Scrutiny supports £44m recession plan
Friday 12th June 2009, 2:59PM BST.
Sarah Ferguson: We must get it right.
AN unprecedented £44 million plan to support Jersey’s economy during the recession could be launched within weeks after being approved by Scrutiny.
The money, which will be drawn from the Stabilisation Fund – a States reserve account – will be used to fund a number of projects to create and safeguard jobs. It will also be used to offer general support to businesses and help people to retrain.
A further £112 million from the same account will be used to plug budget deficits in 2010 and 2011 caused by a drop in tax revenues and an increase in income support payments associated with a rise in unemployment.
Last month, States Members backed the plan by 47 votes to three. This week, the Corporate Services Scrutiny panel, which had been reviewing the scheme, announced that it also supported the plans.
In their report, Senator Sarah Ferguson, the chairman of the panel, said: ‘This project is unlike any other experienced by the States of Jersey. We must get it right first time.’
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Just so long as they’re not planning to give any of our money to “Jersey” businesses like Dandara and Harcourt.
It was chilling to note that during his “Sunday Roast” interview Senator Ozouf would not commit himself to an outright “no” when asked this question – instead opting for the “spin” of “the money will go where it’ll do the most good” type of wording…..
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Sarah Ferguson claims that this is ‘a huge amount of money. We must get it right”.
For goodness sake, what a change this would make, as have the States ever got anything right?
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Okay so part of this money will be used to help people that are unemployed to re-train,- for what jobs???
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Local buisnesses that have their one and only sole base in the island should surely come first.
Those that don’t will surely just milk it for what its worth then ship out.
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I dont think this is a good idea. There are signs in the UK that their economy is starting to grow again and Jersey will probably follow fairly soon. The States are ‘behind the curve’ and any stimulus now is likely to cause inflation problems in the future. We are also looking at a tax ‘black hole’ when 0-10 is fully implemented, and the money would be much better retained till then to reduce any increase in the rate of GST.
The package will be unfair if our hard earned tax contributions goes to politically well connected firms and not to their compeditors.
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Would it be to much to ask & publish where this money is going and what the receipents are going to spend it on?
I also agree, ‘you must get it right first time’, it’s one hell of a lot of money to get it wrong!
Who will be responsible if it goes wrong?
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In principle a bold and brave move..I hope those who need it benefit most, well that would be the idea one hopes.
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Does anyone expect any change from the norm? I would say this money has a good chance of going to the wrong sorts. I will be surprised if I am wrong.
How much of this money will end up off island? Ozouf likes to talk the talk. As per walking the walk thats a different kettle of fish….
Will Sarah Ferguson be betting her political career on getting it right, or is it just hot air I wonder?
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It has to be said that there is a big question hanging over Harcourt and the Esplanade Quarter.
It is the policy jewel in the crown of the current CoM and I think Pip Ozouf and his allies would give a lot to get it safely launched.
According to guidelines so far it has to be privately funded but I think there must be a certain temptation to raid the accumulated funds.
I am half expecting some guff about a ‘strategic investment in the island’s future’ and then there will be a £25 – 100 million pump priming to give the banks confidence.
Harcourt has to post the bond by the 30th of June so there has to be developments or further delay in the next two weeks.
On balance my money is on further delay and then a sort of subsidy in September!
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It is important that whoever gets our money, the process is completely transparent.
Details of the recipients, what the money will be used for, the number of additional local people expected to be employed and the length of time they are expected to be employed should at the very least be publised.
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Transparent States accounting?
You are having a laugh!
Most of the money will disappear in to States departmental budget heads with barely a whisper.
One of the things about the States is that it is a big and fairly decentralised organisation.
This is partly historic, the old committee structure produced private fiefdoms that did not relate together at all and partly departmental rivalry under the new ministerial system.
Thus it is not possible or very difficult to get global totals for the number of free parking places provided to civil servants.
The total spend on consultants as each departmant has its own accounts and hence getting the various subtotals out of their accounts to produce a global figure.
I could go on but it is fairly obvious to anyone that follows States’ finance that a private company would not be allowed to create this heap of obfuscation.
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There is a very great danger when making a move like this that the money will go on schemes or to businesses that will ultimately produce nothing concrete at the end of the day.There is also a danger that concrete (In the form of buildings) is all that will be produced! I do not envy Sarah Ferguson her task!Her best bet is to divide the money into £5mn tranches and then identify under 8 headings the types of investment in our Island’s infrastructure that would produce longterm benefit and in particular sustainable ongoing employment for the Island’s resident population.At the same time she needs to identify schemes that will provide immediate employment for those who have either been made redundant or whose locally based business has suffered as a result of this economic downturn.I(as no doubt does everybody else Sarah)have a few suggestions:-
£5mn to Brian Curtis’Community Savings & Credit which should expand its activity to provide viable and affordable old style personal banking to that most important, and ignored sector of the economy the consumer.
1)£5mn to a scheme to assist local businesses with a proved business activity establish an ongoing presence on the internet. The purpose of this would be to give those businesses which have a unique street appeal but which are not best placed, either because of lack of money,staff or technical knowhow to exploit the additional marketing opportunities an internet website offers them to reach a wider international client base.There would be room here for a tie up with local schools and Highlands to provide young computer literates for example to work with local businesses to develop that side of their business.
2)£5mn to support direct marketing for locally based businesses. As an example I will quote The Fish market in St Helier which I noticed had stalls closed up during the week because the cost of opening them is prohibitive. This Market is a marketeer’s dream , it should be booming ,with local as well as international trade.How about taking trainee chefs from Highlands (And Elsewhere) and get them to offer cookery courses on site at the actual market, showing passing prospective customers how to cook simple fish dishes etc.Occasionally get one of our well known local chef’s to do guest appearances? offer simple free recipes for dishes tied in with the fish stock in good supply at specific times.
3) As an Island we do not utilise our expertise with the sea nearly enough.£5mn for businesses involved with training/scientific research/conservation/wildlife tourism(Plemont residential Marine and environmental research centre?).Training can cover professional fishing/boat & commercial shiphandling/ commercial and leisure diving training/boat building and maintenance/ environmental clean up, an Aquarium etc.
4) £5mn for Aviation businesses concerned with pilot training, aeronautical engineering.(Plane racing Red Bull style?)
5) £5mn for businesses establishing tourist related entertainment and activities in niche markets: e.g how about a tourist submarine, a small guage steam railway with a commuter tie up?An indoor ski slope and toboggan run?
6)£5mn to assist care training for the elderly.
7)£5m “shoot the moon” money for small new local business start up situations.
Whoops, sorry Sarah I’ve spent the lot,easily done, but at least all the above would trigger local employment and possibly establish viable ongoing economic sectors outside the Finance industry, unlike the Harcourt development proposal.
Incidently I haven’t even touched on inter island opportunities/waste recycling and disposal/securing viable and cost effective communication links, we may need that population expansion after all.
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My advice would be to keep the States well away from this money or we could well end up regretting it. My honest opinion is this lot are about as much use as a chocolate fire guard.
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Adrian you may well be right but for Islander’s future sake I hope you are wrong this time. The main point I feel needs to be made is that if this is an attempt at “Quantative Easing” then we should not make the major mistake which has been made in the UK and bypass the consumer. If you pump the money into the system directly and solely to businesses you run the risk of removing consumer choice as to which businesses are viable and which have had their day.It may sound cold hearted but if you take the consumer (Who creates the demand for a product or a service) out of the frame, all you have is a public subsidy scheme for business which will very soon run out of money at a speed determined by just how many unviable businesses you have in relation to the viable ones.
Here in Jersey we have an economy far too reliant on one very important and powerful sector, the banking and finance industry. We should also be aware that luckily we have also a sub category, the excellent legal practice industry which is not wholly focused on just finance but which is a key driver in generating business in that sector.What our politicians need to do is to kick start some alternative economic activity in other sectors and good market research is the key to that. There is also an element of imagination and entrepreneurial flare(Good timing and a great deal of luck)involved, and these are rare qualities only acquired by trial and error.The problem facing the rest of us is that there is no guaranteed result, and therefore you can only limit loss by spreading the risk.The other way of limiting the risk is to progressively invest and always have a means of divesting if problems occur.And the third way is to always monitor progress and not be afraid to adapt a scheme to suit changing circumstances. This is where the Banks have gone wrong.In the days of the locally based bank manager it was always possible to fine tune a loan to suit changing circumstances(Or at least speak to someone attuned to those changing circumstances in the local environment with a degree of power to do something about it)With the advent of computer lending and the influx of accountants rather than bankers into that industry, short-termism caused by a constant and ever present ability to check the bottom line (And scare everyone witless by over reacting to a temporary downturn),coupled with an increasing reliance on the computer in the decision making process (Cheaper than expensive staff)has led to an environment where the client has to be adapted to fit the service model provided rather than vice versa.Increasing paranoia has resulted in fewer and fewer clients being able to meet ever increasing criteria to the point where whole sections of people are finding themselves disenfranchised by petty beuracratic rules.
To return to the £44mn, I do not think that we should expect 100% success in the investment of this money, but if the risk is spread with the aims of creating ongoing and sustainable local employment,viable new business,ongoing development and expansion of successful business, investment in more diverse economic sectors currently being ignored,and play to our strengths, then the politicians responsible can at least say they had a good go, and there is a chance more than one element will come good.
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Truthseaker 7
I agree with your post completely, every little bit (please don’t fall off your keyboard )
Adrian 8
Why is your cup always half empty and never half full ?
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people are losing their jobs out here.
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Maybe they can share it among the population….£44 million into 100,000 people is £440.
That will be a nice bonus to us all…..maybe we could all treat ourselves and even buy something locally !
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PJG my cup is half empty because it is going down! When you have adrink out of a cup you are draining it down, not filling it up, therefore it is half empty, when you are half way through it.
If you fill your cup up with another drink it will pass half full on the way up.
You have used a good analogy for the island. As things are getting worse the correct analogy is half empty is it not? When things hit the bottom and begin to improve they would get to a point of being half full on the way up to the top again.
Nick 100% failure is nearer the mark with this lot in my opinion. I wouldn’t give them a penny of my own money to invest, would you?
I have given them advice which they refused to take on board. Removal of the social security cap was one such procedure. They elected for the more costly and labour intensive route of GST.
GST will cause the demise of many small businesses over here, who are unable to spend the required time and effort policing this tax for the government. I know because I have spoken to many small businesses and this is their number one concern.
Some are already in the process of closely PURELY because of GST and wouldn’t have done so without it.
Sorry I have no confidence whatsoever in this lot, they are all for image and nothing else, from what I have seen.
I was at a few husting last October and in my opinion the rubbish some came out with was hillarious, however they still got voted in. More fool those who voted for them as far as I am concerned. However the rest who never voted for these individuals will also be affected which is not right.
Sorry but this is how I see things. I wish I could be more positive but I can’t.
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You sadly may well be right Adrian as I see £22mn has already gone on concrete,bricks and mortar schemes already underway. I just hope these are providing local employment on an ongoing basis, not just until the end of the development scheme!As you imply good investment, like proper bank lending requires experience and know how. Sadly the world is too full of accountants and most of these are book trained and lack practical experience, every debit has to equal a credit, the result is “Nothing”
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When the “Establishment” membmers in the States talk of diversification they say they are infavour of it but when you dig down, it’s actually diversification of the finance industry! This isn’t diversification at all and doing nothing to assist those who do not want to/ cannot sit in an office. What we need is innovation – totally new concepts or revamps of old concepts e.g. events based tourism and it’s this type of business idea that we should be pumping this money into so that when those who lose their jobs are re-trained it’s with filling the new jobs to come in view – that would be the practical and commonsense applicaiton of these funds.
Listening to Senator McLean a couple of weeks ago on the radio I just felt that this money was going down the drain – he had no idea at all (thousands going to set up a finance offce in Singapore for example). The gentleman from “Coopers” (David Warr?)representing the Small Businesses was so much better informed and “hands on” I felt sorry he wasn’t a States member instead!
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