Treasury snubs Scrutiny's hospital proposals

Sunday 15 January 2017

A leading backbench politician says his scrutiny panel is being denied the chance to possibly save the Island hundreds of thousands of pounds.

Deputy John Le Fondre, Chairman of the Corporate Services Scrutiny Panel, is angry Treasury Minister Senator Alan Maclean has snubbed his request for more time to investigate how Jersey’s new multi-million pound hospital build is going to be funded.

In a media statement Deputy Le Fondre says: “This is the largest amount of debt the States of Jersey has ever taken on, and a delay to the debate of four weeks seemed entirely reasonable given the circumstances. We had advisors line up who could have reported by 14 February, however, the minister has refused scrutiny the time to do its job. I will be making a statement in the States Assembly on this matter next week.”

It’s estimated the States is going to need £466m to build the hospital. A small proportion of this  - around £66m - will come from current reserves. But, it’s proposed the bulk of the money - £400m – will be a bond spread over 40 years. With interest of around £10.5m a year, that could bring the total cost of the hospital nearer to £900m. It’s proposed to pay back the interest and then the capital with profits from the Strategic Reserve – the so-called ‘Rainy Day’ fund.

According to Treasury Minister, Senator Alan Maclean: “Every funding proposal carries some risk but, based on current knowledge, this is the best way to make the most of our considerable reserves and strong balance sheet. It takes advantage of the fact that the historically low cost of borrowing is less than conservative estimates for future income from our Strategic Reserve, and it does this without requiring direct contributions from Islanders through additional charges or taxes.”

But scrutiny says there are alternative funding methods and are angry they haven’t been given more time to explore them.