The JEP has invited the 21 Senatorial candidates to answer a series of questions covering a wide range of key topics in the election
Question:
Should the States sell off more assets, such as public property and utilities?

Cliff Le Clercq
Some States buildings have been run down and suddenly now require big money spending on them. Selected ones could be sold or maintenance-leased, thus reducing anything burdensome. What really is a worry is selling off to developers properties that were bequeathed to the States (us people), the dairy being one. Good-hearted donors will think twice – we don’t override people’s wills, do we ? As for utilities, why feed speculators? Keep the family silver and control of same insuring against vulnerability and loss of quality and or service.

Ian Le Marquand
Public property – yes, where appropriate. Public utilities – no. The States accounts do not take account of capital assets. Where the States no longer need a particular property, it should be sold so that the capital can be used towards other capital projects. However, with public utilities which have a monopoly, the current position of public control should be maintained. The position of Jersey Telecom has been mishandled. Competition was allowed with a view to selling Jersey Telecom but the sale was stopped and the net result has been a major loss of States income.

Jeremy Maçon
The furore over the proposed sale of Jersey Telecom is a good indication of the public’s feelings. They are also not happy to sell properties such as the Jersey College for Girls site, as these have been in the public domain for many years and are part of our heritage. Islanders hate to see public property fall into the hands of developers but like to see them being restored and put to good public use. If our public utilities fall into the hands of outside owners, we will have lost a major source of public income, which is not sensible.

Nick Palmer
I am torn on this one. The private sector can definitely run some things more efficiently. However, competition can make services and supply more complicated, less socially reliable and sometimes downright confusing. People forget that ‘efficiency’ often means lower wages – employees are customers too. Things can become cheaper and more obtainable but paradoxically less affordable – sometimes our sense of continuity, well-being and security can be damaged by this. I do think that the States should greatly reduce their property portfolio. The USA virtually nationalising huge banks and mortgage provision shows
that the free market is not always best.

Chris Perkins
The Public Accounts Committee have recently revealed that the States cannot control expenditure. The sale of some public assets may therefore be cost-effective. The States also needs to value and maintain public property correctly. The Opera House, for instance, is public property and must be maintained properly for the public good.

Senator Paul Routier
The States are currently facing the problem of maintaining their existing extensive property portfolio. Once the asset register is complete and the needs of the States have been finalised, some selective selling of property should happen and the proceeds should be used to maintain the remaining holdings. The opportunity to sell utilities could be considered when the market conditions are favourable.

Montfort Tadier
The buildings are the property of the public, and once sold they can never be got back. Properties should only be sold off if the design of the building is no longer suited to its preferred use and the costs of maintenance or refurbishment are prohibitive In this case, other suitable properties should be sought and purchased to replace them. In no circumstance should States property be sold simply to make a ‘quick buck’.

Senator Mike Vibert
The States have an extensive property portfolio which requires a considerable maintenance programme that is currently under-funded. Any property that is not required and is not a strategic asset should be sold off or leased out. Jersey needs to ensure the utilities essential to Island life are safeguarded, whatever their ownership status. This can be achieved through complete ownership, part-ownership, such as exists with the Jersey Electricity Company, or through the proper regulation of a private company.

Daniel Wimberley
I would be wary of ideological baggage on this issue, and of selling assets just to stuff holes in the budget. That is not prudent financial management. Sometimes it is right to sell, sometimes not. If the building in question can be better used outside the public sector, then of course sell it. If the utility presents fundamental issues of security for our Island as well as worker welfare issues, eg Jersey Telecom or Jersey Water, then don’t sell it. Note that the UK system of private companies building hospitals and schools is a complete disaster.

Deputy Sarah Ferguson
The return on the investment in the utilities should be improved. However, we cannot afford to have vital services owned by companies located half the world away who are only interested in their financial return and totally ignore the local community. We have too much property and this is being rationalised. Unfortunately, some of the maintenance will have to be paid for by the sale of property. The proposed charging of departments for the space they occupy will put pressure on them to make more efficient use of space. It is also possible that we should put all our States bodies, such as JFSC, JCRA etc, into one building.

Mike Higgins
We have to be very careful about selling off the family silver. You can only do it once and the money raised has to be well spent. It has not helped consumers in the UK, nor has it resulted in the substantial investment in infrastructure its advocates said would happen. The States’ surplus property should be sold if there is no further use for it but we must maximise the return from it and not repeat the fiasco of Senator Terry Le Main’s undervalued housing sell-off or the proposals to sell Jersey College for Girls for a price much less than could be obtained on the open market.

Nick Le Cornu
A business cannot operate without operating assets, and likewise the States. When the States undertakes a fundamental public service then it should have the assets to perform that service. Public property and utilities are the investments of the tax- and rate-payers. The States should not sell its assets, but if it is unable to operate them directly, then the most lucrative leasing agreements should be sought. This preserves them and generates income to relieve taxpayers either from subvention or needlessly high user fees. Selling public assets invariably makes tax increases necessary, as alternative and profitable income sources are lost.

Deputy Alan Maclean
The disposal of non-core property assets that are in a poor state of repair can be justified only if the sale proceeds are reinvested into maintaining and improving other public property. I would also insist that they are sold in a manner that will guarantee the highest possible sale price. The States’ property portfolio has not been properly maintained over many years and the current accounts are probably underestimating the maintenance bill by £10m per annum. I do not favour the sale of utilities without a persuasive argument.

Senator Philip Ozouf
I would radically reform use of States property and get better value from these multi-million-pound assets. I would be prepared to dispose of surplus, non-strategic assets, particularly those that could boost housing supply. Some housing stock could be earmarked for sale to their occupiers, on a shared-equity basis. I would ensure that any assets sold are sold for their maximum value. In the current financial climate, now is not the right time to consider selling utilities. I would review the performance of States-owned utilities and want to look at how best they should continue in part-public ownership.

Mick Pashley
An awkward one with my current job! The potential sale of Jersey Telecom worried many about their jobs but it may have been more beneficial to JT to be taken over by a larger parent company. My issues with this were twofold. Firstly, a company that generates around £15 million profit each year is worth keeping, not selling for a rumoured price of £200 million, which leads to, secondly, the valuation of assets. This was completely undervalued.

Trevor Pitman
No. The JDA believes that public utilities are strategic assets. On the issue of property and land, it is a fact that 75% of the costs of building property are in the value of that land. Selling land and property is a short-term and short-sighted solution at the expense of real strategic planning. Would businesses sell off capital assets to meet resource demands? No. Given our shortage of affordable first-time-buyer housing, we need to explore mechanisms for purchasing land more cheaply. Very difficult, but to tackle long-term problems we have to look at the bigger picture and attempt it.

Deputy Geoff Southern
Definitely not. The public utilities are strategic assets. My Scrutiny panel’s report on the sell-off of Jersey Telecom demonstrated the dangers of such a proposal for the stability of the Island. Potential buyers, either foreign multi-nationals or private equity, are driven to maximise profit. The foreign shareholder comes first, the customer second. Jobs would have been at risk. 75% of the costs of building property are in the value of the land. Selling land and property is a short-term solution at the
expense of strategic planning. No business would sell off capital assets to meet resource demands.

Deputy Peter Troy
Utilities should be sold. Governments should not be involved in running businesses. They do it badly. Plus, there is a conflict as the government owns the business and also regulates the industry. Private enterprise is much more efficient than government in a business environment. I supported the proposal to create a property unit, which can buy and sell property, and deal with property in the best interests of the public. Old stock can be sold and the proceeds reinvested into new stock or renovations etc.

Adrian Walsh
No. I believe that the States should put more assets into management trusts so that they are well run and that the money made on those assets returns back to the States year on year. Selling assets will only be a short-term solution and will leave massive problems for our younger generation.

Deputy Alan Breckon
States holdings on behalf of the public in the JEC and Waterworks can, I believe, be seen as strategic. There may be a case to be made for the States buying the rest of the JEC, as price increases and supply are pivotal factors to everyday life across the community. The States’ property portfolio can be more effectively managed and maintained than at present. Also, departments must realise the true cost of the space they occupy. All of this should identify proper business costs. Examples of poor practice exist – why did we move the Tourism office?

Mark Forskitt
We should not sell off physical assets like buildings, playing fields and parks. We should be using proper depreciation in accounts systems to inform us of the future replacement costs of buildings and to ensure we make adequate provision for that requirement. We
may have to become more creative about renovating buildings for different uses, rather than throw up new buildings. It may be plausible to run utilities on a partnership basis.