A Funding Money-Go-Round

A Funding Money-Go-Round

Deputy Morel asked:

As the cost of joining Liberation Square with Weighbridge Place for the Liberation 75 celebrations is now being borne by the States of Jersey Development Company rather the Growth, Housing and Environment Department, will the Minister advise the Assembly of any plans she has for the £2 million that had been allocated in the recent budget to the department for that same work?

The reply by Susie Pinel (Treasury Minister) notes that:

“One funding solution identified being an element of the return due from JDC.’s (States of Jersey Development Company) College Gardens housing scheme. This was identified as an appropriate route, with profits made by the States wholly-owned company being used to pay for improvements in public realm. Officers are finalising this proposal. 

She also adds that because of a more detailed “feasibility study” that:

“I understand from the Growth, Housing and Environment Department that the scheme is now likely to cost £3 million, not £2 million, and I await an explanation of the variations when I consider the recommendation of officers.”

Now the JDC’s College Garden Scheme was to have yielded a dividend to be returned to the States – the first in many years, I should note – as unlike Andium they seem to swallow up all their profits internally.

So what this means is that the income from a dividend to the States from the JDC’s College Gardens Scheme would be reduced by £3 million. 

Effectively, the States would be £3 million worse off, which is the same as if the JDC had given the full dividend, and the States had funded the £3 million!

Saying that the cost of such a scheme – now, thankfully on hold – would be “borne by the States of Jersey Development Company” is very misleading, because of the effect of this money-go-round!

Incidentally, the last Annual Review and Accounts for the JDC are only available to 2017!