Chief Minister grilled over covid support scheme 'conflicts'

Wednesday 12 May 2021

The Chief Minister has said he wasn't aware of any “direct pecuniary or personal conflicts of interest” among Ministers involved in approving covid support schemes, as he was grilled over the Economic Development Minister's link to the Royal Yacht Hotel.

In yesterday's States Assembly meeting, Deputy Geoff Southern asked the Chief Minister about the involvement of Senator Lyndon Farnham in the decisions surrounding business support schemes through which the Royal Yacht Hotel, for which he has provided consultancy services, had been claiming financial support.

In total, the Royal Yacht received £1,1873,110 in Government support, including £694,000 through the Co-Funded Payroll Scheme.

Senator Le Fondré said Senator Farnham, who is also Deputy Chief Minister, had attended the meetings of the Competent Authorities Ministers, who had “considered and endorsed proposals” relating to the Government’s pandemic response, as well as participated in discussions around how the Government should support local businesses and their employees. 

Pictured: Senator Lyndon Farnham acts as a Consultant to the Royal Yacht Hotel.

The Chief Minister said that during those discussions Senator Farnham had always been “at pains” to make a declaration of interest, consistent with the one he had provided as a States Member, which he said had been “understood and noted”.

Deputy Southern then asked the Chief Minister to confirm he didn’t believe there was “no question of conflict of interest when the Assistant Minister concerned describes himself as a consultant to a recipient of benefits which he has helped to create."

The Chief Minister replied that the Co-funded Payroll Scheme had been approved by the Treasury Minister, Deputy Susie Pinel, before explaining that the Government had tried to apply the same criteria used for States Members in their discussions.

“If there is a direct pecuniary interest obviously a Minister has to withdraw but if it is one shared by a wider interest, declarations of interest are expressed,” he said.

Pictured: In total, the Royal Yacht received £1,1873,110 in Government support, including £694,000 through the Co-Funded Payroll Scheme.

States Members questioned what role the Senator had had in setting the criteria for the schemes, but the Chief Minister said he didn’t have the full details.

“All the schemes that we have obviously approved have been put together by officers, they will then liaise with relevant ministers before they come up formally through that process, it all depends on the circumstances,” he said.

“For the Visitor Accomodation Support Scheme, from recollection the Minister did declare a perceived conflict and from memory withdrew from the decision-making process on that. I would have to go back and confirm but that is my recollection." 

Pushed by Deputy Rob Ward to comment on any issues arising from Senator Farnham setting up a scheme in “something he has declared an interest in benefiting from directly”, the Chief Minister added: “We would need to demonstrate a clear direct and pecuniary interest for a conflict of interest to exist.  Firstly, where there had been a perceived direct interest the Senator has not participated in the approvement of the scheme, but where those interests have been shared by a much wider audience, there has been participation, but it has been declared and that’s been accepted by all of those that were present.

“We had to move swiftly… At one point the [co-funded payroll scheme] was supporting one employee in four in the island so there will have been many businesses that enjoyed support, but that was actually a need and historically compatible with the role of Minister for Economic Development.”

Pictured: Senator Le Fondré said he was not aware of of “any direct pecuniary or personal conflicts of interest or benefits” arising from the schemes.

Deputy Southern asked whether the Chief Minister was aware of any action Senator Farnham might have taken that “resulted in £1.6m of support being available to that company at the same time it was making £2m profits”, suggesting he would have had a pecuniary interest in the matter as an adviser to the board.

“We are getting into the realms of what I would say is very personal data, and I am unclear as to the accuracy or not of the data that has been provided by the Deputy and I haven’t looked into that side of things,” the Chief Minister said.

“What I have said, I don’t think I can add anymore, is that appropriate declaration of interest have been made and that particularly with Senator Farnham he has been absolutely clear on many, many, many times, including in the Assembly, about declaring his interests, the fact that he acts as - I believe he uses the expression ‘a consultant’ and my understanding is that it tends to be in a very limited capacity and that has always been very open. 

“I think from his perspective it’s regarded as very much a matter of transparency in possibly going further than he normally would need to do. In terms of the decision-making process, where there had been decisions, their effect have been across the board I sited the payroll scheme, which supported 17,000 people.”

The Chief Minister said he didn’t know whether any risk assessments had been carried out over direct conflicts of interest involving Ministers or officers who may have benefited from the schemes, he however assured he wasn’t aware of “any direct pecuniary or personal conflicts of interest or benefits” arising from the schemes.

He agreed to speak with the Privileges and Procedures Committee the possibility of introducing a declaration of all payments made to all States Members and their related parties perhaps in the current Assembly and the previous one, in the interest of “full transparency and accountability”. 

Deputy Steve Ahier suggested the States Assembly could become unworkable if States Members had to stand down whenever there was the “slightest issue of conflict of interest”, to which the Chief Minister agreed.

“Conflicts of interest can be very wide ranging, the fundamental principle is that one has got to make sure that if there is an interest that it is properly declared and it is to the individual member to assess whether they think that impinges upon their judgment in terms of how they arrive to decisions, I think that’s what the public would expect,” he said.

“In a small community, as the Deputy rightly said, relationships with unions, with trade bodies, with businesses, or other organisations and charities, will potentially give rise to a perceived conflict, it then comes to down to say, 'Is it a pecuniary conflict or is it a wider conflict that is shared by a wide range of people?’”