As part of its work to review all planned capital projects before returning to the States Assembly with recommendations in July, the Policy & Resources Committee has written to Principal Committees to explain its preliminary proposals for the re-prioritisation of the capital portfolio so that they can form the basis for discussions at engagement sessions taking place before the end of May.
Under its current plans, the Committee will seek States approval for an amended capital portfolio. All projects previously prioritised have merit and are needed, however it will now be necessary to deliver them over a longer period. The Committee's focus is on mitigating the financial impact for the States given the ongoing underlying deficit position. It has also focussed on flattening the curve of when projects are delivered to recognise the current capacity limitations of various sectors within the island to deliver multiple large projects at the same time.
The Committee has reviewed all planned projects and considered what should continue as planned, what should continue but be further reviewed to see if the scope can be amended, and what should become a pipeline project to be delivered as currently scoped but at a later date.
Phase 2 of Our Hospital Modernisation and the Transforming Education Programme are the two largest capital projects and the Committee does not consider it possible or sensible to try and deliver both of these at the same time. As such it is proposing that Our Hospital Modernisation moves to the pipeline category. However, the Committee is also proposing to accelerate the HSC's Community Hub Programme recognising the need to invest in facilities for children and families as a priority - but with a manageable project that is of a size and scope that can be delivered in practice.
The Committee considered that the Transforming Education Programme was already well on the road to implementing new staffing structures for the Secondary School Partnership (three 11-16s and a separate sixth form centre), has decanted all staff out of Les Ozouets Campus pending its redevelopment and construction work is likely able to start relatively soon following the July debate should the States approve the reworked capital portfolio. These were the primary factors leading to the Policy & Resources Committee's proposals to continue as planned with the Transforming Education Programme while moving Phase 2 of Our Hospital Modernisation to the pipeline category. Phase 1 of Our Hospital Modernisation is already 'in flight' and will continue to completion as planned.
The Committee has also identified a number of projects where it believes there is potential to look at the scale of the scheme and its core requirements, to possibly scale them back and make them more affordable and deliverable. Overall the Committee estimates the changes put forward in these preliminary proposals could see a spending reduction of between £150m - £200m this term.
The changes to the capital portfolio would not impact the day-to-day maintenance of essential public infrastructure, as the maintenance of things like schools, roads, coastal defences, or health facilities is treated as 'minor capital' funding, whereas the portfolio deals with 'major capital' projects.
Deputy Peter Ferbrache, President of the Policy & Resources Committee, said:
'During the tax review debate our Committee was directed by the Assembly to carry out this review, which we have prioritised due to the number of schemes that will be seeking funding in the immediate future and the need to provide for clarity for all programmes as soon as possible.
'We have sought to take a sensible approach, recognising that the way the capital portfolio is currently constructed creates significant spikes in expenditure with large projects being scheduled to be carried out at the same time. We need to reduce the cost of the current portfolio in recognition of our ongoing deficit and the need to make the limited reserves last longer. We also want to flatten that curve to make sure the island as a whole has the capacity to deliver all the capital projects the Assembly has identified as essential.
'It is important to recognise that these are our Committee's initial proposals, which we have shared with Principal Committees in advance of further discussions with each of them. We wish to be as transparent as possible but need to stress that they are subject to potential changes following those discussions and it will ultimately be for the States Assembly to decide. Difficult decisions are needed, however, as it is simply not possible to deliver all projects in the timescales originally planned.'
