New ‘hospital charge’ could be a bitter pill

Saturday 16 July 2016

Plans for a new hospital for Jersey, due to be completed by 2025, could be part-funded by another direct charge on Islanders, which would be in addition to the planned new health charge.

At a meeting yesterday of the Corporate Services Scrutiny Panel, Treasury Minister Alan Maclean revealed that although plans were still very much in the embryonic stage, he agreed one way of funding the new building would be a ‘hospital charge.’

Ministers say Jersey’s new hospital is long overdue and must be financed in order to meet the needs of an ageing and increasing population.

One possible solution, according to Senator Maclean, is for a hospital charge - separate to a health charge, which the Minister is hoping will be ratified by the States in September, following its proposal in last month’s Medium Term Financial Plan (MTFP). 

Any hospital charge will be used to top up money raised from the States’ reserves fund and a loan - which would include interest payments.  

Senator Maclean admitted that a direct hospital charge is a possibility, saying: “The funding arrangement for the hospital are yet to be fully clarified but we are looking at a blended solution. Clearly there needs to be an income source so ministers have to give careful consideration over what that income source will be. 

“It wouldn’t be a health charge but there could well be a charge to help fund the hospital. 

“We will use our reserves as well. The idea is for a blended solution so we will use some of our reserves, but we wouldn’t want commit all our reserves to it. 

“It would be an infrastructure charge, effectively for the building of the hospital. I would be loathe to use up too much of our reserves to fund a hospital, consequently it needs to be funded by other means. 

“We will consider all the areas to bring in that income source. If you asking me to say would we use the same mechanism as the health charge, that has yet to be decided on, but we do need to consider possible sources for raising the necessary funding for the hospital.”   

Deputy John Le Fondre said such a direct charge should be treated with caution by taxpayers. 

He said: “It is important that States numbers understand the impact hospital funding will have in the context of all the other tax charges which will be borne by the tax-paying public and have been outlined in the current MTFP.”