Comment: "We now...have a culture of borrowing...alien to this proud island"

Tuesday 12 December 2017

Today Jersey's politicians will begin to discuss how we pay for the biggest government building project the island has ever seen - a new £466m hospital. Express columnist, Andy Jehan, considers whether we are planning to borrow too much to pay for it.

"Are we putting our children's futures at risk by extending the Island's borrowing further for the new hospital?

"Jersey has weathered the recent financial storms fairly well compared to some. It has been able to do this, in part, due to the strong financial balance sheet it has built over many years with its, 'rainy day' fund, otherwise known as the Strategic Reserve. One can argue that during this time we didn’t invest enough in the Island's infrastructure; alternatively, you could ask, did we save enough when the sun was shining, or did we squander too much money? 

"The recent announcement of appointments by the States to speed up government reform is to be welcomed, as we need to ensure all spending is warranted, before increasing taxes or the dreaming up new charges. 

"We now appear to have a culture of borrowing, something that is alien to this proud Island - firstly, with taking out a bond for £250m for social housing, and now it is proposed to borrow a similar amount to part fund the hospital. 

"I asked an innocent question of the Treasury Minister in June: how much had we made from the money on account for social housing? The answer was, "...we suffered a carrying loss," it had actually COST us £4million pounds. Did we need so much money, and if we did, how had we planned to spend it and over what period? 

"How long will it take to spend the money at the Hospital? What is the phasing required? How does this fit with the existing loan for social housing? There is a danger of repeating the same mistakes rather than getting best value. 

"It seems to me that before we borrow more money we should really see what we have and what we need. One thing that is in abundance in Jersey is financial knowledge and know how, yet it appears that we have once again bumbled along trying to work out what is best. 

"I believe the proposal of Senator Ozouf is a good one: use the existing borrowing that we already have to part-fund the hospital, and free up Andium to make their own commercial arrangements as and when they need funding.

"The debate has gone on too long now, but I would hope that some simple questions have been asked. How else could we fund the hospital? Have partnerships been explored? We hear of some good work being done locally in the digital health arena, is there provision to develop this in the plans?

"If we don’t use the bond that the States already has, what about a local bond scheme? This has been suggested before, if we have to pay above the bank rate why can't locals get a piece of the action, and the island benefit from increased tax returns from those who are prepared to invest. 

"What is clear to me is that there can’t be any further delay and we should expect our politicians to actually make a decision so that the project can commence."