The Independent and Green Party Alliance, kept in power by the support of both Labour and Liberal Democrat Councillors, has for the last four years failed to work effectively in the interests of Islanders, frittering away substantial reserves to support out of control spending.
Last year, the Independent and Green Alliance Administration housed considerably more refugees than it did Islanders, even though it had Full Council approval through the final Council Amended Budget for a draw-down facility of £40 million for regeneration and new homes. This was twinned with proposals to fully fund the borrowing to deliver 120 new, modern prefabricated homes.
Over the last four years, the Independent and Green Alliance Administration could have addressed the spiralling costs of off-Island placements of children in care, at an average cost of around £4,500 a week per child, by spending capital on the Island to provide both care facilities and jobs to provide the care locally. Instead, our Financial Reserves were spent lining the pockets of venture capital companies who are buying up children’s care facilities and making huge profits from local authorities. The answer to controlling cost is to grasp the nettle and provide facilities, train staff and create jobs locally. Eventually this is starting to appear in the Budget documentation narrative in this year’s budget, but it is far too little, far too late. The available Reserves have been frittered away and fixed rate borrowing costs have more than doubled.
The Independent and Green Alliance have failed to exert effective budget control, hiding budget underperformance by revising budgets without reference back to Full Council, who are actually responsible for budget setting. When the Conservative Administration lost control of the Council in May 2021 the total Council Financial Reserves stood at over £117 million. Over the life of the Current Administration, they have used virtually all the available reserves and wiped out the Covid Reserves put in place by the previous Conservative Administration, spent all of the Transformational Reserve Fund, and reduced the General Reserves to within £1.5 million of the minimum level the Council is required to maintain.
The current Cabinet has run with a structural deficit - spending more than its income - since gaining control of the Council. Hiding the fact by adjusting the Annual Budgets and raiding reserves to offset. They are projecting that the structural deficit will continue and increase over the next few years, but with no reserves left to off-set the shortfall a deficit will be carried forward. As the Council moves from a Cabinet to a Committee system of governance in May, one hopes that the decisions and financial control going forward will be much more effective, but whoever is making the decisions from May will inherit a very poor financial position.
The current Leader of the Council seems to believe that we will be rescued by a financial bonus from Devolution and that it offers a pot of gold at the end of the rainbow; many of us think the pot of gold story is a myth!