisation principles. At the end of 2020, there was
one open investigation into a potential breach of Article 8.
2021 Delivery: The investigation into a potential breach of Article 8 of the
Competition Law was closed in March 2021 without coming to a formal decision. However, the initial investigation prevented any business or consumer harm and new licence conditions were imposed on operators as a pragmatic and positive outcome.
At the end of 2021, there was one investigation which was actually opened formally in January 2022 into a potential breach of Article 21.
Investigations 2021 Objective: Telecoms: Investigate potential breaches of the law and licence
conditions by licensed operators. As at the end of 2021, there are two open investigations in this sector.
2021 Delivery: 2020 Outage & Emergency Calls: New directions were provided
to JT and it is anticipated this investigation will be completed in early 2022.
2021 Outage: Directions were provided to JT and it is
anticipated that this investigation will be concluded, in the first half of 2022.
Measuring Success
MARKETS THAT WORK WELL FOR JERSEY
Merger Control 2021 Objective: Assessment of mergers notified for clearance in line with published
guidelines and administrative target dates.
2021 Delivery: There were six mergers cleared in 2021, and numerous informal
discussions throughout the year.
Advocacy and 2021 Objective: Promote and support competitive markets in Jersey, by the Training provision of information and guidance in a variety of forms
as appropriate for different stakeholder groups.
2021 Delivery: This area of work was challenging in 2021 due to the Pandemic,
however officers engaged with a wide variety of stakeholders either face to face or via video conferencing, used LinkedIn to promote its work and preparation work was carried out ready for a wider campaign in 2022.
MARKETS THAT WORK WELL FOR JERSEY
Success Criteria Further Detail
Market / Price Reviews and Market Studies
2021 Objective:
Develop a rolling programme of market/price reviews and market studies for regulated and non-regulated local markets respectively.
2021 Delivery:
Competition / Market Studies: The Authority is a member of the Consumer Protection Network, which brings together various Jersey regulatory and consumer bodies.
In 2021 the Authority developed a long list of potential candidate markets which were screened to determine those most relevant to Jersey. The subsequent short list was then assessed against a structured range of criteria to rank in order of desirability. This led to the selection of freight logistics as the first market study to be launched in July 2021. The study is due to complete in June 2022.
Alongside the freight logistics market study, in September 2021 the Authority launched a market study into Alcohol Pricing and Promotions. In November 2021 the Authority launched a market study into Telecoms Retail
Pricing. All three market studies are due to complete in 2022, though there is likely to be follow up work flowing from the studies.
Telecoms: The wholesale broadband access services price review successfully concluded in September 2021. This was a major project and the outcome was that the wholesale price of broadband in Jersey will start to come down over a five-year period, encouraging more competition in the marketplace and therefore benefitting consumers. This has already encouraged Airtel to enter the market, creating more competition for the benefit of consumers.
Stage 1 of the business connectivity market review, which set out the relevant market definitions and significant market power assessments, was completed in July 2021. Structured engagement on Stage 2 of the review, remedies, took place in November 2021. The review is expected to conclude in 2022.
Competition law and economic regulation seek to achieve economic efficiency and sustainable competition, which allow consumers to have the benefits of fair prices, desirable goods and services and the opportunity to choose what they want to buy. In contrast, where firms have a great deal of market power, consumers are more likely to encounter unfair prices, inferior products and a lack of responsiveness to their needs.
It is vital that the Authority remains independent so that it supports the interests of the Island and its citizens without external undue pressure or influence. The 2021 Business Plan set out the objectives for the year. The table below sets out how the Authority performed against these objectives over the year.
Summary
2021 was a challenging year with new team and Members of the Authority, as well as the pandemic causing everyone to work remotely for long periods of time. However, officers worked to deliver on the business plan and all major projects were either delivered on time or remain in line with project milestones - three key market studies; freight logistics, alcohol pricing and promotions and telecoms retail pricing were commenced, and the results will be published in 2022.
There were several mergers and acquisitions along with many enquiries where guidance was provided, which officers dealt with in a timely and professional manner.
Significant officer time and expertise were spent on telecoms investigations with two fines being issued to
operators as a result of emergency call failures. The Authority and officers spent considerable time building relationships across all sectors of our responsibility along with other key stakeholders, the engagement has resulted in a better understanding of the Authority's responsibilities, enhanced our reputation and built mutual trust and respect.
The Authority and team have developed a strong working relationship. Our aim of being best in class as a small nation regulator is now a reality. We are confident that we will continue to deliver value to the Island and its citizens, ensuring we achieve our vision of healthy and sustainable markets in goods and services for Jersey.
ADMINISTRATION OF COMPETITION LAW
The Competition (Jersey) Law 2005 promotes competition in the supply of goods and services in Jersey.
In line with its strategic objectives, the Authority aims to ensure that consumers and the economy benefit from competitive markets. As with most competition laws in the world, in Jersey, competition law is designed to deal with three issues associated with problems arising from market power:
• Anti-competitive arrangements;
• Abuse of a dominant position in a market; and
• Mergers that are harmful to competition.
Work Area Further Detail
Competition 2021 Objective: To carry out investigations into possible breaches of the Competition Law. investigations 2021 Delivery: The investigation into a potential breach of Article 8 of the Competition
Law was closed in March 2021 without coming to a formal decision. However, the initial investigation prevented any business or consumer harm and new telecoms licence conditions were imposed on operators, giving a pragmatic and positive outcome for the case.
At the end of 2021, there was one investigation which was actually formally opened in January 2022 into a potential breach of Article 21.
Merger Control 2021 Objective: Assessment of mergers notified for clearance in line with published
guidelines and a 25 working day administrative target date for Phase 1 clearance.
2021 Delivery: There were six mergers cleared in 2021, and numerous informal discussions
throughout the year.
Advocacy and 2021 Objective: Continue to promote and support competitive markets in Jersey, by the Training / provision of information and guidance in a variety of forms as appropriate Competition for different stakeholder groups.
Guidelines 2021 Delivery: This area of work was challenging in 2021 due to the Pandemic, however
officers engaged with a wide variety of stakeholders either face to face or via video conferencing, used LinkedIn to promote its work and preparation work was carried out ready for a wider campaign in 2022.
Competition Law 2021 Objective: Working with Government to make recommendations for amendments to Amendments competition legislation for the benefit of the Island.
2021 Delivery: Officers and Members of the Authority continued to work with Government
on the proposed changes to the competition law framework in Jersey. This will be further developed during 2022.
MARKET STUDIES
A market study is a flexible tool to explore whether a market or features of a market are working well for Jersey consumers. It considers the relationship between consumer behaviour in a market, the behaviour of firms in that market, and the market's structure. By looking at these relationships, the Authority can determine whether action that will encourage changes to consumer behaviour, business behaviour, or both, will help address any market problems found.
The outcomes of a market study may be one or more of the following:
• A clean bill of health for the market
• Consumer/business focused action
• Non-binding recommendations to Government
• Investigation and enforcement action
A market study can be initiated at the request of the Minister for Economic Development, under the Competition Regulatory Authority (Jersey) Law 2001, or self-initiated by the Authority.
Market studies are an important tool for the Authority to evaluate issues in particular markets that are not working well for our stakeholders and promote a competitive environment as well as raise awareness of competition policy and its benefits among businesses, consumers and public institutions. Preparation work has been undertaken while considering the Government of Jersey's strategic plan and inflation strategy. Three market studies were shortlisted and commenced in 2021. The Authority will prioritise further market studies in line with its broader policy framework, not only for 2022 but into the future.
Work Area Further Detail
Market Study 2021 Objective: Deeper links with wider consumer bodies will be developed alongside a Programme pipeline of potential future market studies.
2021 Delivery: The Authority is a member of the Consumer Protection Network, which
brings together various Jersey regulatory and consumer bodies.
In 2021 the Authority developed a long list of potential candidate markets which were screened to determine those most relevant to Jersey. The subsequent short list was then assessed against a structured range of criteria to rank in order of desirability. This led to the selection of freight logistics as the first market study to be launched in July 2021. The study is due to complete in June 2022.
Market Study 2021 Objective: Draft guidelines that describe our general processes and approach to Guidelines market studies will be issued for consultation. These will then be finalised,
incorporating any stakeholder feedback.
2021 Delivery: Rather than issue formal guidelines, instead a "Quick Guide" is being
developed, this will utilise lessons learned from the market studies currently underway. These will be completed and released in 2022.
Market Study 2021 Objective: Terms of reference will be finalised and an appropriate market study Delivery undertaken during the course of 2021.
2021 Delivery: Alongside the freight logistics market study, in September 2021 the Authority
launched a market study into Alcohol Pricing and Promotions. In November 2021 the Authority launched a market study into Telecoms Retail Pricing. All three market studies are due to complete in 2022, though there is likely to be follow up work flowing from the studies.
REGULATION OF AIR AND SEA PORTS
The Authority is responsible for regulating Jersey's air and sea port operations through the Air and Sea Ports (Incorporation) (Jersey) Law 2015, and aims to protect and further the interests of users of port operations, where appropriate by promoting competition.
Ports of Jersey Limited (PoJL) plays a vital role for the economy of Jersey, and faced significant challenges during 2021. The Authority intends to work closely with PoJL to develop a strong and constructive relationship and understand the impact of the coronavirus pandemic on its business, focusing attention on supporting Jersey consumers, connectivity and the economy.
Work Area Further Detail
Government Policy 2021 Objective: Support development of the MOU with Government and a Government
policy for port operations.
2021 Delivery: A draft Ports policy has been shared with Officers, who will continue to work
closely with Government officials on finalising any future policy.
Impact of Pandemic 2021 Objective: Support PoJL in dealing with the impact of the pandemic on the air and sea
port operations.
2021 Delivery: Members of the Authority met with the Board of PoJL during 2021 to
understand the impact of the pandemic, which resulted in a better understanding of the challenges it faced and agreed that Quality of Service metrics would continue to be relaxed in the short term and it was agreed that a review of the regulation of port operations would commence in 2022..
Price Control 2021 Objective: If necessary, review the price control in light of the impact of the coronavirus pandemic on the regulated business and long-term investment programme.
2021 Delivery: No changes were made to the price control during 2021. Price changes made by PoJL were reviewed on notification.
Quality of Service 2021 Objective: PoJL reports Quality of Service metrics to the Authority on a quarterly basis.
These will be reviewed in 2022 to ensure they are still appropriate and fit for purpose.
2021 Delivery: Reporting was re-established during 2021 following a break due to the
Pandemic.
Customer Support 2021 Objective: Support consumers of air and sea port services where necessary and
appropriate – for example, airlines and shipping and freight companies in accessing port services.
2021 Delivery: There were no active cases during 2021.
Investigations 2021 Objective: Investigate potential breaches of the law and licence conditions by licensed
operators.
2021 Delivery: There were no active investigations during 2021.
REGULATION OF POSTAL SERVICES
The Authority is responsible for regulating Jersey's postal services by way of the Postal Services (Jersey) Law 2004, and aims to protect and further the interests of users of postal services, where appropriate by promoting competition.
Postal services play a vital role for the economy of Jersey. Jersey Post faced significant challenges during 2021. The Authority intends to work closely with Jersey Post and other operators to understand the impact of the coronavirus pandemic on the business, focusing attention on Jersey consumers and the economy.
Work Area Further Detail
Impact of Pandemic 2021 Objective: Support postal operators in dealing with the impact of the pandemic on postal
operations.
2021 Delivery: Members of the Authority met with the board of Jersey Post during 2021
to understand the impact of the pandemic, which resulted in a better understanding of the challenges it faced and agreed that Quality of Service metrics would continue to be relaxed in the short term and it was agreed that a Post review would commence during 2022.
Licence modifications have been implemented for Jersey Post and High Speed Freight Services and the licence for Regency Holdings has ceased.
Price Control 2021 Objective: If necessary, review the price control in light of the impact of the coronavirus
pandemic on the regulated business of Jersey Post.
2021 Delivery: Jersey Post made changes to its postal charges which it notified to the Authority and its customers ahead of implementation.
Quality of Service 2021 Objective: Quality of Service targets will be reviewed in 2021 to ensure that Jersey Post Metrics continues to provide the best value and service possible to Jersey.
2021 Delivery: Due to the pandemic, quality of service of reporting has been paused. This will
be restarted in 2022 and more broadly the reporting framework considered further under the Postal review
Customer Support 2021 Objective: Support consumers of postal services where necessary and appropriate – for example, Jersey public and businesses complaints in regard to postal services.
2021 Delivery: There were no active cases in 2021.
Investigations 2021 Objective: Investigate potential breaches of the law and licence conditions by licensed
operators.
2021 Delivery: There were no active cases in 2021.
REGULATION OF TELECOMMUNICATION SERVICES
The Authority regulates Jersey's telecoms market in line with legislation and the Government Telecoms Strategic Action Plan. Its aim is to encourage sustainable competition, which will deliver innovation, value for money and service development for the benefit of consumers.
Telecoms technology and solutions continually change and play a vital role in the economy of Jersey but local operators have faced significant challenges during 2021. The Authority intends to work closely with operators to understand the impact of the coronavirus pandemic on the industry. Other areas of attention include the impact of telecoms on Jersey consumers and the economy, and ensuring there are secure and resilient services.
Work Area Further Detail
Government Policy 2021 Objective: Support development of an MOU between JT and the Government, as and MOU shareholder, and the implementation of Government telecoms policy.
Support the development of the telecoms security framework.
2021 Delivery: We remain in constant contact with Digital Policy Unit and as a member of
the Telecoms Steering Group.
We are liaising with the Digital Policy Unit via the Telecoms Security Working Group and await sight of the draft instructions to the Legislative Drafting Office so that we can input on proposed changes to the 2002 Telecoms Law to reflect our new role.
Additional funding of £150,000 was paid by Government to support additional costs in 2022 in developing the new telecoms security regime, including management of high risk vendors and telecoms security requirements.
Licensing 2021 Objective: Continue to evolve, monitor and review licence conditions and guidelines as
required and appropriate.
2021 Delivery: JT and Sure licences were modified in 2021 as a result of a competition
investigation and it is the Authority's intention to make further amendments to all operators licences to ensure they clearly understand their regulatory responsibilities. A review of licensing is part of the 2022 Work Programme.
Market / Price 2021 Objective: During 2021, market and price reviews are being carried out for the Business Reviews Connectivity Market and Wholesale Broadband Access Services, and others
as required.
2021 Delivery: The wholesale broadband access services price review successfully concluded
in September 2021. This was a major project and the outcome was that
the wholesale price of broadband in Jersey will start to come down over a five-year period, encouraging more competition in the marketplace and therefore benefitting consumers.
Stage 1 of the business connectivity market review, which set out the relevant market definitions and significant market power assessments, was completed in July 2021. Structured engagement on Stage 2 of the review, remedies, took place in November 2021. The review is expected to conclude in 2022.
REGULATION OF TELECOMMUNICATION SERVICES
Work Area Further Detail
Telecoms Statistics 2021 Objective: Refresh the approach to the annual statistics report to ensure it is fit for
purpose and identifies key dependencies and market data.
2021 Delivery: This is a joint project with the Guernsey Competition and Regulatory
Authority and Statistics Jersey. The approach and presentation of the report was refreshed and the report was published in July 2021.
Customer Support 2021 Objective: Provide support to Jersey consumers where appropriate, for example dealing
with customer complaints where necessary.
2021 Delivery: Fixed Line CLI: Consultation commenced with key stakeholders on Call Line
Information, which will help prevent harm to consumers and will conclude during 2022.
Directory Enquiries: Stakeholders were consulted with during 2021 on the future requirements for these services and this will be concluded in 2022.
Investigations 2021 Objective: Investigate potential breaches of the law and licence conditions by licensed
operators.
2021 Delivery: 2020 Outage & Emergency Calls: New directions were provided to JT and it is anticipated this investigation will be completed in early 2022
2021 Outage: Directions were provided to JT and it is anticipated that this investigation will be concluded in early 2022.
REGULATION OF SPECTRUM AND NUMBERING
The licensing of spectrum in Jersey (referred to as WT Licences), as in the UK, is carried out by Ofcom, by virtue of powers given to it by the Wireless Telegraphy Act 2006 and the Communications Act 2003. Certain parts of this legislation have been extended to Jersey by the Communications (Jersey) Order 2003, and the Wireless Telegraphy (Jersey) Order 2006. WT Licences are granted by Ofcom for Jersey to authorise the use of radio spectrum where it considers it is satisfied the Authority's recommendation is consistent with its own statutory duties. The WT Licence include a condition that refers to there being a local telecoms licence in place issued by the Authority relevant to the spectrum granted.
The Authority maintains a close working relationship with Ofcom, and will ascertain the level and nature of demand for spectrum which is on offer. When the assessment and selection process is completed, a recommendation is provided to Ofcom for approval.
Work Area Further Detail
Spectrum allocation 2021 Objective: Make recommendations to Ofcom for spectrum licensing to Ofcom as
required.
2021 Delivery: During 2021, the Authority approved a detailed project plan to re-start the
5G project which has now commenced.
Numbering 2021 Objective: Ofcom is responsible for the allocation of numbers for Jersey. Operators will
therefore apply directly to Ofcom for range allocation. Allocation will be dependent on a local telecoms licence in place. Ofcom will inform the Authority on receipt of such applications and of the outcome of its consideration of such applications. The Authority includes conditions in the licences of local operators concerning the management of numbering.
2021 Delivery: The CLI consultation will support this work area.
Compliance 2021 Objective: Ensure that local licensed operators adhere to Ofcom requirements in relation to spectrum licensing and numbering.
2021 Delivery: Mast Audit: The annual mast audit was undertaken in Q4 and a report was
published on the Authority's website, once again all operators are working within ICNIRP guidelines.
It is the Authority's intention to continue with mast audits on an annual basis.
ORGANISATIONAL DEVELOPMENT
2021 represents the first full year of the Authority as an indepedent organisation. The Authority has a small and experienced team with a wide range of skills to deliver the business plan, and will continue to develop its capabilities to maximise its impact.
To continue to ensure competition works well for consumers and businesses in Jersey in the short and long term. To meet this, the organisation must be fit for purpose against current needs while also developing capability to meet future requirements.
Work Area Further Detail
Resources The Authority will continue to build an agile local efficient team with a wide range of skills to
support this plan and its long term aims.
In addition, the Authority has been developing a panel of external expert consultants to provide specialist support when required.
Training The Authority continues to support the team, encouraging self-development, CPD and providing
specific training as required. Internal training is provided for new starters.
IT and Systems The Authority will ensure secure and reliable services which enable the team to work effectively
in the office or from home as required. An assessment of future requirements was undertaken during 2021 with implementation planned for 2022.
Engagement and The Authority continues to build trust and respect by developing key relationships across all Communication sectors of Island life to ensure it remains aware of what support it can provide. It will continue
to develop clear communications using the website, social and local media.
Staff Wellbeing The team is made up of dedicated individuals who have a large portfolio and do work under
pressure. The Authority works to ensure its staff and their families are well supported.
Corporate The Authority aims to lead by example and ensure work is delivered in line with best practice. Governance A programme of internal audit was established in 2021, with the first audit carried out
during Q4.
Risk Management The Authority has developed a robust mitigation plan for all key risks, under the guidance of the Audit and Risk Committee. Risks are actively reviewed on a regular basis.
Priorities for 2022
THE FOCUS IN 2022 ALIGNS WITH THE FOUR STRATEGIC GOALS:
- Protect and encourage competition
- Deliver effective supervision
of regulated sectors
- Safeguard consumers
- Establish the Authority as a respected organisation
The 2022 Business Plan can be found at: www.jcra.je/strategic-plans/business-plan/ 2022-business-plan/
The aftershocks of the pandemic may include associated supply chain disruption, increasing inflationary pressures and changes to business models to reflect the post pandemic experience. These sit alongside the uncertainties over the full impact of the UK's exit from the EU, on both the UK and the Crown Dependencies.
These pressures will be reflected in our work on regulation, with an increased focus from us on ensuring our approach provides the right balance of outcomes, both now and for the future. In particular, this will be reflected through an increased focus on Ports and Post with multiyear reviews. Our reviews are intended to ensure our approach delivers effective supervision of these critical services for Jersey.
These reviews will sit alongside our ongoing focus on Telecommunications and ensuring Jersey's spectrum and numbering are effectively utilised and the foundations laid for next generation services.
Wider technological drivers continue to disrupt existing business models across all sectors, with the power to both positively and negatively influence our economy and society. Among those areas holding our attention – to a greater or lesser extent – will be ecommerce and online retailing, next generation
31 Annual Report & Accounts 2021
telecoms, satellite broadband, fraud and security and online content concerns. We plan to remain abreast of these developments, acting in some cases, assessing in others.
Alongside this, we will continue to focus on protecting and encouraging competition. We plan to engage in wider advocacy work in 2022 to explain and highlight the importance of Competition Law. We will continue to use our market study programme to provide important and comprehensive understanding of local markets and insight on how well they are working for Jersey consumers. We will also work with Government to make recommendations for amendments to competition legislation for the benefit of the Island.
The drive towards an environmentally sustainable Island will increasingly exert influence on both our organisation and those we regulate or engage with. This will be reflected in our internal thinking during 2022 and help shape possible approaches to assessing involvement in external activities.
www.jcra.je
Sustainability
Committed to sustainability principles, the Authority has been working with local industry experts on both policy and plans to ensure carbon neutral working practices.
The approach includes:
– Fully understanding the Authority's own present and future carbon footprint;
– Identifying and taking actions to reduce our direct emissions; and
– Evaluating and encouraging any steps that will help reduce our indirect emissions.
In addition, the Authority is working to increase awareness of the application of local and global environmental policies within our regulated sectors.
This work will continue to develop during 2022.
There is little doubt sustainability is no longer an option but now a widespread and increasingly binding expectation. As a responsible organisation with a global outlook which values strongly connected to the community it serves, the Authority takes the matter of sustainability seriously, both for itself and those organisations it regulates.
Sustainable approaches have featured increasingly prominently within our internal plans, policies and procedures. As opportunities arise to review and change existing practices or adopt as standard within new ones. This is a progressive process, seeking prudent early wins and making short-term cost-neutral changes, while assessing and preparing for more fundamental longer-term work practice transformations.
The sustainable activities of those we regulate have become more visible as organisations announce bold policies and move forward with exciting plans. While our formal remit does not encompass the setting or monitoring of environmental standards, we are increasingly mindful that islanders expect local organisations to act responsibly, not just when it comes to regulated services but in their overall approach to business.
Steps we have taken
In 2021, the Authority engaged a local environmental consultant as a first step in turning recognition for more environmentally-focused internal organisational practices into the reality of established sustainable systems, processes and procedures. With expert support, we have been able to increase our understanding of the reasons for change and increase awareness of steps towards achieving a best practice approach, across Scope 1, Scope 2 and Scope 3 emissions.
Accountability Report
Corporate Governance Report
Statement from the Chair
I was appointed as Chair of the Authority on 1 July 2020.
All Members of the Authority have made declarations of interest. No Member declared significant company directorships or other interests that may have conflicted with their responsibilities. No Member of the Authority had any other related-party interests.
Sarah Price has been appointed as Company Secretary by the Board to oversee the maintenance of a high standard of corporate governance and transparency for the Authority.
To enable the Authority and its committees to discharge their duties, appropriate and timely briefing papers are distributed in advance of meetings. All Members have access to the Company Secretary who is responsible for ensuring procedures, rules and regulations are followed.
Rory Graham, a solicitor admitted in England and Wales, was appointed General Counsel on 2 January 2021, with ultimate responsibility for legal and regulatory compliance.
Significant Interests
Whilst no distinction is made in the 2001 Law between Non-Executive and Executive Members of the Authority, the majority of Members are not also officers, employees or agents appointed under Article 8. They are independent of management and free of any other relationship that could materially interfere with the exercise of their judgement.
Data Protection
Sarah Price is the Data Protection Officer for the Authority.
There were no personal data related incidents during the year reported to the Jersey Office of the Information Commissioner.
Accountability – Public Finance Manual
The Authority has been designated as a Grant Receiving Body under the terms of the States of Jersey Public Finance Manual. The Authority is fully cognisant of its responsibilities as the recipient of public funds, and a new Funding Agreement was signed between the Government of Jersey and the Authority. This can be found here:
www.jcra.je/strategic-plans/governance-framework/
In addition to the requirements of the 2021 Law and the requirements placed on recipients of grant funding, the Authority is committed to maintaining a high standard of corporate governance.
Members of the Authority
The Law requires the Authority to comprise, as a minimum, three Members, with one Chair. As at 31 December 2021, the Authority consisted of a Chair, three non-executive Members and one executive Member. At all times, the Authority remained quorate.
Appointments to the Authority
The Law provides that the Chair is appointed by the Minister, as are other Members following consultation with the Chair. Vacancies which arise are filled through an open and transparent process, consistent with the procedures recommended by the Jersey Appointments Commission.
In September 2021, Tim Ringsdore was appointed as a Member of the Authority, following his appointment to the permanent role as Chief Executive in February.
Governance Report
Governance Report
The Authority believes that Members have, between them, a wide range of experience which ensures effective leadership and control of the Authority.
The role of Non-Executive Member of the Authority includes the following responsibilities:
- Ensuring that the Authority's business is conducted in an impartial, open and efficient manner and in accordance with international best practice.
- Providing advice and guidance in decision-making and on the strategic direction of the Authority.
- Maintaining a close working relationship with
the Executive, providing support and guidance as required.
- Together with other Board Members, building
and maintaining a positive reputation for the
Authority so that it commands the trust and respect
of all of its stakeholders - the citizens, consumers,
businesses, the States of Jersey, and in doing so enhances Jersey's reputation nationally and in the
international community.
- Ensuring that the Board maintains an appropriate level of scrutiny of the operations and governance of the Authority, maintaining the Authority's
independence.
Meetings
The Board of the Authority meets regularly. Customarily, there are eight meetings each year with additional meetings when circumstances require it. During 2021, the Authority met on nine occasions.
Meetings were held either in person or via video conference call due to the Pandemic. Papers and supporting documentation are distributed to Members a week in advance of each meeting.
Each board meeting is effectively managed by the Chair who finalises the agenda for each meeting in conjunction with the CEO and Company Secretary.
The agenda will include items that require decisions by the Authority, these are made after receiving comprehensive papers and information from officers that ensure there is sufficient detailed information regarding the subject matter, including advice from the General Counsel on any legal aspects. These issues are discussed by the Board of the Authority who then make effective decisions.
On occasions the Authority will engage with subject matter experts to provide further information prior to making final binding decisions.
The board meetings address governance matters ensuring the Board is satisfied that the Authority is being managed effectively and efficiently on a day-to-day basis.
Corporate Governance Report
MEMBERS OF THE AUTHORITY AS AT 1 JANUARY 2021
Start End
Liston, Stephanie Chair 01/07/2020 25/05/2024 Masterton, Paul Senior Independent 13/02/2017 12/02/2022 Ringsdore, Tim Chief Executive 19/11/2020 30/06/2021 Stoimenova, Lara 07/10/2020 06/10/2023 Walden, Ian 07/10/2020 06/10/2024
MEMBERS OF THE AUTHORITY AS AT 31 DECEMBER 2021
Start End
Liston, Stephanie Chair 01/07/2020 25/05/2024 Masterton, Paul* Senior Independent 13/02/2017 12/02/2022 Ringsdore, Tim** Chief Executive 14/09/2021 01/02/2026 Stoimenova, Lara 07/10/2020 06/10/2023 Walden, Ian 07/10/2020 06/10/2024
* In January 2022, Paul Masterton was been reappointed for a further 3 years to 12/02/2025 ** Tim Ringsdore was appointed as a Member of the Authority on 14 September 2021
Attendance
The table below details board and committee meetings and attendance (where eligible) for 2021:
Member Position Board Audit
Meeting** and Risk RCommittemunereeation
Committee
Stephanie Liston Paul Masterton Hannah Nixon Tim Ringsdore Lara Stoimenova Ian Walden
Chair 9/9 Senior Independent 9/9 Member 1/1 Chief Executive 7/7 Member 9/9 Member 8/9
n/a 3/3 3/3 3/3 n/a n/a 3/3* 2/2* 3/3 n/a n/a 2/3
*In attendance only
Board Effectiveness Review
At the end of 2021, the Authority carried out a Board Effectiveness Review, considering the performance of the Board, the two Committees and the Chair. For 2021, this was an internal process run by the Company Secretary. This will become an annual exercise, with a decision to be taken later in 2022 whether to run an external review for the year.
The exercise has provided valuable information on the performance and operation of the Authority, and identified areas of improvement, which include; horizon scanning, sustainability, increased focus on consumers, continue to develop the Board culture and encouraging peer level participation at Board meetings.
These will be incorporated into the annual work programmes year on year. It is the intention of the Authority to continue with board effectiveness reviews on a regular basis to ensure we achieve best in class status.
Risk Management
COMMITTEES
Audit and Risk Committee
The 2001 Law provides that the Authority may establish committees whose members may, but need not be, members, officers, employees or agents of the Authority.
The Authority has established an Audit and Risk Committee, with Lara Stoimenova as Chair and Paul Masterton as a Member. The Chief Executive attends Committee meetings in an advisory capacity, and the Committee is supported by the Company Secretary. The key roles and responsibilities of the Committee relate to issues of internal control, financial reporting, compliance with laws and regulation, working with the external and internal auditors.
The Committee oversees the financial reporting process to ensure the balance, transparency and integrity of financial information.
The Committee also reviews:
• The effectiveness of internal controls;
• Compliance with laws and regulation;
• Working with internal and external auditors;
• The risk management process;
• The effectiveness of the outsourced internal audit function;
• The external audit process including recommending the
appointment and assessing the performance of the external auditor;
• The process for monitoring compliance with laws and regulations;
• The application of corporate governance best practice; and
• The adequacy of responses to internal audit reports.
The Committee met three times in 2021. The first meeting in April was to consider the 2020 annual report and accounts, and independent auditor's report. The Committee met in June when it reviewed the risk register and internal audit proposals for the year. The Committee met in November to consider the risk register and internal audit report.
Remuneration Committee
The Authority established a Remuneration Committee in 2021. The duties of the Committee are to make recommendations to the Minister for non-executive remuneration, and to the Authority on remuneration for the executive and senior management. The Committee is tasked with the design of remuneration policies and practices to support strategy and promote long-term sustainable success, with executive remuneration aligned to the Authority's purpose and values, clearly linked to the successful delivery of the company's long-term strategy, and that enable the use of discretion to override formulaic outcomes and to recover and/or withhold sums under appropriate specified circumstances.
When determining executive remuneration policy and practices, take into consideration clarity, simplicity, risk mitigation, predictability, proportionality and alignment to culture.
The Committee is chaired by Paul Masterton, as Senior Non Executive Member, with Ian Walden and Stephanie Liston as Members.
Risk Management
The Audit and Risk Committee is appointed by the Authority under Article 7 of the 2001 Law to assist the Authority in discharging its oversight responsibilities.
The Authority operates a risk register that captures those risks with the potential to have a significant adverse impact on the operations of the Authority. The Authority reviewed the register in September, and came to a consensus view on the key risks to the Authority successfully fulfilling its statutory duties and objectives. It agreed a list of mitigations and agreed how risk will be monitored and reviewed in future.
The risk register is organised around themes as summarised below:
Theme
Relationship with Government
Stakeholder Management
Risk and mitigation
To ensure a balance of transparency and independence, the Authority has focussed on regular engagement with Government at a senior level, along with a clear 2021 and 2022 business plan and the development of updated prioritisation principles. Finalisation of the Memorandum of Understanding and Funding Agreement with Government has supported this process. Two formal meetings were held with the Minister in 2021.
To ensure an appropriate relationship with regulated entities, the Authority holds regular meetings, including Board to Board engagement. The Authority is also focussed on building relationships with other regulators, through the Consumer Protection Network, Jersey Regulators' Forum and International Institute of Communication.
The Authority has worked on developing and maintaining its reputation which could impact on its ability to meet its duties and objectives. This has been delivered through the provision of regular updates to key stakeholder groups, and the development of a clear business plan for 2021. Media relationships have been improved, and there has been regular engagement with other regulatory bodies, both on and off Island.
Delivery There is a risk associated with dealing with the planned work programme and unplanned
issues and cases which arise. The challenge is ensuring that sufficient resource and expertise is available to meet the Authorities duties and objectives.
A new team has been built, developing close working relationships with external expert consultants where appropriate.
Internal Audit
The internal audit function was established in 2021, with the first internal audit report being produced in Q4 which assessed and evaluated the effectiveness of financial controls. The frequency of the internal audit cycle is semi- annual with an agreed timetable for 2022 and 2023 in place.
Remuneration and Staff Report
Remuneration and Staff Report
The Authority believes that, within the constraints of being a public body, it should provide rewards that will attract and retain the high calibre management necessary to fulfil its statutory remit and responsibilities.
Components of Executive Remuneration
The main components of Executive Members' remuneration are salary and other benefits. The basic salary for the Executive Members is determined by taking into account each individual's responsibilities, performance and experience, together with market trends. Basic salaries are reviewed annually by the Remuneration Committee.
Remuneration and Schedule
Details of the remuneration of the Board are set out in the following tables. The tables reflect the remuneration for that part of the year during which individuals were members of the Board.
Remuneration of Members
Article 5 of the 2001 Law provides that the Minister shall determine the remuneration of Members of the Authority, as well as reasonable out-of-pocket or other expenses occasioned in the reasonable course of carrying out their duties.
In addition to salary, the Executive Members receive certain benefits; specifically private medical insurance, life insurance, and critical illness insurance. These benefits are not disclosed in the remuneration table below as
they are not taxable as benefits in kind.
Executive Members may be both Members of the Authority and employees of the Authority. The Chief Executive receives no fees as a Member of the Authority.
Chief Executive 2021 (£) 2020 (£) Officer
Non-Executive Member
Stephanie Liston Paul Masterton John Curran Hannah Nixon Lara Stoimenova Ian Walden
2021 (£) 2020 (£)
56,500 39,000 20,000 23,858
Nil 6,667+ 3,600 13,333+ 18,000 4,241+ 18,000 4,241+
Michael Byrne Nil 41,700+ Tim Ringsdore 132,218+ 75,000+
Total 132,218+ 116,700
Total 116,100 91,340 +part year only
Remuneration and Staff Report
Staff Report
Article 8 of the 2001 Law provides that the Authority may appoint such officers, employees and agents as it considers necessary for the performance of its functions. Staff costs are split on an apportion basis of competition (40%), telecoms (50%), ports (8%) and post (2%).
At the end of 2021, the permanent team members were:
• Chief Executive
• Company Secretary / Senior Case Officer
• Finance / Case Officer
• General Counsel
• Office Manager
• Senior Economic Case Officer
A further two case officers were employed on a part time
/ contractor basis and as a secondment from Government. The total staff costs for 2021 were £754,338 (2020: £499,299). There were no payments in compensation for loss of office made in the year.
Staff numbers are not large enough to publish a more detailed staff report for the year.
Contracts
The Authority is a small team and outsources the provision of specialist advice to external contractors where this is more cost effective than a dedicated in-house resource for that particular area. In 2021, the cost was £423,158 (2020: £379,627).
Contracts are awarded following a tender process where appropriate, with significant expenditure approved by the Authority. All contractors are actively managed by officers.
Accountability Report
The Accountability Statement
Pandemic
As in 2020, the continuation of the Coronavirus Pandemic during the year has had a significant impact on working arrangements at the Authority and upon the activities of the regulated entities for which the Authority has oversight. Nevertheless, the activities of these entities are essential to the population of the Island and, whilst there may be a temporary fall in the value of services provided, it is anticipated that demand for these services will recover and revenues (which are basis for licence fees) will be restored to pre-Covid levels. Given this and that the grant is from Government, the Members are satisfied that the continued use of the going concern basis is appropriate.
Members Report for the Financial Statements
The Members in office during the year are shown on page 36.
Events during the year and subsequent to the year end
There have been no events between the statement of financial position date and the date when the financial statements were authorised for issue that need to be disclosed or recognised in the financial statements.
41 Annual Report & Accounts 2021
Independent auditor
RSM Channel Islands (Audit) Limited are appointed to act as auditor in accordance with Article 17 of the Competition Regulatory Authority (Jersey) Law 2001.
Members' Disclosure
As far as the Members are aware, there is no relevant audit information of which the auditor has not been made aware. All reasonable steps have been taken by the Members in order to make themselves aware of any relevant audit information to establish that the auditor is aware of this information.
Members' Responsibilities
The Members are responsible for preparing the Members' Report and the financial statements in accordance with applicable law and regulations.
The Competition Regulatory Authority (Jersey) Law 2001 requires Members to keep proper accounts and proper records in relation to those accounts. The Members therefore consider themselves responsible for keeping adequate accounting records that are sufficient to show and explain the Authority's transactions and disclose with
www.jcra.je
The Accountability Statement
reasonable accuracy, at any time, the financial position In preparing the financial statements the Members are of the Authority and which enable them to ensure that required to:
these financial statements comply with the Law. They also - select suitable accounting policies and then apply them consider that they are responsible for safeguarding the consistently;
assets of the Authority and hence for taking reasonable
steps for the prevention and detection of fraud and other - make judgements and estimates that are reasonable irregularities. and prudent;
The Law also requires Members to prepare accounts in - state whether applicable UK Accounting Standards respect of each financial year, and once audited by auditors have been followed, subject to any material departures appointed by the Auditor and Comptroller General, disclosed and explained in the financial statements;
to submit to the Minister's Department the accounts and
together with the auditor's report. The Minister, in turn, - prepare the financial statements on the going concern must submit the accounts and auditor's report thereon to basis unless it is inappropriate to presume that the the States of Jersey. Authority will continue in operation.
The Members have elected to prepare the financial
statements in accordance with United Kingdom Accounting The comply with these rMembers confirm equirthaement these ts. financial statements Standards and applicable law.
Financial Statements
Jersey Competition Regulatory Authority
Independent Auditors' Report
to the Members of Jersey Competition Regulatory Authority
Opinion
We have audited the financial statements of Jersey Competition Regulatory Authority (the "Authority"), which comprise the statement of financial position as at 31 December 2021, and the statement of comprehensive income for the year then ended, and notes 1 to 11 to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards.
ln our opinion the financial statements:
• give a true and fair view of the state of affairs of the Authority as at 31 December 2021 and of its results for the year then ended;
• have been properly prepared in accordance with United Kingdom Accounting Standards; and
• have been prepared in accordance with the Competition Regulation (Jersey) Law, 2001.
Basis for opinion
We conducted our audit in accordance with lnternational Standards on Auditing (UK) (lSAs (UK)') and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of this report. We are independent of the Authority in accordance with the ethical requirements that are relevant to our audit of the financial statements in Jersey, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
ln auditing the financial statements, we have concluded that the Member's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Authority's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the Members with respect to going concern are described in the relevant sections of this report.
Other information
The Members are responsible for the other information, which comprises the lntroduction, The Role of the Authority, Performance Report and Accountability Report. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusions thereon.
ln connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. lf we identify such material inconsistencies or apparent material misstatements of this other information, we are required to report that fact.
We have nothing to report in this regard. Responsibilities of Members
As explained more fully in the Members' Responsibilities Statement set out on page 45, the Members are responsible for the preparation of the financial statements in accordance with United Kingdom Accounting Standards and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Responsibilities of Members (continued)
ln preparing the financial statements, the Members are responsible for assessing the Authority's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Authority or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with lSAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with lSAs (UK), we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
• ldentify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than the one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Authority's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Members.
• Conclude on the appropriateness of the Members' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Authority's ability to continue as a going concern. lf we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
lrregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is explained below.
We identify and assess the risks of material misstatement of the financial statements as a whole, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is in our professional judgement sufficient and appropriate to provide a basis for our opinion.
We consider the Authority's susceptibility to fraud and other irregularities, taking account of the business and control environment established and maintained by the Members, and the nature of transactions, assets and liabilities recorded
Auditor's responsibilities for the audit of the financial statements (continued)
in the accounting records. We enquire whether management have any knowledge of any actual or suspected fraud. The engagement team discuss potential indicators of fraud and how and where fraud might occur in the financial statements.
Owing to the inherent limitations of an audit there is an unavoidable risk that some material misstatement of the financial statements may not be detected, even though the audit is properly planned and performed in accordance with ISAs (UK). However, the principal responsibility for ensuring that the financial statements are free from material misstatement, whether caused by fraud or error, rests with the Members who should not rely on the audit to discarge those functions.
Use of our report
This report is made solely to the authority's Members as a body, in accordance with Article 17 of the Competition Regulatory Authority (Jersey) Law, 2001. Our audit work has been undertaken so that we might state to the Authority's Members those matters we are required to state them in auditor's report and for no other purpose. To the fullest extent permitted by Law, we do not accept or assume responsibility to anyone other than the Autority and the Authority's Members as a body, for our audit work, for this report, or for the opinions we have formed.
RSM Channel Islands (Audit) Limited Chartered Accountants Jersey, C.I. 14 April 2022
Statement of Comprehensive Income for the Year Ended 31 December 2021
Income Notes 2021 (£) 2020 (£) Competition law funding 691,000 350,000
Mergers and acquisitions fees 45,000 50,000 Ports of Jersey licence fees 180,000 90,000 Postal licence fees 20,000 22,000 Telecommunications licence fees 688,954 665,781 1,624,954 1,177,781
Expenditure Notes 2021 (£) 2020 (£) Salaries and staff costs 754,338 499,299
Consultancy fees 423,158 379,627 Operating lease rentals 49,225 45,262 Computer maintenance and software 48,582 57,430
Insurance
Advertising and publicity Audit and accountancy fees Travel and entertainment Legal and professional fees
Administration expenses
General expenses
Depreciation 4 Recruitment
Surplus for the Financial Year 8
47,843 25,504 35,284 12,826 26,174 16,156 23,042 6,836 20,925 37,613 16,352 7,570
13,008 16,683 9,508 9,826 7,006 34,104
1,474,445 1,148,736
150,509 29,045
Statement of Total Comprehensive Income
There are no differences between the surpluses for the financial years stated on the above and total comprehensive income.
The notes on pages 49 to 56 form an integral part of these financial statements.
Statement of Financial Position as at 31 December 2021
Notes 2021 2020 Fixed Assets £ £
Fixed assets 4 27,005 23,174 Current Assets
Debtors and prepayments 5 224,161 115,522 Cash and cash equivalents 1,144,500 763,304 1,368,661 878,826
Current Liabilities
Creditors: amounts falling due within one year 6 Deferred income 7
Net Current Assets
Total assets less current liabilities
Retained Surplus 8
178,874 125,717 290,000 - 468,874 125,717 899,787 753,109 926,792 776,283 926,792 776,283
The financial statements on pages 47 to 60 were approved on XX April 2022 and authorised for issue by the Members and signed on their behalf by:
Stephanie Liston Tim Ringsdore Chair CEO
14 April 2022 14 April 2022
The notes on pages 53 to 60 form an integral part of these financial statements.
for the Year Ended 31 December 2021
- Authority information
The Jersey Competition Regulatory Authority (the Authority) is established by way of the Competition Regulatory Authority (Jersey) Law 2001, with further functions and legal duties relating to competition law and economic regulation set out in legislation passed by the States of Jersey, to which the Authority is ultimately accountable.
The principal place of business is 2nd Floor Salisbury House, 1 - 9 Union Street, St Helier, Jersey, JE2 3RF.
- Accounting policies
These financial statements have been prepared in accordance with FRS 102, the Financial Reporting Standard applicable in the UK and Republic of Ireland.
The presentation currency of these financial statements is sterling with all amounts rounded to the nearest whole pound.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Members to exercise judgement in applying the accounting policies.
The Authority has adopted the provisions of FRS 102.1A as it relates to small entities. The following principal accounting policies have been consistently applied:
- Income
Income is received from government grant and other charges raised in respect of the Authority's responsibilities as the administrator and enforcer of Jersey's competition law and through fees raised through the licensing regime in place for certain sectors. Further details are given below:
- Grants and other charges
Grants received are of a revenue nature and are recognised, in accordance with the Accrual model of
FRS 102 Section 24, in the statement of comprehensive income in the period in which they are receivable which is expected to relate to the costs for which the grant is intended to compensate. There are no performance obligations attached to the grants provided.
The grant for 2021 was £577,000 (2020: £350,000). In 2021 additional cash funding of £114,000 was provided by the government to support two additional market studies which were not specifically provided for in the 2021 Business Plan.
Any unused funds at the financial year end are either held by the Authority for application against future cases or repaid to the Minister's Department.
Mergers and acquisitions fees' comprises fees received for the assessment of certain notifiable mergers and acquisitions in the year. They are recognised in the statement of comprehensive income once the proposed transaction has been formally registered with the Authority. Fees recognised in 2021 were £45,000 (2020: £50,000) with expenditure of £26,676 (2020: £12,584) reflected in the statement of comprehensive income.
- Licence fees
Licence fees across all regulated sectors are set in accordance with sector-specific legislation and are recognised in the period to which they relate. Licence fees are charged either by applying a percentage to the licensed revenue of each licensed operator (in the case of telecoms) or through charging an annual fee (in the cases of post and ports). Licence fee percentages / charges are set out overleaf:
for the Year Ended 31 December 2021
- Accounting policies (continued)
2021 2020
Licence fee % / charge Licence fee % / charge
Ports £180,000 £90,000
Post Class II £20,000 Class II £20,000
Class I £1,000 Class I £1,000
Telecoms 0.75% relevant turnover 0.75% relevant turnover
/£500 de minimus /£500 de minimus
- Expenditure
Expenditure is accounted for on an accruals basis and is measured at its transaction price.
- Fixed assets
Fixed assets are stated at cost less depreciation. Depreciation is provided on all fixed assets at rates calculated to write down their cost on a straight line basis to their estimated residual values over their expected useful economic lives. The depreciation rates used are as follows:
Other equipment Fixtures and fittings Computer equipment Website costs
Leasehold improvements
20% per annum
10% per annum
33% per annum
33% per annum
shorter of remaining length of lease or expected useful life
Assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within other operating income' in the statement of comprehensive income.
- Leasing commitments
All leases entered into by the Authority are operating leases. Rentals payable under operating leases are charged in the statement of comprehensive income on a straight line basis over the lease term.
- Pensions
The Authority historically has provided a defined contribution pension scheme to some of its employees, with contributions being charged in the statement of comprehensive income as they become payable
in accordance with the rules of the scheme. This scheme has been closed to new employees for a
significant period of time and there are currently no employees who are members of this or any pension scheme.
for the Year Ended 31 December 2021
- Taxation
Article 16 of the Competition Regulatory Authority (Jersey) Law 2001 provides that the income of the Authority shall not be liable to income tax under the Income Tax (Jersey) Law 1961.
- Going concern
The Authority is established by law to monitor the fairness of competition in the Island of Jersey and its ability to raise the funds necessary to do that, either from Government of by way of licence fees from the regulated sectors, is defined in the same law. Until the Government decides to change that law the going concern status of the Authority is assured.
- Judgements in applying accounting policies and key sources of estimation uncertainty
In the application of the Authority's accounting policies, which are described in note 1, the Members are required to make judgements, estimates and assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are based on historical experience and other factors that are considered to be relevant. The estimates and underlying assumptions are reviewed on an ongoing basis. The critical judgements made by management that have a significant effect on the amounts recognised in the financial statements are described below:
- Determined whether leases entered into by the Authority as a lessee are operating or finance leases. These decisions depend on an assessment of whether the risks and rewards of ownership have been transferred from the lessor to the lessee on a lease by lease basis.
- Determined whether there are indicators of impairment of the Authority's fixed assets. Factors taken into consideration in reaching such a decision include the economic viability and expected future performance of the asset.
Key sources of estimation uncertainty:
- Tangible fixed assets (see note 4) are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In reassessing asset lives, factors such as technological innovation, product life cycles and maintenance programs are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values.
for the Year Ended 31 December 2021
- Fixed Assets
Cost
As at 1 January 2021 Additions
Disposals
As at 31 December 2021
£ £
50,821 43,625 7,064 3,211
- -
57,885 46,836
£ £
17,001 22,413
- 3,064
- -
17,001 25,477
£ £
1,845 135,705
- 13,339
- -
1,845 149,044
Depreciation
As at 1 January 2021 39,178 34,799 17,001 20,521 1,032 112,531 Provided for the year 3,451 5,278 - 608 171 9,508 As at 31 December 2021 42,629 40,077 17,001 21,129 1,203 122,039
Net Book Value
As at 31 December 2021 15,256 6,759 - 4,348 642 27,005 As at 31 December 2020 11,643 8,827 - 1,892 813 23,174
for the Year Ended 31 December 2021
- Debtors and prepayments
2021 2020
£ £
Prepayments 77,350 87,130 Trade and other debtors 146,352 25,890 Amounts due from the Guernsey Competition 459 2,502
and Regulatory Authority
224,161 115,522
- Creditors: amounts falling due within one year
2021 2020
£ £
Accruals 117,481 28,673 Trade and other creditors 61,392 97,044
178,873 125,717
- Deferred income
The deferred income relates to funds received in advance for the Postal Sector Review in 2022-2023 of £140,000, together with the specific funding of £150,000 was received in December 2021 from the States of Jersey for work to be performed in 2022 on Jersey's Telecoms Security Framework.
for the Year Ended 31 December 2021
- Movement on retained surplus
The allocation of retained surplus' or deficits between sectors is shown below.
At 1 January 2020
Surplus /(deficit) for the year
At 31 December 2020
Surplus /(deficit) for the year
At 31 December 2021
125,457 89,985
- 24,797
125,457 114,782
- 37,978
125,457 152,760
55,581 70,736 37,416 57,657 92,997 128,393 18,324 123,424 111,321 251,817
19,526 385,953 747,238 14,810 (105,635) 29,045 34,336 280,318 776,283 (11,076) (18,141) 150,509 23,260 262,177 926,792
The General Reserve reflects historic surplus' not allocated to a specific sector.
for the Year Ended 31 December 2021
- Commitments under operating leases
At 31 December 2021 the Authority had commitments under non-cancellable operating leases as set out below: Buildings Photocopiers
2021 2020 2021 2020
£ £ £ £
Amounts payable under operating leases:
Not later than one year
In more than one year but less than five years
In more than five years Buildings
47,471 25,105 69,229 -
- -
116,700 25,105
3,724 3,724 5,256 8,980
- -
8,980 12,704
The Authority signed a nine year lease, commencing on 21 June 2021, for the office building in Salisbury House, Union Street, St. Helier . The lease has an option to break at the end of year three and year six, and expires in June 2030. Only the amounts up to the first break on 21 June 2024 have been recognised in the table above. Under the full term of this nine year lease, the amount payable not later than one year would be £47,471, the amount payable in more than one year but less than five years would be £196,406 and the amount payable in more than five years would be £176,894.
for the Year Ended 31 December 2021
- Pension commitments
The Authority historically provided a defined contribution pension scheme (the Public Employees Contributory Retirement Scheme) to some of its employees. The assets of the scheme are held separately from those of the Authority in an independently administered fund. There are currently no employees who are members of this closed scheme, consequently contributions of £NIL (2020: £NIL) were paid across in the year.
- Related party disclosures
- The Authority and the Minister
The Authority acts independently of the States of Jersey, but is accountable to the States of Jersey through the Minister of Economic Development, Tourism, Sport and Culture (the Minister) for the funding it receives to administer and enforce Jersey's competition law. The transfer of political and ministerial responsibility for competition policy from the Chief Minister to the Minister was effective from 30 January 2020. The transfer of statutory responsibilities and functions took place on 11 July 2020 when the States of Jersey (Transfer of Responsibilities and Functions) (Completion, Unregistered Rights and Trade Marks) (Jersey) Order 2020 came into effect.
The Minister acts as a conduit for requests from other Ministers who may request the Authority to carry out projects. The Authority reports formally to the States of Jersey through the Minister on an annual basis.
In 2021, the Minister's Department provided £577,000 (2020: £350,000) in funding to the Authority to finance the administration and enforcement of the Competition (Jersey) Law 2005. Additional funding of £114,000 was also provided in 2021 to fund specific market studies. The Minister's Department provided further funding of £150k in December 2021 to support the work to be performed in 2022 regarding Jersey's Telecoms Security Framework which has been recognised as deferred income (Note 6).
- The Authority and the Guernsey Competition and Regulatory Authority (GCRA)
The Authority and the GCRA worked together under the aegis of CICRA until June 2020, sharing a board, resources and expertise between the islands, whilst retaining their own separate legal identities. Recharges were made for expenses incurred (including staff costs) on a no gain no loss basis.
During 2021 £4,392 (2020: £168,250) was invoiced by the Authority to the GCRA and £Nil (2020: £128,012) was invoiced by the GCRA to the Authority. At the statement of financial position date the amount owed by the GCRA to the Authority was £459 (2020: £2,502).
- Key management personnel
Key management personnel includes all members (both executive and non-executive) of the Authority who together have authority and responsibility for planning, directing and controlling the activities of the Authority. The total compensation paid to key management personnel for services provided to the Authority was £266,569 (2020: £194,765).
Jersey Competition Regulatory Authority
Stephanie Liston Chair
Stephanie Liston is an acknowledged international expert in a wide range of technologies and has been a leading partner in the most respected communications law firms. She has significant experience in helping businesses navigate their marketing and communications strategies to address the broadest and most valuable markets.
Stephanie has extensive knowledge and experience of international and emerging markets. Stephanie is Chair of the UK Broadband
Stakeholder Group; Senior Advisor to Frontier Economics; Chief Executive Officer of Sequoia Way Limited; Associate Director of Innovation Advisors; and Founder and Director of Women in Telecoms and Technology.
Paul Masterton Senior Independent & Non
Executive Board Member
Paul Masterton joined the Authority in February 2017.
He has spent most of his career in the printing and communications industry in the UK, USA and Asia. Paul has a number of directorships in finance, insurance and property development. From 2012 to 2017 he was Chairman of Digital Jersey, a partnership between the States of Jersey and the digital sector to represent and promote the industry.
Lara Stoimenova Non-Executive Board
Member
Lara Stoimenova was appointed a Member of the Authority in October 2020. Lara is a competition and regulatory economist with significant experience in the private and public sectors, including the UK's Competition and Markets Authority (CMA) and Ofcom.
She is currently Managing Director of Sigma Economics and Associate Partner at DT Economics. In January 2022 she was appointed as an independent non-executive director and
the Chair of the Audit and Risk Committee at Portsmouth Water. She is also a Trustee at the Reform think tank.
Ian Walden Non-Executive Board
Member
Tim Ringsdore CEO and Board Member
Sarah Price Senior Case Officer and
Company Secretary
Ian Walden was appointed as a Member of the Authority in October 2020. He is Professor of Information and Communications Law and Director of the Centre for Commercial Law Studies, Queen Mary, University of London. His publications include Media Law and Practice (2009), Free and Open Source Software (2013), Computer Crimes and Digital Investigations (2nd ed., 2016), Telecommunications Law and Regulation (5th ed., 2018) and Cloud Computing Law (2nd ed., 2021). Ian was an expert nationaux détaché' to the European Commission (1995-96); Board
Tim has over 15 years extensive experience as a Managing Director within the telecoms industry, working at Board level across the Channel Islands, London and the Caribbean.
This included working with various regulatory bodies and building strong relationships which resulted in positive outcomes for all parties. Tim was Managing Director of JTGlobal (JT) and was pivotal in setting up Wave Telecom (a subsidiary of JT) in Guernsey in 2002. He also had responsibility for consumers and corporate clients across both Islands. Tim was also instrumental in developing JT's global business with the acquisition of Worldstone in 2012. As a Jersey man Tim was proud to move back to Island to join the Authority after leading Cable
Sarah joined the Authority in October 2014. She was appointed as Company Secretary in July 2020.
Previously, Sarah was Company Secretary at Andium Homes during the incorporation of the former States Housing Department. Prior to that, she was Group Business Manager for Ports of Jersey (Jersey Harbours and Jersey Airport) where she was extensively involved in the incorporation project and setting up the Shadow Board in 2011. During her time with the States of Jersey, Sarah
Member and Trustee of the Internet Watch Foundation (2004-09); on the Executive Board of the UK Council for Child Internet Safety (2010-12); the Press Complaints Commission (2009-14); a member of the RUSI Independent Surveillance Review (2014-15); a member of the Code Adjudication Panel at the Phone- paid Services Authority (2016-21); and a member of the European Commission Expert Group to support the application of the GDPR (2017-21). Ian is a solicitor and Of Counsel to the global law firm Baker McKenzie.
& Wireless as Managing Director based in the British Virgin Islands. He had jurisdictional and overall financial responsibility for the Cable and Wireless business (Flow) in the BVI and responsible for developing relationships with government, the industry regulator and corporate clients. During this time he restructured and rebranded the business to help improve credibility and the customer experience.
Since being appointed CEO of the Authority, Tim has built a strong team around him and ensures that the Authority is run effectively and efficiently for the benefit of consumers and businesses in the Island.
also worked on secondment with the States of Jersey Law Officers Department. Sarah completed a Master of Arts in European Competition Law from Kings College, London in 2019, having completed the Postgraduate Diploma in 2016 and has a Graduate Diploma in Law from Nottingham Trent University. She qualified as a Chartered Secretary in 2009 and completed her Chartered Shipbroker's exams in 2000.
Rory Graham General Counsel
Rory has 30 years' experience as a company and commercial solicitor in the technology and related sectors, with a strong emphasis on telecommunications. He has been a partner in a number of UK and global law firms, including Bird & Bird and Baker McKenzie, as well as setting up his own tech and corporate boutique law firm. His public sector experience includes the privatisation of the telecoms division of British Rail and acting for a bidder for the Elizabeth Line (Crossrail) rolling stock provision and maintenance contract, as well as defence and
Peter joined the Authority in August 2020. He is an experienced economist and has worked for a number of regulators in the United Kingdom.
His first role was with Ofcom, working across broadcasting, telecoms and spectrum projects. Subsequently, he was a Principal Economist at Ofwat, where he worked extensively on price reviews, market design and the management of water resources. Until joining the Authority', Peter was the Senior Economist for the Fourth
health related outsourcing and procurement deals.
A Glaswegian by birth, Rory studied law at Cambridge and trained in the City and Hong Kong. He is Honorary Solicitor to the annual Story of Christmas charity appeal and a trustee of the London Firebird Orchestra, which promotes the careers of recent graduates from the London Conservatoires.
National Lottery Licence Competition at the Gambling Commission. There he led the design of the new incentive and regulatory framework for the Fourth Licence. Peter has a first class degree in Economics and an MSc in Industrial Economics with Distinction from the University of East Anglia.
Peter Hetherington Senior Economic Case Officer
Claire Kybett Finance Officer
Claire joined the Authority in March 2021 and is a fellow of the Institute of Chartered Accountants of England and Wales.
Previously Claire worked in the financial services industry during which she was a Client Service Reporting Manager for a leading European Private Equity Fund, and gained extensive knowledge of fund administration and accounting over a 7 year period. Prior to this, Claire worked for a local international
accountancy firm within Audit and Assurance, focusing on regulatory and internal audits. Claire moved to Jersey in 2008, bringing with her extensive experience in auditing complex and large clients in the UK within a wide variety of industries, including pharmaceutical, motor trade and manufacturing.
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