In search of the black hole
Where's the black hole now? Horace Camp is struggling to take anything this States says seriously.
There are times when I regret not being a user of strong language, and this is one of those times. I suspect that even if it wasn’t my way that the editor would be unlikely to print the words I have in mind. I’m therefore going to channel the late, great Terry-Thomas and describe our current States Assembly as an absolute shower. A positive shower.
The @tothevale parody account on Twitter summed up the achievements of this group of deputies by listing all they have achieved in this term so far, which is absolutely nothing. We have to ask ourselves just what they are good for. Well, it beats me, but they must believe they are all doing very well given they are pocketing a generous pay rise.
With two long years still to go, the Assembly is already a busted flush. Leadership is totally lacking, as is any direction of travel. Rushing newly-minted but flawed legislation designed to placate Moneyval through on the nod is about the only success story and that’s because it’s mostly run by one officer who will brook no dissent.
P&R members are still sulking after the GST failure and, having thrown their toys out of the pram, refuse to play with anyone until they get their sales tax back again. I somehow can’t but think of Violet Elizabeth Bott threatening to scream and scream until she is sick whenever I read anything from the Treasury lead on public finances.
On Tuesday I read the scary headline in this paper that ‘Black hole now £135m. after investments take big hit’. Obviously intended to have us running around begging for a GST to save us. The narrative behind that statement is more Hans Christian Andersen, more fairytale than fact.
If we had carried on using back-of-fag-packet accounting rules rather than ‘transitioning’ to internationally accepted accounting standards, a fair chunk of that black hole would disappear. Then there’s the accounting for return on investments. The value of investments rises and falls with the market. Comparing the values from 1 January to those of 31 December could show a major rise or fall.
But unless those investments are sold, any profits or losses are unrealised. For instance, if the value had drastically fallen on New Year’s Eve, then the black hole gets deeper. If the value rebounds two days later, then the black hole fills itself in a bit. Return on investments is arbitrary and unless sold are taken as at one day out of 365. Bit of smoke and mirrors here, I think, and just confuses the outcome unless we can be absolutely certain of the accounting principles.
But the headline was scary enough to suggest the idea of GST again. And the article was clever enough to ridicule the idea that the accounting principles used being deficient was entirely poppycock. Well, I’m not an accountant but I have read and signed off more sets of accounts than you could shake a stick at and I’m not convinced about our black hole.
Which is another thing about this Assembly – is there anyone left who trusts anything they say? And who really believes they listen? The absolutely dreadful policy letter bought by Education, Sport & Culture to amend the Education Law appears to have been written in an exam room with whoever drafted it huddling over the paper to make sure no one could see what was being written.
In retrospect, we were far too quick in condemning the previous committee’s view of education and thus sacrificed cohorts of children to a far worse outcome.
Two more years we have to put up with this. I despair. They are even asking us to tell them how the States can save money. How on earth can we do that when it is pretty impossible to glean from the accounts what anything actually costs? And anyway the States is a very complicated beast and it's hard even for those who should know how it works to actually know how it works.
I see from the States budget that Corporate Services has a budget of £69m. That seems a lot. But then I don’t know what Corporate Services is. Do you? If I don’t know what it is, how can I suggest a way to run it cheaper?
Let’s look at Health & Social Care – it has a massive budget of around £212m. But it costs more than that to run because it keeps the fees it earns from private patients and A&E. How many hours am I meant to investigate those fees to determine if they turn a profit or just defray costs?
Basically, I can’t see anything meaningful coming from the general public in terms of savings recommendations and I fear it’s another smoke and mirrors device to support the introduction of GST.
Last year the economy did better than expected, with income tax receipts being nearly 8% higher than anticipated. Surprisingly, most committees spent less than budgeted. Spend less, earn more – and what was the outcome? You guessed it, we ended up in deficit because of the aforementioned ‘losses’ on the invested funds, which probably weren’t losses anyway but just a valuation taken at one moment at the end of the year.
I can’t take anything seriously that comes from this Assembly. I just don’t know how we will put up with them until 2025. I only voted for six of them and they are not the worst, but I’m starting to feel I wasted six votes. Rather than setting us the impossible task of coming up with savings ideas, I think we should be asked for ideas of how to make 38 deputies fit for the purpose of representing us.
If I didn’t have three delightful five-week-old kittens fast asleep on my lap, I’m not sure I wouldn’t break my expletives rule. But frankly this States isn’t worth waking up Patch, Ginger and Tother over.
The States of Guernsey was approached to offer a response. It commented as follows:
The States Accounts present the position of public finances impartially and are independently audited.
There are changes in how they are presented this year as a result of moving towards International Public Sector Accounting Standards which is something the community has called for, and the States has been entirely transparent in what those changes are in its media release on Monday 26 June.
Similarly the States fully explained the difference between the operating deficit of £3m., and the ‘overall deficit’ which is significantly larger, in the main because of investment losses.
It made the point very clearly that those investments ‘should be kept in context, as losses one year can be recouped as markets bounce back… the same is true for good years such as 2021 when investments perform well’.
Even if this year’s accounts had shown a good investment performance, they would have been presented in the same way, as was the case in 2021. The Press and its columnist have not sought any further clarification on the latest accounts.
Notwithstanding that, we hope the media would acknowledge the efforts the States has made to provide impartial and transparent information with relevant context.