“Extensive” measures to manage risk around the financing of the Island’s new hospital are in place, a senior civil servant has told a Scrutiny panel.
During a hearing with the Corporate Services panel, States treasurer Richard Bell said that identifying and managing risk was a “key focus” for his department.
“There are a number of risks associated with what would be by far and away the largest capital programme for Jersey, and it’s very important that we focus as a government on delivery of that, rather than just thinking that the contracts are signed and that it’s down to the programme team to deliver,” Mr Bell said.
“A large number of people will be working on the project, and they need to be housed in certain areas.
“Obviously, the weather can impact the building programme and there are, geopolitical risks out there, which are quite considerable in terms of the costs that we might incur.
“There are key milestones to be hit, so the team has a an extensive risk management programme in place to keep reviewing those risks and to keep to ensure we’re on top of delivery against time, but also delivery against budget.”
Asked by panel member Deputy Lee Carpenter how the £710 million scheme would be funded, Treasury Minister Alan Maclean said that in the longer term he hoped that funds could be sourced from the bonds market for the first phase of the project at Overdale, but that rates were currently “unattractive”, so borrowing was the short-term route.
Turning to the wider health estate, Senator Maclean said that he would like to see an overall health strategy produced. He admitted he was uncomfortable with the potential levels of debt, and would be seeking strong business cases for the later phases of the work.
While the forthcoming Budget includes forecasts of around £50m annual income from the new Pillar 2 corporate tax regime, Senator Maclean said it was hoped that there may some additional one-off income above this figure, and that this money could be allocated to the hospital project.
The Treasury Minister said he was looking to bring a “strategy of prudence and balance” to the Council of Ministers and the Budget proposals, due to be lodged by 29 September. But he admitted that there would be challenges resulting from a number of growth bids from departments which collectively amounted to a potential cost of £40m.
While those making the bids had deemed them to cover “emergency” issues, Senator Maclean said he believed that this was not the case in some areas and that he hoped some of the work could be pushed back later in the 2027-30 Budget time-frame.
