Reform Jersey says it is “extremely concerned” a political decision has been made to hit “reset” on the hospital project “without any guarantee of a more affordable alternative”.
Infrastructure Minister Deputy Tom Binet last week confirmed that the £804.5m project, which has planning permission and whose funding was approved by the previous States Assembly, was off the table because the island could no longer afford it in light of the global economic crisis.
It also ordered that work be halted on building homes at Kensington Place, in case the land should be needed for an expansion of the current hospital at Gloucester Street.
The move sparked particular consternation from the project's previous political leader, Deputy Lyndon Farnham, who said the decision to call it off should be made by all States Members, rather than a single Minister who he described as someone who "doesn't know what he is talking about."
This morning, Reform Jersey leader Deputy Sam Mézec told Express that his party's 10 sitting States Members were equally dismayed by the decision.
"There does appear to be an inconsistency in the Government telling us that public finances are so healthy that we have tens of millions of pounds available to tackle the rising cost of living, while simultaneously saying that things are so bad that we can't sign up to borrowing that was only agreed last year. Which one is it?" he said.
"We are extremely concerned that because of a political decision to rule out the current project, we could end up initiating a reset without the guarantee of a more affordable hospital which the government is seeking to achieve."
Pictured: Reform Jersey's 10 States Members.
He noted that the party was "clear" in its manifesto that, while it did not "regard the Overdale site as being ideal", "Jersey cannot afford to waste more time and money on the new hospital project" and that the current project should be delivered with a close eye on expenditure.
Rather than "committing to spend tens of millions of pounds on consultants to restart the new hospital project for the third time", the party said in its manifesto that the focus should instead be on "delivering healthcare services, getting waiting lists down and supporting our healthcare professionals."
Deputy Mézec added: "During last October's funding debate, we voted to hold back on approving the full amount until we have greater clarity of the costs.
"I think it is very naïve to start a process convinced that it is inevitable that alternatives to Overdale will be substantially more affordable than the current plans."
Pictured: Former hospital project leader Deputy Lyndon Farnham (top left) said he was concerned that new Infrastructure Minister Tom Binet (bottom, centre) had misunderstood the financial position of the hospital project.
In October last year, States Members agreed that the hospital should be funded via two bonds, repayable over 30 and 40 years.
Ahead of voting, politicians were reassured that by adding a lot more borrowed money to the £1bn 'Rainy Day Fund', the return from investing that money would help the reserve pot to grow enough to repay all the capital.
In explaining the rationale for scrapping the Overdale project last week, Deputy Binet said that global volatility meant the Rainy Day Fund stood to lose up to £15m this year, meaning that the island would not get the investment return it needed to repay the debt.
However, the Treasury Department confirmed to Express yesterday that the long-term forecast for the Strategic Reserve was still positive. It said that, though returns were likely to experience volatility in "the short to medium term", it was "confident that the States Funds' Investment Strategies remain well placed to meet their objectives."
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