Error could delay debate on borrowing
Tuesday 19th May 2009, 2:29PM BST.
NEXT week’s capital prioritisation debate should be delayed because of a £50m. shortfall in figures released by Treasury and Resources, according to Matt Fallaize.
He was due to hold a meeting tonight to outline his group of five’s alternative proposals, but that has been cancelled in light of a significant change to the amount of internal borrowing on offer.
In a letter sent to all deputies, Treasury minister Charles Parkinson, admitted it had ‘inadvertently misled Deputy Fallaize and his supporters’.
‘They relied on a statement contained in my department’s report which is misleading. It stated: “It is estimated that the cash pool could be used to fund projects up to £100m. as there is a need to retain sufficient liquidity within the cash pool for the States and associated entities.” This figure was a loose estimate and not the product of detailed analysis.’
Deputy Fallaize (pictured) said it would be ‘very foolish’ to proceed with the debate at this time.
‘This development speaks to the credibility of their report and my view is that the only honest response from them is to withdraw the report and allow States members time to consider the revised figures.
‘If they don’t, I will lodge a sursis to delay debate,’ he said.
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Unbelievable incompetence.
How long has this debate been going on?
And now, weeks after, they discover a simple arithmetical mistake.
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This is frankly outrageous. If T&R can be so lax with this kind of number then should they be trusted with the rest of the numbers? Why couldn’t one of them have told Fallaize and the other authors of the ‘alternative’ suggestion that there could be ‘misleading’ data?
Another shambles
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Treasury misled others to the tune of £50m.
Are these the people that look after our money,bit scary isnt it.
If you remove two letters from the word misled you get a more approriate word in the form of an anagram.
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Was this 50M loose estimate error an in-house oversight or was it cooked up by T & R’s very expensive consultants ?
Taxi for Mr Parkinson ?
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A number of questions suggst themselves as a consequnce of the extraordinay statement of Deputy Parkinson “They relied on a statement contained in my department’s report which is misleading. It stated: “It is estimated that the cash pool could be used to fund projects up to £100m. as there is a need to retain sufficient liquidity within the cash pool for the States and associated entities.” This figure was a loose estimate and not the product of detailed analysis.’
Was the figure given to Matt Fallaize and the others qualified as being “a loose estimate?
When did T and R discover “statement contained in my department’s report which is misleading”
If the Fallaize report had not been produced would the States still believe it was £50million better off than it really is?
How can T and R and all its expensive civil servants make such an enormous mistake?
What assurances have we that similar loose estimates are not masquerading as fact in other States accounts?
When the two tankers were acquired was the “loose estimated” £50 million included as a credit in the justification for the purchase of the two tankers, giving the misleading impression the States of Guernsey was considerably better off than it really was?
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“How can T and R and all its expensive civil servants make such an enormous mistake? ”
Wel lI tend to live in the real world where people have been known to make mistakes. It may come as a surprise to someone who believes the world is and Isaac Asimov book, where everyone is a perfect droid.
Stephen, time to change your name. Your fake shock at absolutely everything is becoming a bit transparent.
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When the total income of the Sttaes of Guernsey is approximately £300 million, the rainy day fund about £200 million, then £50 million does seem an enormous mistake.
It might be the real world, but does Guernsey have to follow the incompetents of elsewhere?
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People are allowed to make mistakes but this is more than a mistake surely? Is it not gross incompetence for the Treasury staff not to know how much money is in their bank? Surely the starting point of any calculations would have had to start with the balance available?? Listening to an interview on the radio tonight it became obvious that something is amiss. If, as reported, the staff assisted both groups with the facts and figures for their reports, why was Deputy Fallaize’s group given different figures to Deputy Parkinson’s?
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Jackie
How understanding do you think the Income Tax office would be if a company or individual made a “mistake” and understated their income by £50,000,000?
The repeated incompetence of our politicians and civil service is becoming a little tiring to say the least.
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Jackie
Wel lI tend to live in the real world where people have been known to make mistakes.
so do i, in one where time and time again poloticians can`t be trusted.
just a mistake ? i`m not so sure
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Although this is called a “cash pool” is it really cash? I would have thought that this much money would be held as liquid investments rather than cash, in which case it is understandable that the exact figure would not be known until an audit is required – given the way markets have fallen over then last months.
However, it would have been prudent to have pointed out in the report that the estimate was based on a valuation that was out of date.
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It wasn’t strictly income, it was about how it was apportioned. But thinking about it a bit more, yo uare probably right Paul; it does look shoddy.
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“Deputy Fallaize’s group given different figures to Deputy Parkinson’s”
Maybe the same reason lots of people around Mont Cuet were arrested the day before the incinerator announcement. It will soon transpire that we send a lot more rubbish to the tip than we thought. That will kill dead in the water any meaningful opposition to the incinerator.
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Maybe this would be a time for deputy Fallaize to clear up the doubts!
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Let’s get this straight. The issue is not simple arithmetic – it’s about how much of the money in the cash pool is actually available to the States to lend/spend.
It never emerged until too late that Treasury could reliably only part with about £50m of it, faults on both sides i guess. They didn’t tell Fallaize and Co, and they didn’t check either.
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Tucker
Exactly how could Fallaize and Co chsck the figures?
Would they have been given access to all the data?
Surely you ought to be able to trust T and R data?
Seems a bit harsh ascribing blame to Fallaize and Co.
Mind you the fgures bandied about for the proposed waste PFI in disguise scheme vary from £85 million on the CW site to a whopping £135 million on the Radio Guernsey site.
But then what’s £50 million amongst friends!!!
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How many times have we had millions of pounds overruns on projects, or expensive purchases such as aeroplanes or boats have been made without reference to anyone but the unelected elite committee and then we have heard ‘its ok we just found we had xxx millions in the pot we didn’t know about’.
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Well I share Stephen John’s shock at this revelation; except that the revelation is a few facts short of being revealing.
One key fact is: how was the money held. It is really difficult to believe that Treasury could contemplate internal borrowing (potentially of that sum?) without checking that it existed (cash can disappear) and/or checking whether it had attracted interest or charges.
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As I said months ago – there is no money in the pot and I quizzed Fallaize on this very forum.
His maths didn’t add up then and we can now see why.
Guernsey has no money….
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Guardian
Firstly there have been no overspends on capital projects since the machinery of government changes in 2000, all of which bar one (Beau Sejour) were Board of Administration overspends. Aurigny was bought to secure the Gatwick slots which once the Heathrow link went was vital to our economy, the fuel ships were bought to secure the long term delivery of vital fuels to this island and I would suggest that Guernsey would be significantly worse off without either purchase. On your last point members of the Policy Council were elected twice once at the ballot box and again by states members to their respective posts. Last but not least, there is no money MISSING from the cash pool which currently stands at 265 million, there is a disagreement however between a group of deputies and four members of T&R how much would be available for internal borrowing.
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I fear that Deputy Jones, like most deputies, is choosing to ignore what the electorate term as ‘overspends’, i.e. all the ‘shouldn’t have spent’ projects which are needlessly costing the island money.
Perhaps the deputy would also be able to explain why Guernsey’s second tanker, Sarnia Liberty, has been inactive in Liverpool for four months and is therefore not earning any money and also presumably paying mooring fees to the port of Liverpool when it could quite happily lie idle in the Little Russel or St Sampson’s?
Or is there a fear that this would merely serve to demonstrate to the public that the States are indeed wasting the island’s money?
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Deputy Jones
Can you tell us the make up of the £265 million. it would be a great help to know what figures make up th £265 million, especially as there is likely to be an ongoing spat about money – whether we have it or not.
With this information people will be able to make informed decisions on the borrowing issue and others.
Thanks.
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Deputy Jones
Beau Sejour was a capital project – whichever way you choose to dress it up. Overspend was around 15 – 25%.
Other overspends include the Jetty, Prison, Schools and the Airport was a classic.
How you can state that there were no overspends since 2000 is totally beyond me when everything came in way over budget.
The fact is Deputy Jones that in 2001 there was in excess of £830m in the pot, now there is less than £175m. A bit of an oversight if you ask me….
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Stephen
I will ask T&R for a breakdown of the cash pool when I have more time, as I have still a fair bit of work to do for this months States meeting which begins tomorrow.
Darren
You need to read my post again I did not say the BS was not a capital project what I said was all the overspends occurred before 2004 and most of them were Board of Administration projects which included the airport and the new jetty which were both commissioned by the old BOA. As for the schools, I am at a loss to understand which schools you are referring too, If its Le Rondin then that was a question of quality of finish rather than the project being overspent. Is the 830 million you refer too the pension fund? Which of course is different from the capital reserve which has provided quite properly money for capital projects.
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Seems like I may have touched a raw nerve.
It does make you wonder that if borrowing had actually been railroaded through then no one would have actually queried how much was in the pot. It only seems to have become an issue when some of our more sensible deputies would rather spend our own money than borrow it and pay all the associated fees and comissions.
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