Wednesday 05 February 2025
General Update
Madam, It is always an immense privilege to speak within this Chamber, just as it is an immense privilege to hold the roles that we do.
Now, I'd like to think I'm known as an optimist within the Assembly. I never have, and I never will, talk our island down. I have absolute confidence in what we can achieve and absolute belief that we live somewhere truly remarkable. We should never lose sight of this. But, as we all know, there will be some difficult decisions ahead particularly in respect of public finances.
The forecast General Revenue deficit for 2024 remains at approximately £20 million. With year-end processes currently underway, I have asked the Presiding Officer for permission to provide a specific statement on the final 2024 outturn at our meeting of 5 th March but I do not expect any significant movement on this headline figure.
Following this Assembly's decisions through the 2025 Budget not to support a temporary increase in income tax- and therefore generate the surpluses needed to fund our planned capital expenditure - the Committee, as promised, has undertaken a review of the Major Projects Portfolio, and has published a green paper for debate later this month.
As the Assembly will be aware, if we want to deliver the current portfolio as its stands - and we do because we consider all the projects essential - the current portfolio period will need to be extended by at least a year in order to resolve the significant funding gap that exists. This will, however, reduce the funding available to our successors at a time when we already know that we have a legacy of built up investment need. At this stage, we anticipate that the next Assembly will need to consider how to prioritise what may be in excess of £1 billion worth of investment demand within a funding window of about £150 million.
We are taking the steps necessary to progress the practical implementation of a Goods and Service Tax and the other changes to the tax and contributions systems recently agreed by the States. This will stabilise public finances and return to generating surpluses as our predecessors did and that we have relied upon - in order to fund the scale of capital investment needed. Infrastructure investment that will unlock economic growth .
We will also be reporting separately to the Assembly this term in respect of the Alderney Airport runway rehabilitation project following the much publicised cost increases for the project from £24 million to an unaffordable £38 million. The policy letter will look at various options for how the work can continue to be delivered within the original budget. I am aware of the understandable interest, and passion, from our Alderney colleagues on this matter and we look forward to updating them of our developing work at our earliest opportunity. We will need to find a solution that is fair to all.
To turn to wider activity over recent months:
Housing
We have continued to focus on housing supply and affordability. I advised in my September 2024 update that we intended to bring forward proposals to the States regarding Leale's Yard. While it remains the case that the Committee is keen to see Leale's Yard developed, and indeed we have expended significant time and resource in pursuing that aim, this has now become more difficult.
IT is likely that the proposed use of volumetric modular units (a form of off-site construction in which buildings are put together by connecting a series of fairly large pre-built sections, or 'modules') cannot now happen. The issue was the effective withdrawal from the market of the proposed manufacturer. This has had an impact on the scheme's delivery timescales as alternative construction methods now need to be assessed.
Despite efforts, including from myself, in proactively engaging with the parties in order to reach a satisfactory outcome for all, we have not achieved that yet.
So, while we have not given up in our ambition to see the Leale's Yard site developed, we also need to turn our attentions to other development sites that may now be able to deliver housing more quickly and offer better value for money.
Another important workstream is the outcome of the on-going Island Development Plan review focused on housing and employment land. Those revised IDP proposals have now been published by the DPA, and the Committee will continue to take a keen interest.
This Assembly has already agreed to fund the next tranche of work by the Guernsey Development Agency and the Local Planning Brief for the Harbour Action Areas should be considered before the end of this political term.
Nevertheless the Committee is still frustrated that the rate of building has not improved.
However its proposals to build a temporary constructor's village were supported in the 2025 Budget debate and I am pleased to report we are accelerating its procurement.
It will be very important to the Island's housing that the next Assembly establishes a pipeline of funded projects in order that the construction sector can scale up and supplement capacity to meet a steady building programme.
We continue to enhance the digital and technical capabilities of the States of Guernsey, and as a result of funding approved through the 2025 Budget were able to implement a new operating model with effect from the 1 st January. We know how important IT services are, and so we have invested heavily in recent years to improve our IT maturity, our IT resilience, and our vendor management.
As recognised in the recently published Scrutiny Management Committee Report, there were challenges in the early days of the current contract.
Challenges which, under the leadership of the current Head of the Public Service, we've sought to address over recent years.
IT is a fast moving science and we have to respond accordingly to areas of concern - for example the SoG has recently banned the use of DeepSeek - the Chinese Artificial Intelligence tool - corporately. This is just one example of the types of issues faced. We continue to monitor and review risks, and act speedily as required.
We are keen to announce soon the solution direction and implementation partner for MyGov , negotiations are currently ongoing. This will provide the foundation for more secure and improved digital services. Our digital transformation is shaping well under the Chief Digital and Information Officer and, together with the technology transformation, this will be a continuous journey of innovation to provide better services to the residents of the Bailiwick.
Government Work Plan
We have been working with colleagues across Committees to ensure that the incoming Assembly has a comprehensive understanding of the work underway across the three Strategic Portfolios under the Government Work Plan and across the Committees. This handover will help the new Assembly to understand the issues behind those workstreams underway but not concluded this term. We've been grateful for the Committees' comprehensive responses and will be making arrangements to publish.
External Relations
In my September update statement for the Assembly, I mentioned that there had been significant political changes in Westminster following their General election in July. Work with the new UK Government has started positively - and we are developing new and existing relationships across the political spectrum through engagement including:
attending three UK Party Conferences in the autumn; various follow-up meetings; and hosting a three-day visit to the Bailiwick by Lord Ponsonby, the Ministry of Justice Minister with responsibility for the UK Government's relationship with the Crown Dependencies.
I was also pleased to meet the UK's Prime Minister in December 2024, together with the Chief Ministers of Jersey and the Isle of Man, to discuss the Crown Dependencies' economic value to the UK, trade relationships and energy. It was a positive meeting and I hope it will set the tone for future engagement.
An earlier version of the Policy & Resources Committee recommended to the States in December 2021 that Committees include in general update statements any significant developments for international agreements which have been extended to Guernsey.
In that context, I advise that the CPTPP (the Comprehensive and Progressive Trans-Pacific Partnership) free trade agreement came into effect for the UK and the Bailiwick on 15 December 2024.
For the Bailiwick, the terms for trade in goods apply now, with certain fair competition chapters coming into effect after a two-year period. This means that Bailiwick businesses exporting goods to other CPTPP countries benefit from preferential tariffs and Guernsey will apply such tariffs on a reciprocal basis.
Guernsey has a clear pathway and mechanism, contained within the legal text, to be included in the sections of the agreement about trade in services and investment which will ensure further benefits to Guernsey businesses - and that is the subject of ongoing discussions with the UK.
Fundamental Services Review
It is a fact that the States spend less per capita on delivering public services than most other jurisdictions, despite our lack of economies of scale. But the Committee understands concerns regarding the growth in public sector services.
We must have confidence that the right services are being delivered and that they represent value for money, and for this reason, through the Major Projects Portfolio Review Green paper, we are advising of a Fundamental Services Review, which will be undertaken in close collaboration with Committees.
Public Service
However, while it is right and appropriate for this Assembly to concern itself with what services are delivered and their overall efficiency and impact, I think we would all acknowledge that during the course of this term, there have been occasions where comments made inside, or outside, this Assembly in relation to the public service and its performance have been ill-informed, inaccurate and fundamentally unhelpful and damaging to both morale and recruitment. No organisation is perfect; not this Assembly nor the public service, but we need to remember the attention that our comments attract and the impact that they can have on our community.
I continue to see each and every day, exceptional commitment and performance from across the public service.
Just recently Deputy Prow and I were delighted to personally thank such a group of staff for their contribution to the recent MoneyVal assessment; just one of the hundreds of initiatives under way throughout the States' public sector. I want to express those thanks again to everyone involved.
I am optimistic that when the MoneyVal report is issued in the days ahead, that the officers' skill and expertise are rewarded with a positive report. It cannot be underestimated how significant this report is, how much effort has been put into it, nor how much the Finance Sector, and therefore the Island, will benefit from a positive outcome.
At this stage of acknowledging the valuable work done by the Public Sector, it would also be remiss of me not to mention Mark de Garis; the outgoing Head of the Public Service. He retires shortly after 40 years of exceptional public service to our community. His contribution to the work of the States has been significant, and I hope the whole Assembly joins with me in wishing him well for the future.
In a similar vein, we have been delighted to welcome his successor, Boley Smillie, who was appointed after a highly competitive recruitment process.
Madam, let me close by returning to my opening message.
It is a privilege to sit in this Assembly, and to have the opportunity to make decisions that will influence our island for potentially generations to come. Having recently had opportunity to participate in SACC's ongoing course for prospective candidates, I would encourage anyone who is passionate about our island and its future to take the same leap of faith that I did some years ago. It has been the most wonderful, the most rewarding and the most challenging opportunity of my lifetime.
I remain deeply grateful for the opportunity to serve as Chief Minister for a second time and look forward to answering any questions.