Last week a high level economic review concluded that the Island was at a ‘significant risk’ of structural deficit – with spending exceeding income – unless greater efforts are made to increase revenue and reduce costs.
And during Wednesday’s Treasury Department Scrutiny Panel hearing, Senator Alan Maclean identified that his key priorities ahead of the upcoming release of the three year Mid Term Financial Plan, were to make savings across the board, increase efficiency and productivity in government departments and to create economic growth.
ALL of Jersey’s beaches passed an annual water quality test in 2014 with 12 out of 15 scoring the highest mark possible.
The Marine Conservation Society today published its annual Good Beach Guide. Twelve of the 15 Jersey beaches surveyed – including Grève de Lecq and St Ouen – were ranked as MCS Recommended, which means that they have excellent water quality. Of the remaining three, St Brelade attained the second highest rank possible – Guideline – meaning it has higher water quality than the mandatory standards, while Bonne Nuit and Bouley Bay met the mandatory standards.
However, the minister said that if these plans did not achieve their aims, a ‘last resort’ solution could be to add further taxes and charges – highlighting that with a new £75 million sewage plant set to go ahead, there was potential to increase revenue by creating an additional charge for using the service.
‘Across the States as a whole there are a huge amount of services delivered that have either not been charged or charged at very low rates,’ he said.
‘Liquid waste disposal is a financial expense that we expect to be covered by income tax and we have to go through other processes first before we start thinking about any additional charges.’
However, Senator Maclean later told the JEP that he had ‘no answer’ as to how the charges could be implemented or what form they might take, as it was just an ‘example’ of where funds could come from.
He also reiterated that if any taxes or charges did come to force it would be after exhausting all other options.
‘No work has been put together on how that would work in practical terms,’ the minister said.
Panel vice-chairman Deputy Simon Brée, who initially raised the issue of taxes at the hearing, told the JEP that the mInister’s comments about potentially introducing sewage charges caused him ‘great concern’.
‘I have always felt that that sort of service provided by the government should come under income tax. To then put another charge on top, to say, because you’re connected to the mains drain system you need to pay a fee every year to be connected, I think that is very wrong,’ he said.
Deputy Brée added: ‘Surely in every country in the world, there are certain necessary and required services that they provide, one of which is the disposal of liquid waste from private properties. If they start bringing in a charge, one has to ask what our income tax being used for.’
In 2010 the States of Guernsey voted to switch the cost of waste water disposal from taxpayers to water customers.
All Guernsey Water customers currently pay a standing rate of £34.40 a year.
WORK is progressing well on the new £8 million sewage treatment plant at Bellozanne, which will turn the Island’s waste into fertiliser.
The original plant was built in 1988 and is in need of replacing after it reached the end of its lifespan.
Duncan Berry, assistant director of water waste for Transport and Technical Services, said: ‘We are in the process of replacing the whole sewage works, and this is the first stage. It will turn the Island’s waste into valuable fertiliser and is a vital piece of infrastructure – even if it isn’t the most glamorous.
‘We have built new concrete tanks that will have a lifespan of 60 years and the pumps and other machinery will need to be replaced every 20 years. The new technology we are putting in is much more efficient and could supply electricity for onsite power which could save £400,000 a year. Eventually, it will pay for itself.’
The project started in early 2014 and is scheduled to finish by next June.
The project is being handled by UK company Doosan Enpure Ltd.
The firm, which specialises in waste water treatment, was awarded the contract in 2011, but delays followed when Enpure went into administration in September last year before being taken over by Doosan Heavy Industries and Construction Company.
Rather than tender the contract again, the States decided to renegotiate with the new company.
Thickening the Island’s waste sludge in large drums at Bellozanne reduces the amount of solid waste that goes forward for treatment.
David Garnett, a technical waste water specialist with Doosan Enpure, said: ‘By getting rid of some of the water in the sludge stream, the volume is reduced.
‘In the case of Bellozanne, the sludge is heated to 55°C for pasteurisation. Obviously less sludge volume means less heating energy needed to heat it to the required temperature. The liquid effluent removed in the process is returned to the sewerage treatment works for treatment.’
THE Island’s government needs to make public sector efficiencies now to avoid future cuts in services and higher taxes, according to four senior UK economists.
The Fiscal Policy Panel published at the end of January a special report ahead of the States’ new three-year Medium Term Financial Plan, which is being prepared for debate later this year.
The economists advise that capital investment should not be delayed if it will bring economic benefits in the longer term and that funding from the ‘rainy day fund’ – a States reserve account – or borrowings should not be ruled out.
Panel chairman Joly Dixon said: ‘It is not catastrophic, but it is not all that rosy, either. There are warning signs and a very high risk of fiscal imbalance.
‘The politicians will have a pretty difficult job. It will be difficult because although Jersey is in an enviable position and healthier than most economies, with positive assets rather than big debts, the economic performance has not been as benign – the Great Depression led to a difficult economic position, which did not bounce back.
‘We are not telling them what to do, but mostly we want to see the States tackling difficult fiscal decisions.’
The States Treasury is due to update financial forecasts in the next two months, ahead of the Strategic Plan.
Commenting on the report, Treasury Minister Alan Maclean said that increasing taxes ‘had to be the last option’. He said that in the short term, running at a deficit was not a problem, provided there was a plan to rebalance the books.
‘What they are basically saying is that we have a strong balance sheet, a lot of assets such as property, the Strategic Reserve, cash, investments, which are worth billions. We are a wealthy Island and that does give us room for manoeuvre.’
Since the publication of the 2015 Budget last July – which forecast a projected income shortfall of £50 million for this year – there has been a ‘moderate’ improvement in Jersey’s economy, with lower unemployment, low inflation, earnings rising faster than inflation and a more positive outlook from businesses.
Nevertheless, there are a number of ‘uncertainties’ that could affect progress, the economists warn, including global recovery, the impact of UK banking regulations (in particular, the ring-fencing of the banking sector) and the prospect of an EU referendum in the UK in 2017.
Even if banking profits improve, this may not feed through to the tax take for some time, says the panel, because even if business activity picks up it may be offset by higher or one-off costs, regulatory requirements and increased compliance. In addition, banks are intending to pass the benefit from initial rises in interest rates on to savers.
Looking beyond 2018, there is ‘a real risk’ that economic growth could be ‘broadly flat’ at zero per cent, with fewer workers compared to an increasing number of pensioners and increasing demands on Health and Social Security.
Panel member Dame Kate Barker said: ‘Although in the short term prospects are favourable, in the longer term the capacity to grow may be quite small and the government has to plan for that. It is important to think about how to bring finances back into balance and what they can do to help the economy be more productive in the future.’
THERE is still no definitive answer on how to rid St Aubin’s Bay of the blight of sea lettuce, experts announced during a meeting in October.
Research commissioned by Transport and Technical Services and the Environment Department was presented to politicians and a group of St Aubin’s Bay businesses during a conference at the Radisson Hotel.
Dr Kieran Conlan, of Cascade Consulting, who specialises in water quality and ecology strategy, said factors like sunlight, temperature and nutrients contributed to the generation of sea lettuce but that further work was needed to fully understand the processes.
He added that France and southern Ireland also experienced high levels of sea lettuce but generally left it on the beach.
Transport Minister Kevin Lewis told the JEP that removing the lettuce would be ‘a logistical nightmare’ and would cost hundreds of thousands of pounds.
But he added that research was continuing to see how it could be prevented from growing in the first place.
Deputy Lewis said: ‘We are limited to what we can do on the beaches because of the sheer volume of sea lettuce. There have been suggestions to take it away, but it would require 900 lorry loads, which would cost hundreds of thousands of pounds.
‘Taking the seaweed away would also take away some of the sand, which is what we want to avoid if we are to maintain the ecology of the beach.
‘Then there’s the question of what we do with it when it is off the beach. We have been experimenting with blending it with a portion of compost, which seems to be working quite well.’
He added that there was no suggestion that the sewage treatment works was causing the problem, as the effluent it discharges into the bay is treated.
However, Deputy Lewis said that nitrates running off the land into streams which flow into St Aubin’s Bay, combined with the warm temperature of the bay, provided the right environment for the sea lettuce to grow.
He added: ‘We’ve had sea lettuce for more than 50 years. There is no easy solution, but anything we can do we will do.’
St Helier Constable Simon Crowcroft said: ‘The public want to see some practical steps to reduce the sea lettuce. There are no health risks, but it makes the beach unattractive for people to spend time there.’
