…the need for change and doing things differently probably achieves peak consensus in the island, but the ability to make it happen is far less certain. Here, I set out the limiting factors

‘CONSENSUS’ is bandied around a fair bit, often for the wrong reasons, and frequently as a reason for Guernsey to adopt executive government. Expect more of that in the months ahead following the imminent election. But if there is one thing where there is general agreement (consensus!), it’s that the Bailiwick can’t carry on as it is. Things have to be done differently. 

That was the dominant pre-election message, for instance, from the G8 collaboration of island businesses, which stated bluntly: ‘Guernsey is at a crossroads… Change is needed.’ This was followed up shortly after by the Guernsey Hospitality Association reminding candidates that its sector contributes £500m., or 14% of Guernsey’s GVA, to the economy and could do even better with a bit of support from the States.

It’s well documented how the island’s going backwards in terms of living standards, GDP growth and economic disparity, which is widening. In view of this, I dare say many manifestos will carry variants on promises for doing things differently. Who knows? Some may even mean it.  

But today, we’ll be considering whether – or to what degree – the island is capable of serious change. And, no apologies for this, we’ll take Leale’s Yard as a case study because it highlights a number of relevant issues related to the likelihood of a reset. 

First, however, I need to record that two Policy and Resources Committee sources have been in touch to say my last column (‘Decoding the Leale’s Yard fiasco’, available here) was inaccurate in a number of respects – delays in the project weren’t down to P&R and I’m wrong to blame risk-averse civil servants.

As to the real reason for P&R pulling the plug at this late stage, well that’s still not in the public domain, but was considered serious enough to be a total taxpayer deal-breaker.

Hmm. I’m happy to be proved completely wrong on this but even on the basis of ‘doomed if they do… etc’ a last-minute decision to back out has to represent a failure of some sort, doesn’t it? Even if we’re not allowed to know what actually caused it. 

Forget blame then, but what have we lost? More than 300 homes on a privately owned site, plus ancillary developments and an opportunity to regenerate the Bridge – itself a government policy – at modest cost to the States. In addition, government would thereby have triggered £100m.-worth of private investment in the area for an outlay of £34m. of its/your cash.

Yes, a tidy sum, but that would have given P&R 90 new one- and two-bed apartments plus parking for £378,000 per unit, for use by key workers in just 28 months’ time – and they would pay rent to government for the use of them. Effectively self-funding while triggering much wider economic benefits.

So what went wrong? I don’t think even developers Omnibus really know and non-disclosure agreements make it difficult to get to the bottom of it. But from what I can gather, much hinges on valuations. Government saying the site wasn’t worth the stated amount (but failing to provide their own estimate) while also expecting a massive discount on the properties released. Cakeism of the highest order?

One well-placed business source (not linked to Omnibus) told me: ‘It seems that the truth is likely to be that the States simply don’t have the resources to pre-commit to buying 90+ completed key worker homes in two years at a fixed price, discounted to below current market rate, with plot values of £15k rather than the £50k paid for Kenilworth, and with the developer taking all delivery and inflation risk. That seems to be what P&R have walked away from. There’s no logic to it – other than not being able to commit to the future purchase.’

At the same time, government was apparently suggesting Leale’s Yard might after all be better used as a site to relocate Frossard House while kicking into touch the ability to press ahead with a scheme that would have released 314 new homes on to the local market in very short order. 

So faced with an acknowledged housing crisis, P&R has killed Leale’s Yard and is instead backing never-never proposals from the Guernsey Development Agency which has no funding, no planning applications in place nor any credible timescales. Oh, and quite a lot of parish opposition to the scale and positioning of housing. 

I set this out because I think it hinges on whether Guernsey is ready and has the capacity or ability to engage equally in public-private partnerships like this. Agilisys, you cry. Yes indeed. There, Scrutiny’s own report into the partnership highlighted a lack of understanding by government of the contract’s implications, an underestimation of the required work, and inadequate technical expertise within the States to manage the contract effectively. That’s quite a list of cock-ups. 

Look back a bit further and in 2008 Rosaire Sheltered Housing Ltd delivered Rosaire Gardens, the island’s first Extra Care facility of 86 homes in partnership with Housing 21, a UK non-profit specialising in elderly care. In doing so it paved the way for the highly successful Extra Care developments at Maison Maritaine and Longue Rue House.

It was a true public-private partnership, involving public and private land and funding. However, negotiations for Rosaire Gardens – much like Leale’s Yard – took more than two years and legal fees for both parties in the partnering agreement alone were multiple hundreds of thousands of pounds because of the novelty of the structure in Guernsey. 

Meanwhile, elsewhere in the world, PPPs are routinely used to stretch and leverage limited public resources and achieve better outcomes using private investment, while here you might recall that the States blew more than £11m. on pulling out of deals with Lurgi and Suez on waste disposal.

P&R, rightly, wants to avoid wasting taxpayer funds but is there better value to be achieved in partnerships with private cash or in government itself running every project? Recent experience hasn’t been positive – hospital, education and Alderney runway spring to mind – and even the Guernsey Housing Association has been off the boil when it comes to actually building the homes people need.

So like the ferry fiasco, Leale’s Yard is crying out for a full independent review of why it wasn’t possible to get it over the line despite all the resources of government and the efforts of Omnibus, an associate company of the outfit that delivered Rosaire Gardens. We really do need to learn from this. 

I say that in part because I think the Leale’s Yard developers got wind of the States’ late reluctance to commit. It’s why, if my information is correct, it asked its bankers to attend key meetings to confirm it was good for what it said it would do. 

So, to summarise, we agree we need to do things differently but our track record of doing so is questionable at best. After the election, can we avoid the crossroads flagged by the business community and others and significantly change the way we do things?

Alas, the evidence, from what we have in the public domain, isn’t encouraging, but I remain happy to be corrected by P&R.