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Pressure on Treasury’s time and resources may mean that £20.4m left over in the money pot for stimulating Jersey’s covid-hit economy goes unspent.
According to Treasury Minister Deputy Susie Pinel, the department may not have the time or resources to decide who should be given the remainder of the Fiscal Stimulus Fund, particularly as the publication of the next Government Plan draws nearer.
Just over £29m has been allocated to local organisations from the £50m pot.
The fund’s first applications phase received 93 expressions of interest for the grants worth up to £5m from Government departments, charities and arm’s-length organisations worth £102.4m – of these, 47 were deemed to meet the fund’s criteria of providing targeted and timely support to the island’s economy.
The majority of the nearly £23m granted went to projects involving construction, maintenance or refurbishment of local facilities.
16 of the projects which didn’t get funding through the first phase were examined in the second one, with an additional 65 applications submitted. 17 projects across 14 organisations were eventually selected for a total of £6.8m.
In both phases, the Corporate Services Scrutiny Panel voiced concerns about the high number of projects involving construction, suggesting it could overstretch the local industry and create bottlenecks at Planning.
In a recent letter to Treasury Minister, Deputy Susie Pinel, the panel said: “There appears to be sufficient optimism from the construction sector, significantly benefiting from tranche one of the Fund, which would suggest that the need for additional immediate short-term fiscal stimulus measures in this area should not be a priority.
“…The panel maintains concerns that the number of construction project bids not only focuses the Fund to that sector but also risks elongating projects due to lack of capacity, even of smaller construction firms.
“Furthermore, the panel maintains concern that certain projects which require planning permission risk missing deadlines due to the drawn-out process of receiving that approval, which will only be worsened if there are a large number of planning applications being made during 2021.
“The panel suggests that funding is made available to the planning department in order to ensure that the resources of Government do not delay the process for either the public or private sectors."
Pictured: Deputy Susie Pinel, the Minister for Treasury and Resources.
In her response to the Panel, Deputy Pinel said the Fiscal Stimulus Oversight Group had considered the matter “closely” and received economic advice that acknowledge the issues that might arise from the “concentration” of construction project but was also supportive of the allocations made in both tranches.
She went on to say that funding would be released to the relevant organisations only once they had received planning approval and confirmed they would be able to meet the initiative’s timescales.
When the fund was established to provide stimulus on “a timely, targeted and temporary basis”, it was said the project would be expected to be completed by December 2021.
However, the Government didn’t stick to its original timeline - successful applicants from the first tranche were due to be announced in early March were revealed in mid-April. The second phase announcement was also delayed from 5 April to 16 June.
Pictured: Funding will only be released for projects when planning permission is received, the Minister confirmed.
Deputy Pinel said she was considering whether to grant any more money from the fund however adding that given its “considerable impact” on internal resources she was concerned it might not be feasible.
“I am taking a further period to consider the final allocations from Fiscal Stimulus Fund and will inform you once I have had some time to consider all of the available information,” she wrote.
“The impact of the Fiscal Stimulus Fund projects on internal resources has been considerable and it is my concern that there is no further capacity to manage any projects internally given that we are about to enter the Government Plan workstream but I need to balance this with the requirements of the economy.”
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