EARLY in the new year, States members will be faced with a report that sets out the hundreds of millions of pounds that the island needs to spend – some in short order simply to keep the airport operational – over the next few years.
These projects include a new school and improving mental health facilities and, because public finances are tight, members will have to decide what is the top priority and what will be done when funds allow. It will be a difficult debate because while keeping open the ports clearly has to take precedence, schools and health facilities win the emotional argument every time.
That is one reason the States will be asked to consider borrowing money against the income-producing assets of the harbours and the airport, which last year made a surplus of £1.552m. before depreciation charges in excess of that sum.
The forthcoming report will make it clear whether the near £100m. cost of the runway work can be entirely funded on that basis or whether additional money will need to be raised. Guernsey Water, for instance is sitting on a cash pile of nearly £40m. and made a surplus last year of £4.3m. and so, on paper at least, is a public asset that could be ’sweated’ for the benefit of essential community infrastructure projects.
What is perhaps surprising is that the States has not turned to islanders to help raise money. Not by yet further tax increases – and Friday’s Budget will reveal whether the Treasury minister has any unpleasant surprises in store – but by encouraging people to invest in their own island.
With the current nervousness about the banking system, millions of pounds have been pouring into UK Government-backed National Savings and Investments products and, while these are available through local post offices, there is no equivalent Guernsey product. Balancing security against a realistic rate of return and knowing that their money was helping to fund local schools or hospitals or other essential projects would appeal to many islanders and, properly set up, would attract millions of pounds-worth of investment.
There are, after all, more than £5bn-worth of purely local savings in island banks and just a fraction of that in a Guernsey Savings Bond would be a big Treasury boost.
Saving – for the benefit of the island
EARLY in the new year, States members will be faced with a report that sets out the hundreds of millions of pounds that the island needs to spend – some in short order simply to keep the airport operational – over the next few years.
These projects include a new school and improving mental health facilities and, because public finances are tight, members will have to decide what is the top priority and what will be done when funds allow. It will be a difficult debate because while keeping open the ports clearly has to take precedence, schools and health facilities win the emotional argument every time.
That is one reason the States will be asked to consider borrowing money against the income-producing assets of the harbours and the airport, which last year made a surplus of £1.552m. before depreciation charges in excess of that sum.
The forthcoming report will make it clear whether the near £100m. cost of the runway work can be entirely funded on that basis or whether additional money will need to be raised. Guernsey Water, for instance is sitting on a cash pile of nearly £40m. and made a surplus last year of £4.3m. and so, on paper at least, is a public asset that could be ’sweated’ for the benefit of essential community infrastructure projects.
What is perhaps surprising is that the States has not turned to islanders to help raise money. Not by yet further tax increases – and Friday’s Budget will reveal whether the Treasury minister has any unpleasant surprises in store – but by encouraging people to invest in their own island.
With the current nervousness about the banking system, millions of pounds have been pouring into UK Government-backed National Savings and Investments products and, while these are available through local post offices, there is no equivalent Guernsey product. Balancing security against a realistic rate of return and knowing that their money was helping to fund local schools or hospitals or other essential projects would appeal to many islanders and, properly set up, would attract millions of pounds-worth of investment.
There are, after all, more than £5bn-worth of purely local savings in island banks and just a fraction of that in a Guernsey Savings Bond would be a big Treasury boost.
Article posted on 5th November, 2008 - 3.37pm