The Corporate Services Scrutiny Panel has lodged an amendment to the Future Hospital Funding Strategy which is due to be debated by the States Assembly on 18th of April.
The Amendment proposes that the new hospital is funded by utilising the Strategic Reserve with a mechanism for recapitalising the Strategic Reserve to be brought forward separately by the Minister for Treasury and Resources for States Assembly approval. The initial calculations by the Panel indicate that the annual sum required would be between £5 million to £7 million per year.
The Panel has undertaken a review of the funding proposals and will be publishing a comprehensive report prior to the debate. As a result of its review, one of the concerns identified by the Panel is that the external borrowing model (i.e a Bond) is sensitive to small changes in assumptions, such as the investment return over the next 40 years or a fall in States revenues.
The Amendment lodged by the Panel gives States Members an option to choose between Treasury’s proposals or to finance the project from internal sources.
Deputy John Le Fondré, Chairman of the Panel, said:
“Following the Panel’s Scrutiny review of the Hospital Funding strategy, we identified that whilst at first glance, borrowing at a time of low interest rates is not unreasonable, this has to be balanced with the reality that we are living in a very unstable economic period.
As such, following the examination of evidence that suggests only a small fluctuation in our current financial position would wipe out the Strategic Reserve or even leave it in deficit, we wished to provide States Members with a realistic alternative funding option.”