Guernsey must act now on capital spending – think tank
AS IDEAS swirl on how Guernsey can build back better after the pandemic, a pressure group has urged the States to lock in on low interest rates and move quickly.
The Guernsey Policy & Economics Group (GPEG) has issued a report on the island’s capital expenditure, and its first recommendation is to reduce the complexity of the approval and procurement processes.
The document notes that: ‘batting inordinately long papers between committees, deputies and the civil servants is clearly too ponderous, slow and expensive’.
GPEG is made up of leading financial figures such as Lord Digby Jones and Jon Moulton, and the report is upfront that it is not the be-all and end-all of capital expenditure.
‘Creative and well executed capital spending is capable of improving both the economy and living standards in Guernsey. It can help in generating an attractive and modern image.
‘We hope that this paper illustrates the key features of choosing and implementing good capital expenditure programmes.
‘It is not, and makes no claims to being comprehensive.
‘One issue shines through – even the best analysis does not eliminate the fact that future events are not capable of accurate estimation.
‘However, not attempting that prediction mostly works out a lot worse.’
The island’s track record on capital spending has been judged to be poor, for instance in July last year the States’ own Scrutiny Management Committee expressed disappointment that in the 10 years to 2018 the only capital spend had been on refurbishment or replacing existing assets.
Numerous projects have been approved by the States, but not delivered, and Policy & Resources currently has delegated authority for approximately 40 projects, costing in total at least £295m.
The island’s political system, with no party majority, is partly blamed for the obstructions and delays in making difficult and risky decisions.
In total, there are nine recommendations to assist politicians in their efforts to get Guernsey’s economic engines revving.
These include the suggestion to get rid of confusing notions of capital reserves and allocations within the States Accounts, more centralised project management, a rapid reduction of the maintenance backlog, and using local expertise and contractors as much as possible.
Another idea is to encourage public participation and an acknowledgement that ‘the States don’t have a monopoly on good ideas would be welcomed by those who end up paying for it'.
For big projects the recommendation is that there should be better public scrutiny.
‘For larger projects there should be regular public reporting of progress – or not.
‘The ongoing Agilisys IT contract is exceptionally large (£200m. or around £3,000 per head of population), expensive and complex.
‘There is a great deal of history (in most jurisdictions) of government IT contracts of this extensive scope going off the rails and there are a few issues already apparent.
‘Making issues visible will help reduce their impact and encourage reducing repetitive mistakes.’
The need for speed is highlighted several times throughout the report.
‘Whatever is done must be done quickly.
‘There will never be a better time given the alignment of cheap money, #Guernsey Together, a new administration, and clear and present, visible needs.’
n The full seven-page report is on the GPEG website at www.gpeg.org.gg
