Colossally bad news followed by the finest debate in years

The misery that day was meant to belong to Rachel Reeves. She tried her best, raising taxes, lowering growth forecasts, and telling the nation that its longest economic slump in probably 200 years would last into the 2030s.

But in our lives these days nobody, and certainly not a mere Chancellor of the Exchequer, is allowed to upstage Gavin St Pier.

With her treasury lead facing the risk of not dominating the headlines for half a day, Policy & Resources president Lindsay de Sausmarez kindly retreated and allowed him to announce her committee’s bad news.

And it was colossally bad. It started with an admission that the pace of tax assessments had returned to a slow crawl, and that taxpayers had very recently received odious threats of large fines if they failed to submit their returns by a date the Revenue Service knew its wretched new IT system couldn’t handle, but that was the least of it.

Frankly, we already knew that system had made things worse, but we learned that this little misadventure had cost taxpayers £24m. Next we were told that MyGov, another botched IT project, this one aimed at centralising customer services, had cost us £18m. and delivered the square root of sod all.

At the same time, an electronic system for patients’ health records was £5m. over budget and more than 18 months late, and a new £34m. clinical block at the Princess Elizabeth Hospital scheduled to open last year remained in such a state that it may still have no patients this time next year.

Nearly all of this money was spent in the past five years. Deputy St Pier did his best to seem sad that the previous States, which left him languishing on the ‘backbenches’ out of spite, had made such a grotesque mess of managing major IT and building projects.

He even invited the possibility that last term’s political leaders, as well as falling asleep at the wheel, may have been kept in the dark by their officials. None of Deputy St Pier’s colleagues found an inventive way of questioning whether any of the tens of millions of pounds were poured down the drain as an inevitable consequence of how the projects were set up in the first place, when he was P&R president, of course.

Deputy St Pier called the mismanaged IT projects ‘an unconscionable waste of public money’. The numbers involved are eye-watering. A few years ago a failed IT system in the National Health Service cost £11bn. It was described by the Public Accounts Committee as one of the ‘worst and most expensive contracting fiascos’ ever in the public sector. But that £11bn. was a mere bagatelle compared to the scale of waste revealed by P&R last week. The NHS debacle cost every person in the UK £170; the Revenue Service system and MyGov cost each of us £650.

When I was first thinking of entering politics, in the mid-2000s, voters’ greatest criticism of the States was mismanaging construction projects. Beau Sejour went £2m. over budget, the airport terminal £7m., the New Jetty £11m., and all were much delayed, too. That was not far off £40m. at today’s values, on merely three overspends, and there were others. The generation of States members of which I was a part broke the overspending habit, delivering numerous construction projects on budget and on time, including four schemes worth a quarter of a billion pounds at today’s values – the airport runway, Les Beaucamps School, a mental health centre at the Oberlands, and wastewater disposal facilities at Belle Greve.

Our biggest weaknesses – which were serious, to be sure – were sailing too close to austerity in revenue and capital spending, and a well-earned reputation for flip-flopping: there was paid parking, waste disposal, school buildings, transport taxes, the electoral system, milk licensing, and so on.

The States is now in a different era again, one seemingly marked by an alarming combination of incompetence and negligence outside of day-to-day operations, and there may well be more damning discoveries to follow the Revenue Service, health records and MyGov IT projects.

Boley Smillie is astonished most of all by the last of those three, which was essentially closed more than a year before he took over as the States’ chief executive. He said there was ‘literally nothing to show’ for the £18m. spent. He is open to a range of explanations, from MyGov having provided benefits which for now remain well-hidden to malfeasance. That he can’t rule out the latter indicates how badly things have gone wrong.

Cometh the hour, cometh the man. I certainly can’t recall a senior civil servant ever being as widely admired or liked as Mr Smillie. Timing and circumstances mean he will never be in a stronger position than he is today. His experience and temperament, together with the way the cards fell at this year’s general election, give him a better chance than anyone at any time of making the public sector fitter for purpose, in particular so it can adequately run large-scale IT and other complex change projects.

There lurk perils all around him. He is now six weeks away from his first anniversary in the role. He has so far had the great advantage of distance, being able to diagnose problems caused by others, but that period will soon be over. He could suffer from expectations of him being higher than one person could possibly meet.

P&R needs to guard against that by discouraging a ‘back Boley or bust’ culture of the type which may have contributed to the extraordinary failures revealed last week. Like anyone in his position, he will succeed only if he has a senior team, at political and staff level, with the right combination of expertise, integrity and courage. Which speaks to his single biggest risk for the foreseeable future: the system turning against him, if senior colleagues feel threatened by scrutiny of previous errors or if influential voices become too defensive in the face of adversity or reform.

The senior committee itself, P&R, is in no imminent danger. Its announcement last week, as well as being admirably transparent, was good politics, made at just the time when it knew enough to reveal the scale of failure but before it could be blamed for most of it. Unlike in the previous two political terms, the top bench in the States chamber – the leadership team, effectively – is more experienced and astute than those who would need to replace them if they fell.

The big foreseeable political consequence of the wasted £42m., and anything more along the same lines which P&R is now duty bound to reveal, could be known next summer, when the senior committee tries to get its flagship tax and spending package through the States. Almost none of the five members of P&R have shown as much commitment to large tax rises as their two predecessor committees, and the scale of waste now uncovered will inevitably strengthen the hand of those determined to defeat a goods and services tax especially.

On that front, so much now depends on the treasury lead and whether he ultimately backs GST, company tax reform, a combination of the two, or neither. His critics’ hopes that he would be weakened by a code of conduct recommendation to suspend him were dashed last week, the day after his announcement about the wasted £42m., when the States threw out the recommendation and, by intimation, the standards commissioner who made it.

The principles and ethics of that case seemed to me to divide public opinion roughly along the same lines as opinion in the States – in other words, two-thirds, one-third. Politically, the whole case has strengthened Deputy St Pier’s position, both in his campaign to reform the complaints process and wider culture in our health service, and as P&R vice-president and treasury lead.

In the States debate, speeches in favour of suspending him boiled down to upholding the weight of the members’ code of conduct and supporting the standing of standards commissioner Dr Melissa McCullough. These were good points, well made. The silliest argument was that Guernsey’s reputation would be damaged by rejecting an independent official’s recommendation. Really? Days after Guernsey Finance made national headlines for reasons far removed from promoting the industry, at the same States meeting as malfeasance could not be ruled out of at least part of the £42m. waste scandal, and days before one of the island’s longest-serving deputies and the best known outside of the island returns to court to face a raft of extremely serious charges. The island’s reputation is speciously held to be at stake far too often in States debates.

Some elements of Deputy St Pier’s campaign of recent years have left him open to criticism. But this case against him fell apart because the standards commissioner didn’t present States members with strong enough evidence that he misled a national journalist or damaged the reputation of the complainant to justify suspending him.

The debate, though unfortunate in many ways, had two beneficial effects. First, it ended up giving a stronger voice to an increasing number of families who came forward with distressing experiences of health services and to press for reform.

Second, it provided the States Assembly with an opportunity to break from its predecessor and debate such an issue in a respectful, measured and serious tone, and it passed that test with flying colours.