I have a number of takeaways from P&R’s proposed capital programme for the ‘25-’29 political term, due to be debated by the States shortly. Some of them relate to one of my old departments.
Happily there now appears to be a real desire to move the dairy project forward in two different ways.
Firstly there’s a proposal to spend £6m. in modernising some of the archaic equipment within the existing building. This really is vital. It is a testament to the skills and tenacity of the dairy team that there has been no significant disruption to milk processing over the years, despite them using some kit which is well beyond its normal working life. If there was a major disruption it would be a disaster on several fronts. Financially, the dairy would be faced with buying milk it couldn’t then sell on. Environmentally, there would be the issue of disposing of that milk. Culturally, it would mean having to import inferior milk to tide the island over. And could that genie really be put back in its bottle? We really don’t want to see it.
Just as encouragingly there also appears to be far more willingness to see a new States Dairy become a reality than existed in the last Assembly. It’s true that the project remains in the ‘pipeline’ category, but it’s been identified as one of two such projects to be worked up in order to move into the ‘delivery’ list.
A new, more ergonomic dairy would deliver massive efficiency savings, but viewed on a purely commercial basis the project still really doesn’t stack up. The small scale and high costs of the whole dairy industry in Guernsey, including the States Dairy, mean there really is no financial business case for it to continue. Which is exactly why it is going to need taxpayer funds to move forward.
Wasteful public spending? I don’t think so. Just think about what we would lose if it didn’t go ahead. Guernsey milk and dairy products, our traditional countryside, the iconic Guernsey cow. Completely unthinkable. The island would lose a part of its soul. Anybody who wants to throw away all of that knows – to quote Oscar Wilde – ‘the price of everything and the value of nothing’. Talking of things which won’t pay for themselves, it has been flagged up publicly for the first time that replacing the gates on the QEII marina will require a blended funding arrangement. The idea is that half of the money will come from a loan taken out by Guernsey Ports, while the other half will come from the taxpayer.
Is this right and fair? Let’s take a step back. At the time that the QEII marina was first built, all of the funding for such large harbour infrastructure projects came from general revenue. With perhaps a contribution from the ports holding account. Time has moved on and these days the idea is that the ports should be run commercially and wean themselves off taxpayers’ money.
In respect of minor to medium scale capital investment that has indeed happened. At least at the harbour. The airport is another story. But it’s clear the transition hasn’t been successful enough to allow all of the really big harbour investments to be funded out of cash flow.
So what sort of things might still require some taxpayer funding? Maybe replacement ro-ro ramps? Fair enough in some ways, because everybody in Guernsey benefits from them. Perhaps a pool marina? This can probably be justified on the basis that it would boost the wider economy. But the taxpayer having to stump up for maintaining pleasure berths? Really?
The first thing to say is that it has to happen. It clearly can’t be funded any other way and the prospect of the gates failing is too horrible to think about. But should such projects rely on the Guernsey taxpayer or instead be funded by the end user? Ideally the latter but there are some extenuating circumstances here. Not least the fact that the reserves which the ports had built up for projects such as this were wholly wiped out during the Covid lockdowns.
What the proposal does do though is show how misplaced claims by some boat owners are that their fees are excessive, to the point of creating surpluses used by Guernsey Ports to subsidise the airport. The harbour does indeed make a reasonable revenue surplus, but it is clearly not large enough to even fully fund its own capital requirements, let alone cross-subsidise anywhere else. Yes the airport is currently subsidised, but that subsidy comes from the taxpayer, not boat owners.
Moving on to Alderney airport. We all know that the States recently approved up to £24m. to be spent on reconstructing the runway. Where that figure came from, heavens knows. It doesn’t seem to relate to any sort of quote for the work, let alone a proper tender. But I suppose the general reaction was one of relief that it seemed to be significantly lower than some of the figures bandied about over recent years.
But hold hard because there is almost certainly more expenditure on the airport coming down the line. Three projects are currently being examined. A replacement terminal, a replacement fire station and a replacement control tower. The first two of which were included in the previous runway scheme.
Are they all essential? Well the terminal could probably limp on for a few more years now that there will be no increase in the size of planes using the airport. But, fond though many of us are of this venerable facility, it’s clear that any savings made by not replacing it yet will be relatively short term.
The new fire station I think is unavoidable as the current building has structural issues. The same is true of the control tower, but there are options to be examined here. One is obviously a like-for-like replacement, but another might be a (London City style) remote air traffic control set up. Whatever the chosen way forward is it will still come at a cost. So it remains far from certain that the bailiwick taxpayers will get away with spending less than £30m. on Alderney airport over the next few years.
