Lack of infrastructure spend ‘has damaged the economy’
POLITICAL dithering, a lack of accountability, and untrained staff have all been identified as reasons for a severe lack of public investment in Guernsey’s community infrastructure which has damaged economic growth.
An investigation has found that States’ major building projects are bogged down in confusion and layers of bureaucracy.
Between 2009 and 2018, £291m. was not spent that should have been according to States targets.
The timing of the publication of the review into the States’ capital allocation process is highly pertinent because the island’s leaders have flagged up a speedy construction of community infrastructure as the key driver out of the worst economic crisis in decades.
However, its track record on delivering infrastructure projects has been found to be ‘excessively cautious’.
The report was written by the Scrutiny Management Committee following extensive interviews with industry representatives, civil servants, and past and present deputies.
A total of 21 recommendations have been made for improvement.
Gill Morris, the non-States member on the committee and the leader of the review, discovered that a fundamental overhaul was needed if the island wanted to realise its post-Covid revive and thrive ambitions.
‘The issue really is that the processes in place aren’t very well understood at all, by the people who have to live by them, and that’s politicians as well as public servants. And they’re not proportionate, so if you’re building something small or replacing an asset you have to put in the same amount of effort as if you were building a brand new school on a brand new site.’
In 2013, the States switched to a new system of capital funding to allow for more checks and balances and fiscal prudence.
SMC president Deputy Chris Green said the opportunity to reap the pay-offs from infrastructure stimulus through the ‘multiplier effect’ had been missed.
‘We’ve had some independent analysis done as part of this review which confirms that by underspending on capital it’s had a very material impact on the economy, it would have boosted economic growth by a significant amount if we’d spent it.‘And I think that’s something that those who’ve been in charge of the capital programme at P&R in this term, and Policy Council in the last term, have to be held to account on.’
On average, States total capital spending in 2009-2018, including on routine maintenance, was £38.5m a year – a little over half of the level of £67.6m a year if the agreed target for spending 3% of GDP had been met.
Among the recommendations are that the States needs to re-prioritise the list of projects in the wake of Covid-19, the pipeline of work must be smooth to prevent boom and bust, and maintenance work should be carried out this year on sea and flood defences.
