Scrutiny to review States’ capital projects process
A REVIEW is under way to try and stop Guernsey’s major capital projects grinding to a halt, and to give taxpayers better value for money.
The Scrutiny Management Committee has announced it is looking into the current system of how the States pays for its big capital deals.
Earlier this year the new waste station at Longue Hougue opened but with significantly reduced facilities to what was first promised to keep it on budget.
Scrutiny’s analysis, which will include a public hearing, will be a general review of the capital budgeting process rather than focusing specifically on waste.
Committee president Deputy Chris Green said it aims to learn the lessons from the past and apply them to avoid any future financial waste.
‘We want to inform and enhance because there’s no point in doing a report and leaving it on the shelf to gather dust. There’s already enough of those in the States.
‘There has been ongoing political and public concern that the commencement of new capital projects by the States of Guernsey has stagnated and, on some occasions, the costs have progressively soared from the initial costs approved by the States.
‘The committee wants to assess, among other things, whether there is a better way of handling the estimates for large capital spending projects before being approved politically and going out to tender.’
Head of the review panel, Gill Morris wants to make sure that politicians get the right information.
‘The current process has been in place six years and the States haven’t done a lot of capital projects in that time. However, there are many potential projects in the pipeline, including the hospital, schools, the IT strategy, the inert waste strategy, and Hydroport.
‘There is money to invest but our concern is twofold. Firstly we need to make sure there is sufficient information given to politicians without giving construction companies a figure to aim at, and secondly the processes must be robust with value for money.’
The Scrutiny committee has already identified a ‘rarity’ of capital projects undertaken by the States in recent years, Mrs Morris said, although money had been set aside for major projects.
‘There is a question about whether we should have done this sooner, but we believe there are other factors which have slowed down capital investment, there’s been fiscal constraint, and also it takes a while to put the projects in place.
‘For example, with Education, the strategy had to be there first.’
As well as the bond, the States currently has two main reserves that it uses to fund capital expenditure – the capital reserve and the transformation and transition fund.
In 2016, the States spent £32.4m. from these two reserves, and in 2017 that dropped to £10.5m.
That was despite the money available in the reserves increasing by more than £78m.
The review will consider a number of areas, including whether the current process of allocating funding for capital projects is appropriate, whether the information supplied to States members at the initial stage of approval is sufficient, and it will look at the increasing use of ‘delegated authority’ by the Policy & Resources Committee.