After claiming that the Island’s Strategic Reserve – the rainy day fund – could be ‘wiped out’ or even left in deficit if Treasury Minister Alan Maclean’s hospital funding proposals are given the go ahead, the Corporate Services Scrutiny Panel has now formally proposed an alternative.
Senator Maclean wants the States to borrow up to £400 million to fund the new hospital with the loan being paid off over 40 years from the interest and other gains the fund attracts. Under his plans, the remainder of the cost of the project would be funded from States reserves.
Although his proposition was debated in January, after hours of arguments – during which politicians raised concerns over whether the proposed £400 million loan would be legal – the plans were delayed after backbenchers successfully argued for it to be put back to Scrutiny.
Now, following that review, Corporate Services today said that it is concerned that the external borrowing model is ‘sensitive to small changes in assumptions, such as the investment return over the next 40 years or a fall in States revenues’.
Due to their fears, the panel has lodged an amendment to Senator Maclean’s proposals stating that it wanted to provide Members with a ‘realistic alternative funding option’.
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