Wednesday 04 September 2024
General Update
Madam
I consider it a privilege as President of the Policy & Resources Committee to provide this general update.
I referred in my last update to the importance of our ongoing engagement with UK parliamentarians and the rest of the world which as an independent jurisdiction drives much of the work of the Committees of the States that is unseen by many in our community. I shall begin with our work in maintaining and developing these relationships before returning to domestic priorities.
External Relations
Following July's General Election in the UK, there have been significant changes in Westminster. Not only has the political party in power changed, but there are also many new MPs (335 of them became MPs for the first time).
We are now preparing for political representatives from Guernsey to attend the UK Party Conferences for the Labour, Conservative and Liberal Democrats in the coming weeks to continue to build relationships with the new intake of MPs and the new Government. It was encouraging in this regard to read that the Labour Party manifesto included reference to defending the sovereignty and right to self-determination of the Crown Dependencies.
I was delighted that Guernsey welcomed King Charles III and Queen Camilla on 16 July. The visit highlighted the special and historic relationship between the Bailiwick and the Crown which stretches back centuries and it underlined the autonomy of the islands, separate from the UK. Islanders provided a very warm Guernsey welcome and showed the Island at its best.
It also provided an opportunity for fantastic coverage of the visit and the islands in national media including the Royal's own social media platforms - and I note that Her Majesty also used a photo taken here for her birthday message. I also celebrated a significant birthday the day after the visit - some people need to wait until they are 100 before they are wished a happy birthday from the monarch but mine came 40 years early and from not one but two majesties!
Currently the Committee is gearing up to welcome government representatives from the UK and from other jurisdictions in Europe and further afield in the coming weeks and months. We were also pleased to host the French Ambassador in June this year, to attend the annual summits with Brittany, and to welcome the Olympic Torch to Hauteville House in July. That has all contributed to strengthening our relationship with France through discussing economic and cultural ties as near neighbours.
In March we were in the final preparation for the on-island element of the MoneyVal assessment. This was concluded in April. I would like to take this opportunity in this States Meeting - and thus on the public record - to again thank the Committee for Home Affairs and everyone in the Bailiwick who was involved in preparing for the assessment and contributing to the assessment. We had positive and productive engagement with the evaluators whilst they were here and, as is usual, that is continuing. The final report is expected to be published in early 2025.
I would also like to mention at this point the BEM awarded earlier this year to the Director of International Relations and Constitutional Affairs. Well done!
Domestic Pressures and Priorities
Having begun this statement looking at our relationships with the wider world, I now want to focus on our domestic agenda.
Alderney and Sark continue to be an important part of the Bailiwick family. It is vital that areas of mutual interest and shared concern continue to be discussed to benefit all of our islands, and I was fortunate enough to hold productive discussions just this past month with representatives in Sark.
Given the Committee's responsibility for managing the 1948 Agreement, it is currently in ongoing discussions with the States of Alderney regarding options for Alderney to contribute financially to the rehabilitation of its runway in addition to the terminal. It is clear that Option C+, as currently scoped, is not viable and totally unaffordable. Before the end of this term, the States of Deliberation will be presented with proposals to maintain a suitable provision within the project's approved budget envelope, however it is highly unlikely that this solution will be of the scale of the original proposals.
Understandably, our colleagues from Alderney will be disappointed by this, however they will recognise that it is the duty of the Committee to assess each funding request objectively to ensure taxpayers receive value for money - and we are thankful to the States of Alderney for their continued engagement. This is now a prioritised piece of cross-committee work to ensure that the airport continues to operate safely, and that the obligations of the 1948 Agreement are met.
Financial Position
The Committee monitors the States' financial position throughout the year and I wish to draw to the attention of the States that 2024 is proving to be a difficult year financially. Committees have already been made aware of this by way of a letter from me when I shared the forecast position and that the Budget Reserve had already been exhausted.
I will be making a more detailed statement on the overall position at the end of the month using the very latest financial information. This will ensure the States are fully up to speed ahead of the Budget Report being published in early October.
However, at this point I should also alert the Assembly that there has been one recent event which has had a material negative impact on the 2024 position. Whilst previous discussions with the banking sector highlighted that it was expecting improving profits in 2023 (largely due to the rapid increase in interest rates), there has been a material downward adjustment required to both the 2023 and 2024 interim assessments for one bank. This has had a combined material negative impact in States' finances on the 2024 position of nearly £16m. This could not have been reasonably foreseen.
Strategic policy development and co-ordination
The Committee has a range of responsibilities centred on facilitating and co-ordinating policy development. The States have resolved three strategic portfolios in the Government Work Plan and we will report more fully on these in our policy letter during Q1 next year. Nevertheless I would like to focus this Assembly now on the work ahead of it in the next eight months to hand over a programme of optimism and hope to the community.
And, I would like to stress that we have to make decisions because our work is just the start; some of these decisions are highly strategic in nature and will take many years and multiple future political terms to see through to completion, but they are decisions we must make to set the necessary work in action. Such decisions are key to the provision of more affordable housing.
Mitigating flood risks has always been understood as a key enabler for the regeneration of the Bridge and wider St Sampson's area and has featured in the States' pipeline infrastructure programme for several political terms.
Phasing this work will present a significant multi-term investment and carefully planned could present considerable opportunity when aligned with other strategic work such as the regeneration of the Bridge and harbours.
The Harbour Action Areas Local Planning Brief will be published in the coming weeks and will include a report that refreshes proposals for the wider east coast area based on the work of Royal Haskoning Flood Studies, which was considered by the States in 2013.
While the report will further highlight the challenges acknowledged by successive States Assemblies, it is important to remember that work is already in train to address them. For example, enabling protection measures for the well-recognised vulnerabilities of the Bridge area.
Moving on to housing supply and affordability, the Committee is looking to bring proposals to the States as soon as possible regarding Leale's Yard. There are a range of technical matters which need to be worked through and addressed by the developer and proposed manufacturer of the apartments. We are reliant on them to provide this information to move this forward and are doing all we can to ensure that this information is available as quickly as possible.
The States have, in parallel, commissioned independent valuations of the individual apartments and the proposed investment purchase in full. This will help inform the negotiation and agreement of a final price. Discussions have taken place to progress the full range of commercial matters (such as warranties and guarantees, parking provision, payment profiles, and so on). The purchase price remains to be negotiated. I cannot say more at this stage for normal commercial reasons.
Housing remains the immediate top domestic priority and we are primarily directing our resources on those land areas already identified for housing allocation to push forward the build programme.
The Committee responded to the Development & Planning Authority's proposals to amend the Island Development Plan by considering how best to utilise land already owned by the States both for homes and associated employment industries.
There are many factors and interdependencies in play to ensure enough homes for islanders. There is not one single solution and this is why the Committee has supported and resourced with staff the approach established by the Committee for the Environment & Infrastructure through the Guernsey Housing Plan. It is pleased to see this work is now subject to its first annual report and policy letters on specific elements will follow, however implementation of the various levers will take further time.
As an example of how the Policy & Resources Committee is working to make a difference, the construction sector has for some time noted a lack of suitable staff accommodation as a significant challenge for the industry. The States Property Unit (SPU) has been working with States Procurement to develop the concept of a contractors' village, as was successfully delivered for the airport works. This village, or even villages, would provide much needed temporary contractor accommodation to help assist with the States of Guernsey capital delivery programmes. A shortlist of suppliers has been identified and work is ongoing to develop proposals, costs and timescales for a number of sites which the Committee hopes to consider soon.
The Committee is determined to continue to future proof the digital and technical capabilities of the States of Guernsey, which will feature within the corporate 2025 budget submission.
Madam, let me close by reflecting on the unique insight I have across many areas of government by virtue of my position as President of the Policy & Resources Committee. Yes, we have many difficulties, but these are not unique to our shore. In some places the demographic pressures are already far more severe - a warning perhaps of what we could face if we aren't smart, and don't take these issues seriously. But the pressures we are feeling are international trends and that is important.
I have huge confidence in this jurisdiction, in the ability of Guernsey people to meet any challenge just as we have over our recent past with 0-10. Our economy bounced back from COVID more strongly than many predicted. GDP per capita is £52,761 - 50% higher than in the UK. Added to this we have very little in terms of 'national debt'- estimated at less than 9% of GDP for 2024 - and what we have is responsibly structured.
We continue to have an extremely low tax base. Someone on median earnings pays just £8,000 a year in taxes and contributions. We tax our population, relatively, less than the UK, France, Jersey or the Isle of Man.
So, in summary, despite local challenges, regional challenges and global challenges we are nonetheless in about as strong a position as any small jurisdiction could hope to be in. But be in no doubt, these are some of the most difficult times we have faced in recent memory and now is the time our Island needs us, as their representatives, to make the hard decisions for our future prosperity.
Madam, I am grateful for the opportunity to make this statement and look forward to answering any questions.