Back to the future as ‘new’ £466m Hospital funding plans revealed

Tuesday 31 October 2017

It appears the clocks went back more than just one hour this week - the funding plans for the £466million new Hospital have finally been revealed, again - and may give some a sense of déjà vu.

Ministers have today put forward proposals to finance what will be the island’s largest ever capital project through a mix of borrowing and money from Jersey’s so-called ‘Rainy Day Fund.'

A so-called “blended solution” was the last suggestion tabled by the Treasury Minister before he dramatically withdrew funding plans altogether less than 24 hours before the States Members were due to approve them in May this year, following a last-minute proposal from an as yet un-named third party. 

If agreed by the States Assembly later this year, the latest approach will see up to £275million borrowed through a sovereign bond at a predicted rate of 2.625%, and up to £168million drawn from returns on the ‘Rainy Day Fund’, which have averaged 6% growth over the last 10 years. Added to this, a budget of £23million has already been set aside for the project. 

Video: A fly-through of how the new General Hospital is expected to look.

That money will cover buying the land for the new hospital, its construction, relocating services as work progresses, refurbishing the traditional granite building, the cost of renting accommodation for health care workers, professional fees and extending Patriotic Street car park.

The proposed new hospital would be completed in 2024 if current timescales are met, and would have eight storeys, and an estimated 24% more space than the current building. There would be nine operating theatres, and all adult inpatients would have their own room. 

Ministers say that this strategy, which they argue takes advantage of the island’s strong balance sheet and historically low borrowing rates, will allow them to fund the project in its entirety without additional costs to the taxpayer or departmental cutbacks. Under the plans, Jersey should still be able to maintain its low levels of debt - up to 13% to GDP ratio if the bond goes ahead, in comparison to the UK’s 89% - while reserves would stay intact to help rebuild in the case of unexpected economic shocks or natural disasters.

Treasury Minister Senator Alan Maclean described the plans as, “...an affordable solution that makes the best use of the savings our community has accumulated over many years, while maintaining the value of those savings so future generations can continue to benefit from our investments.”