Charities and publicly funded bodies invited to bid for share of £50m fund

Wednesday 18 November 2020

Charities, utilities and publicly funded organisations can now apply for a share of a £50m fund designed to give a boost to the island’s covid-stricken economy.

The Fiscal Stimulus Fund, which States Members gave their unanimous support to in the States Assembly today, is aimed at ‘timely, temporary and targeted’ projects which cost no more that £5m and will be completed by the end of next year.

The fund, however, underwent no independent analysis before it was proposed in June.

In backing the scheme, politicians also agreed how it will be paid for – by taking the first chunk of borrowing from the £500m overdraft, or ‘revolving credit facility’, that the Government negotiated with a number of local banks over the summer. Paying the interest on the £50m tranche will cost £395,000 a year.

During the short debate, Members were told that there was already a long line of organisations waiting to put their applications in. The Opera House and Jersey Water have already confirmed that they will apply for funding: the latter to renovate and repair its Gloucester Street home, the latter to connect 500 homes to mains water in 2021, which will cost £4m.

Jersey Heritage may also apply to repair the hospital and barracks on Elizabeth Castle and convert them to holiday lets, but first former ‘culture minister’ Montfort Tadier intends to amend the Government Plan to restore funding allocated to Heritage that was removed in the plan’s most recent edition.

Ministers have previous stated that Fort Regent could be another applicant to the fund.

Pictured: Fort Regent could be a recipient of some of the £50m fund.

Outlining how the fund will work, Treasury Minister Susie Pinel said that each application would be carefully considered as part of a five-step process, which included the States body, arm’s length organisation or not-for-profit making a full business case to a ‘Fiscal Stimulus Oversight Group’ comprising herself, the Chief Economic Advisor, the Group Director for External Relations and one independent member.

Following an accepted amendment by Deputy Kirsten Morel, that business case must also include a summary of the economic benefits that each project will deliver to the Island, including detail of which business sectors will derive most value, and the age and gender of the people most likely to benefit economically from it.

Deputy Pinel said: “The final assessment will result in a list of approved projects that will then be allocated funds in the form of a grant from Treasury and Exchequer to States bodies [who must sponsor each application] based on the business case financial requirements. 

“The FSOG will meet monthly to review the progress of projects and, where appropriate, conduct a post-investment evaluation on the amounts awarded.

Pushing the benefits of the fund, she added: “It will provide stimulus into the economy as part of a package of measures to enable the economy to recover more quickly, than would otherwise be the case. Ministers’ intent is that stimulus be provided on a timely and temporary basis, targeted towards projects that would support local employment and local business and as a subsidiary aim to further our Corporate Strategic Priorities. 

“The initial £50m will be available in two tranches with the first £25m for projects from November 2020 and the second tranche available for projects from February 2021.

“Across government and States-owned entities, major infrastructure plans will deliver considerable and sustained stimulus to the economy. The fund will accordingly not aim to replicate stimulus to the large-scale construction sector, but will be directed at smaller scale, more agile projects.”

Although Members all supported the creation of the fund, some politicians did ask for extra criteria. Deputy Rob Ward, for instance, called for the Oversight Board to give preference for green initiatives and projects that supported inclusivity and the low paid.

Deputy Tadier said that the Government could not reduce funding for departments and organisations and then suggest that they recoup their losses by applying to the fund. “This should be a case of robbing Peter to pay Paul,” he said. 

Referencing Elizabeth Castle, he added: “Ministers will probably want to steer Jersey Heritage to this fund but that is completely ludicrous because there is no certainty that it will meet criteria to be timely because the project is unlikely to be completed by end of next year. 

"It is about restoring and maintaining cultural assets in the island so there is a political element to this, and the project should not be left to the vagaries of the Fiscal Stimulus Fund. The decision to remove the castle funding from the Government Plan was presented as a fait accompli, which is a clear example of how not to do proper government.”

Pictured: Elizabeth Castle was promised £3.69m in the Government Plan but this has been withdrawn, unless Deputy Tadier’s amendment to reinstate it is successful next month.

Addressing the fact that the fund will be financed by borrowing, Senator Ian Gorst said: “This is first drawdown of the revolving credit facility and next year, we plan to draw down on it substantially more. 

“While it is recognised that this borrowing is necessary in the short term, we must come up with proposals to pay this back in the medium term. We must come up with credible repayment proposals because we cannot saddle our children with the debt.”