Bid to debate the financial exposure of Public Trustee

The motion to debate the office’s accounts from last year has been lodged by deputies Gavin St Pier and Adrian Gabriel.

Deputy St Pier said that, given the significant exposure for taxpayers from the grants made to the Public Trustee by the States – which increased by nearly £1m. to £5.89m. over the course of 2023 – and the fact that these grants, made to cover legal costs, may or may not subsequently be recoverable from the trust structures within the Public Trustee’s responsibility, public scrutiny of its accounts through a debate was warranted.

‘With this ever-increasing exposure for taxpayers there is significant uncertainty about the likelihood of a full recovery of public funds from the trust structures being managed,’ he said.

‘A debate will provide an opportunity to better understand the prospects of recovering the public funds at risk and to receive an update on what progress, if any, has been made in the review and reform of the Public Trustee function.’

The Office of the Public Trustee falls under the remit of Economic Development, and has traditionally acted as a trustee of last resort, only stepping in to manage a trust when a licensed trustee is not able to act.

Deputy St Pier said that about six years ago, the Public Trustee was obliged to act as trustee for a series of trusts with predominantly liquid assets that had no connection with Guernsey, other than the fact that they were governed by Guernsey law.

As a result Deputy St Pier said the Public Trustee had become ‘mired’ in litigation.

‘The main issue is that, to do its work, the Public Trustee needs funds from Economic Development to operate, and these are taxpayer funds,’ he said.

‘There is a risk that the funds may not be realised and the States cannot recover them, which would leave taxpayers out of pocket.’

Economic Development president Neil Inder said earlier this year that alternative funding options for the body were being explored, with its funding model set to be ‘very different’ by the end of the current political term.

However, no progress has been reported publicly to date.

Deputy St Pier said a review into the role of the Public Trustee and the criteria by which it operated should be considered.

‘In my view, it should not take on trusts that have no real connection to the island other than the fact they are governed by Guernsey law. There needs to be a discussion about what the Public Trustee’s role is and what it should take on.’