States spends a lot – unwisely
ON 19 March Guernsey entered into what in most societies would be called a ‘state of emergency’. For the past few weeks, three people have impressed most of Guernsey’s populace; Deputy St Pier, Deputy Soulsby and Dr Brink. All three of these people have stood out as able leaders and the members of our government have covered themselves with glory for their reliance on Dr Brink’s expertise and advice, as well as allowing an expert in the field to guide their steps. Or at least that is how it seems.
Now we come to the ‘planning for the future stage’ and our team leader says that we must buy ourselves out of the health crisis to avoid recession. This makes sense, but what doesn’t make sense to me is borrowing £500m. We are told we have already spent £1m. from our ‘rainy day fund’, and that makes sense as it is what it is there for, but there is a small detail – why has it diminished so much? Not that it is an important question, but nevertheless it is a question.
A little while ago we borrowed £330m. – as I understand it there is a balance unspent – a few mistakes were made when that amount was negotiated. I believe that a call option was purchased, security against interest rates rising. Sensible – maybe – but a put option was not purchased, that’s the flip side of the same coin, and interest rates have most definitely gone down. That bond is hedged by stringent rules regarding who can call on the money and for what reason, but before borrowing more, why couldn’t the States change the rules? This is, after all, a crisis and the States have done many things recently that no one thought could be done.
So conservatively, and at a guess, we release something like £250m., which we are told is what is needed to get us through the initial lockdown and into renewal.
Whilst realising that the figures quoted are guesses, it would seem that we have sufficient funds available without borrowing more at the moment.
The States have a propensity of spending large amounts of money unwisely; it seems that no job is ever quoted at less than a million, although projects of the same size elsewhere are significantly less expensive. It is also evident that every job the States undertake always costs more than was originally quoted.
We should be in this climate looking to shop smarter, and the deputies should examine every thread of expenditure to ensure it is money well spent on projects that do not go against the will of the people. There should have been a new States in June; this Assembly should be aware that criticism will be harsh if money is spent on unnecessary and unpopular projects.
ROSIE HENDERSON
Ma Carriere,
Le Petit Bouet,
St Peter Port,
GY1 2AN.