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Hospital funding proposition

31 October 2017

Jersey’s new General Hospital took a major step forward today, as the Report and Proposition to fund its construction was lodged ahead of a debate in the States Assembly in December.

Ministers are proposing a mix of funding that will include borrowing up to £275 million towards the projected total cost of the project of up to £466 million, £23 million from existing allocations and the balance to be drawn from the Strategic Reserve Fund (the so-called ‘Rainy Day Fund’).

Borrowing has been recommended by experts and endorsed by the Treasury Advisory Panel, because of current historically-low interest rates. The price of a fixed-rate bond is currently around 2.625%, while the average income from the Strategic Reserve for the last 10 years has been 6%. That means that Jersey is forecast to make more money from investing the £800 million Strategic Reserve than the Island will have to pay to borrow.

Minister for Treasury and Resources, Senator Alan Maclean, said there was no doubt that Jersey needs a new hospital able to provide the high-quality care required by current and future generations of Islanders, as health costs rise and the population ages.

“I am proposing to fund our new hospital through a sensible mix of borrowing and using some of our reserves, an affordable solution that makes the best use of the savings our community has accumulated over many years, while maintaining the value of those savings so future generations can continue to benefit from our investments,” he said. “This balanced proposal makes the best use of our strong financial position, protects the bulk of our reserves and avoids the need to raise charges or taxes at this time.”

Outline Business Case for preferred site

In addition to the funding proposal, the States Assembly will be asked to endorse the Outline Business Case for the project, which details proposals to develop the new hospital on the preferred site approved by States Members in December 2016.

Since that decision, the project team has been working on relocation plans, which will enable the site for the new hospital to be prepared prior to the start of construction.

At the same time, there has been extensive engagement with clinicians and other key stakeholders to consider the internal design and layout of the new building. It will be built on the southern part of the existing site, and incorporate additional land in Newgate Street and Kensington Place, as well as making use of Westaway Court, a site adjacent to Parade Gardens which is already used by the hospital.

The Minister for Health and Social Services, Senator Andrew Green, said: “Our hospital is a special place for Islanders where lives begin, lives are saved, life is made better or sadly, for some, life ends.

“We know we need a new hospital, we know it should be in central St Helier, we know how to fund it, so we just need to get on with it. The new hospital will provide current and future generations of Islanders with the quality of health care they expect, in a facility that’s fit for the future.

“All we need now is the approval of States Members, and then we can get this vital project started in 2018.”

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