Minister to be quizzed on £250 million loan

Friday 10 January 2014

Treasury Minister Phillip Ozouf faces Scrutiny on Monday over States plans to borrow £250 million to build and refurbish social housing.

In approving the 2014 Budget last December, the States backed the minister's unprecedented plans to borrow a quarter of a billion pounds. The money will go to Housing Trusts and Associations, although the main beneficiary will be the Housing department, which is due to be incorporated as a States-owned company later this year.

Currently, the Public Finances Law does not allow the States to loan such a substantial amount, so the Treasury Minister has had to bring forward proposals to increase the limit. With hundreds of millions of pounds worth of taxpayers' money sitting in the States 'Rainy Day Fund', politicians have always been reluctant to borrow money.

The States debate on the borrowing proposition was halted so it could be referred to the Corporate Services Scrutiny Panel for review. The Chairman of the panel, Senator Sarah Ferguson, said they had been advised that the proposed change to the limits on States lending was simply a technical one,  which is required following the States agreement to borrow for social housing purposes.

“Nonetheless, it relates to one of the most significant decisions taken in recent times by the Assembly: the borrowing of £250 million and its subsequent loan to the new Housing Association. We will, therefore, be questioning the minister to ensure that the proper checks and balances have been put in place before any loans are made,’ she said.

In addition to Senator Ferguson, the panel comprises: Deputy James Reed; the Constable of St Lawrence, Deidre Mezbourian; and Deputy Richard Rondel