Sir
I am pleased to provide Members with an update on the work of the Scrutiny Management Committee over the first six months of this term, and to outline how the SMC intends to approach its work going forward.
The SMC was not fully constituted until mid-September, meaning this is closer to a four-month review. An open recruitment process in the summer attracted just under forty applicants, enabling the appointment of non-States members of very high professional standing, whose contribution is already strengthening both the SMC and the Public Accounts Sub-Committee.
The purpose and value of scrutiny
In my opinion, scrutiny exists to improve the quality of policy, governance, accountability and outcomes, and to ensure that public resources are being used effectively and for their intended purpose.
Whilst some scrutiny will inevitably be retrospective, I believe it can also add value when policy is being developed. At its best, scrutiny acts as a form of institutional disinfectant — improving transparency, testing assumptions, and strengthening proposals before final decisions are taken.
That function is particularly important in a small jurisdiction, where institutional closeness and time pressure can crowd out legitimate challenge, increasing the risk of unclear accountability and insufficiently tested decisions whose costs and long-term implications are not fully understood.
Pre-decision scrutiny and the Government Work Programme
Early in the term, the SMC wrote to all Principal Committees proposing a practical and proportionate approach to pre-decision scrutiny. The response we received, via Policy & Resources, was in effect a polite refusal.
While Policy & Resources has an important coordination role, I was not persuaded that acting as a gatekeeper to that engagement added value. It was also, in my opinion, a missed opportunity.
The SMC has a right to comment on policy letters, and it is a right we will continue to exercise wherever timescales allow. That right is meaningful only where policy development is sufficiently mature and policy letters are not rushed – I want to say bounced - through at speed. When policy development is rushed, it is usually for a reason — and often at the expense of proper assessment of costs, risks and alternative options.
This week’s policy letter on the Government Work Plan is a case in point. It was progressed rapidly and expressly records that scrutiny was excluded from discussions. That omission arguably contributed to the surreal situation in which the President of P&R is seconding amendments to their own Committee’s policy letter — a scenario that earlier scrutiny, including assessment of impacts on economic growth and competitiveness, might reasonably have helped to avoid.
The Government Work Programme remains a candidate for future scrutiny work. Our interest is straightforward: to examine it through a cost-benefit lens, including administrative and opportunity costs, and whether outcomes are proportionate to the scale of effort and resource involved.
Exercising scrutiny’s formal role
Where the SMC has been afforded the opportunity to engage properly, we believe it has added value.
The Public Accounts Sub-Committee reported on both the Budget and the Fiscal Framework, with letters of comment lodged by the SMC. In each case, the Committee’s analysis was placed on the public record to inform debate and improve transparency around fiscal assumptions, risks and sustainability. It is worth noting that P&R’s response to our comments on the Budget broadly accepted and substantively agreed with our points.
At present, however, the Public Accounts function exists only as a sub-committee of the SMC. There is a strong case for strengthening its constitutional position and mandate, thereby improving the overall architecture of financial oversight and accountability. These issues — including the potential role of an Auditor General — are under active consideration, and we would welcome engagement from Members interested in progressing that discussion. Indeed, it would be remiss not to note following media reports of a potential requete from Deputy Rochester on the topic of an Auditor General, and the Committee would like to extend an invitation to her to assist our work in this area.
States Property Unit and asset governance
The SMC has devoted significant time to reviewing the operation of the States Property Unit, including a public hearing examining its governance, performance and approach to managing the public estate. It is important to note that this review is ongoing. We have submitted various supplemental questions to P&R on 16 December and have been advised that responses will be provided by 20th February. We recognise that there are many competing demands on their time, but this pace does make progress challenging.
What became clear at an early stage is that the Unit operates without a meaningful performance framework. There are no clearly defined KPIs, no systematic tracking of performance against objectives, and no robust means of demonstrating whether claimed efficiencies are real or sustained.
This is not merely technical: efficiencies have been claimed but not evidenced - a point picked up by Internal Audit, and seemingly ignored, several years ago - while spending has continued to grow — over the last two years at approximately nine per cent per annum — without demonstrable improvements in transparency or outcomes.
The absence of an internal charging model and clearly defined service levels further complicates accountability. While collaboration is important, the lack of transparent cost attribution and performance expectations makes it materially more difficult to manage demand or evaluate service effectiveness.
What was striking to the SMC was the early political reflex to defend the Unit rather than allow scrutiny to perform its proper function. That instinct to close ranks, rather than to welcome challenge, is a cultural issue, not a personal one.
The initial assessment of the handling of Leale’s Yard illustrates many of these wider concerns. Evidence provided to the Committee indicated that there was no substantive business case, no five-case business model, no whole-of-life cost assessment, and no clear evaluation of contingent liabilities or the full investment envelope required. The SMC continues to examine how and why the approach shifted from a proposed private-sector partnership model to a direct public-sector acquisition without a transparent assessment of alternatives. We plan to report in quarter two.
Completing previous committee work
There are a small number of areas where the Committee is seeking to complete work initiated in the previous term. One such area is recruitment and retention in the public sector, where progress has been hampered by limitations in data availability and quality.
More broadly, the lack of timely and reliable economic data is no longer acceptable. We do not have up-to-date GDP data, nor a clear picture of productivity or labour-market dynamics. This materially weakens policymaking, scrutiny and accountability alike.
Investment governance review
The Committee is also seeking to conclude the investment governance review. That work has been broken down into a number of defined questions and strands, and we aim to complete it later this year.
Freedom of Information and transparency
I wish to highlight an important piece of work that the SMC will shortly bring before this Assembly.
In 2021, the Assembly resolved not to introduce a full Freedom of Information law, but instead to strengthen the existing Code of Practice by establishing an independent Freedom of Information Appeals Panel. Experience since then has exposed a material weakness in the current arrangements: an appeals mechanism that lacks the power to enforce its determinations.
In a small but significant number of cases, determinations to release information have not been complied with, not due to any lack of independence or rigour on the part of the Panel, but because it lacks the power to compel compliance.
The SMC will therefore bring a policy letter to the States in quarter two proposing limited, proportionate and clearly defined additional powers for the Appeals Panel to compel compliance, with appropriate rights of appeal to the Royal Court. Genuine transparency cannot rely on goodwill alone.
Forward work programme and priorities
Looking ahead, the SMC has a substantial and carefully prioritised work programme.
A key area of future focus will be Corporate Services. Centralisation was justified on the basis that it would deliver efficiency and cost control, yet budgets continue to grow year on year. We will examine whether real value is genuinely being delivered, or whether increased scale has displaced meaningful accountability.
The SMC also expects in 2026 to give consideration to the governance, funding and accountability of certain third-party bodies that receive significant public or licence-payer funding, including whether performance expectations are clearly defined and outcomes properly monitored.
We also intend to make greater use of public hearings, including on the Finance and Investment Plan and through more deliberate alignment of PASC hearings with the Budget and annual accounts. Our next planned public hearing, now that consultation has commenced, will focus on the corporate tax review in the first quarter of 2026.
Health and Social Care is also on our radar, particularly the governance of capital expenditure relating to the Our Hospital Modernisation programme, where we are in discussion with HSC about how best to take that forward, and I take the opportunity to note that the SMC has an interest in the review of longer-term health funding.
Housing was, for many, the number one issue on the doorstep during the election. This term has seen the creation of a new department, and we have this week heard the President’s view that the States should itself build social housing once more. The Committee considers that the underlying policy thinking in this area warrants further examination, and we hope to hold a hearing in the coming months.
The SMC maintains a watching brief on the governance of the IT review, where repeated requests for terms of reference and governance arrangements have not been met. However, I am pleased to report that on Monday, the SMC finally received the Terms of Reference for the Leale’s Yard Political Oversight Group, following repeated requests.
Those Terms of Reference are labelled “confidential”, which is difficult to justify given their largely procedural nature and reflects a default tendency to restrict information rather than publish it. More substantively, they offer limited clarity on decision-making authority, accountability, escalation, or how costs, risks and delivery options are to be robustly tested.
The SMC will now examine these arrangements carefully and report further to the Assembly in due course.
We have also written to P&R outlining concerns with Pillar Two implementation and related accountability issues, including the treatment of temporary revenues as permanent, assumptions about collection, and potential impacts on the wider economy. We still await a response.
Conclusion
Members should be aware that the SMC is consistently inundated with requests for action. We turn down more work than we take on, recognising finite capacity and the need to focus where scrutiny can add the greatest value.
Scrutiny is not opposition by another name. It is an essential component of good governance.
Across multiple areas, scrutiny has encountered an authoritative, bureaucratic and statist culture. Too often, producer rather than public interests dominate — where what is best for an organisation is assumed to be what is best for Guernsey – which is a culture we need to rectify.
Across its work, the SMC will continue to focus on evidence, proportionality, accountability and outcomes for the public, rather than the convenience of institutions.
Where scrutiny is engaged with constructively, it strengthens policy, improves governance and builds public confidence. That is the spirit in which we will continue our work.