Jobs, growth, diversity and innovation

But with growth as it is, it comes at the right time. It has committed to spending £25m. in a five-year period, money that will be invested by professionals at arms length in innovative businesses.

If all goes to plan, not only will it receive a return on that investment, but local businesses will benefit, jobs will be created, the tax base diversified and the economy will grow. This is innovative thinking, working with the private sector to make the most of Guernsey’s expertise in finance.

It is, though, not without its risks.

The Jersey Innovation Fund had a similar philosophy, although a much smaller budget and poor controls. It failed, with some £1.4m. in taxpayer’s money unlikely to be recovered and serious questions about the governance structures and lines of accountability. A key difference in the two models is that investment decisions in Jersey ultimately fell to a minister advised by experts – in Guernsey the board is independent.

It was a painful lesson, but the failures in the structure of the Jersey model have been exposed for Guernsey to learn from.

There will be some unease among those deputies who prefer to have complete control of public spending, but there are few among them, or indeed in the public sector, who have the right expertise for this type of approach. There does, though, given the public investment, need to be mechanisms and reporting procedures to ensure there is transparency and accountability.

Initially the fund will invest in technology and innovation companies. Property and infrastructure cells are being considered for the future, both areas where the fabric of the island could benefit.

Tightening finances have pushed the States into thinking about new ways to ensure public money is spent as effectively as possible. Unencumbered by the laborious structures of government, this latest approach has the potential to act swiftly to benefit both small and large entrepreneurs.

The States has long struggled to create the conditions to diversify the economy – the Guernsey Investment Fund could be the trigger for just that.