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Statement by the Vice-President of the Policy and Resources Committee

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General Update

Sir,

I am pleased to provide an update to the Assembly on behalf of the Policy & Resources Committee.

The January 2020 Guernsey Economic and Financial Stability Overview published last week showed an overall picture of continuing modest increase in the size of the workforce and GDP growth, driven primarily by the finance sector and professional services, supported by a slight expansion in the population.

The data shows that GDP continued to grow in real terms in 2018 by 1.7%. Secondary economic indicators such as employment and earnings suggest that GDP continued to grow in real terms through 2019, and estimates will be published in the summer.

This means that despite global uncertainty Guernsey is performing well, a performance built on foundations of stability, security and prudence. As the Assembly is aware, a significant amount of time and resources have been given during this political term to managing the potential impact of Brexit and seeking any opportunities that may arise.

The UK Government policy continues to be that the UK will leave the EU on 31 January with the Withdrawal Agreement approved and it continues to work towards achieving that goal.

A policy letter proving a detailed update on Brexit, outlining the next steps and their implications for Guernsey will be debated later in this States' sitting as an additional item.

The timing of this is important, as it enabled this Assembly to signify its views on the Withdrawal Agreement, which will directly impact on Guernsey's relationship with the EU, before it takes effect.

Due to the hard work and diligence of many inside and outside of this Assembly, Guernsey can assess its post-Brexit future with optimism and confidence.

The next phase will be for the UK Government to negotiate a future relationship with the EU on behalf of the entire British family, including Guernsey, with the aim of doing so before the end of the transition period on 31 December 2020.

The Policy & Resources Committee has been working closely with the UK Government to prepare for these negotiations, and as set out in the Policy Letter stands ready for the next phase.

Given the tight timescale it is envisaged that this process will be intensive and require the continued support of stakeholders both from within government and wider industry.

We have planned for this and will be putting the necessary governance framework in place to help manage our own negotiations which will take us through the general election in June. This will be a challenging and difficult year as the negotiations progress.

In respect of air and sea links, as with Brexit, progress is being made but by necessity much of it is happening behind the scenes.

Following the States' Resolution last spring, contingency work has been undertaken on Guernsey's sea links. A report has now been received from an independent expert, and an update will be provided to the Assembly in due course.

In the meantime the Policy & Resources Committee is optimistic that the confirmation of the new owners of Condor Ferries Ltd means that the Committee for Economic Development can now prioritise putting in place a service level agreement that will ensure that Islanders receive an enhanced service.

In respect of air links, the Policy & Resources Committee has received a recommendation from the Committee for Economic Development on the award of a public service obligation contract for the Guernsey-Alderney service and for the patient transfer service.

Officers are now assessing this recommendation and its likely cost, and how the interests of the Guernsey taxpayer can be protected. A policy letter will come to the Assembly by April, subject to ongoing work.

The Committee is also progressing the first stage of the review to develop a co-ordinated and coherent framework for the consideration of all aspects of air route operation that is under the control or influence of the States of Guernsey.

High level recommendations will be brought to the Assembly in April, and subject to the direction of the States further work will then be undertaken.

Over the course of this quarter the Committee will also bring policy letters to the Assembly on the review of the Population Management Law; the review of probate; the establishment of the social investment fund; the use of dormant bank accounts; and the review of La Gazette Officielle.

In addition, a policy letter and legislation in relation to the Revision of Laws relating to the regulation of the finance sector will come to the Assembly in the first quarter of 2020.

This will be a significant milestone for a hugely important project that will ensure Guernsey's finance sector and its regulatory framework is fit for the future and meets international standards.

It will also give much-needed stability and certainty to the finance sector, which remains the engine of our economy, creating employment, prosperity and the revenue that funds public services.

Guernsey's international reputation is essential to our ability to remain home to an innovative and successful finance sector. Our reputation will be further strengthened this month by the publication of Guernsey's national risk assessment report in relation to anti-money laundering and combating the financing of terrorism.

The national risk assessment is overseen jointly by the Committee for Home Affairs and the Policy & Resources Committee given our mandates

I am pleased to say that the assessment recognises the excellent work done in Guernsey - by the States, by law enforcement, by the Law Officers, by the regulator and by individual businesses - on these critical issues and helps prioritise the areas to which we can deploy resources in the future.

This meeting of the Assembly sees us debating the fiscal framework, which is critical for the future economic and social wellbeing of our community and the way that we work as a government.

Also critical in this respect is the work being undertaken on terms and conditions in the public service.

When public service roles are reviewed on the basis of a job evaluation scheme, in some cases there are considerable differences in the value of the full packages offered by the States of Guernsey, despite the fact that is has been operating as a single employer since 2004.  

One of the fundamental difficulties in bringing groups of public service workers together is linked to the historical structure of small teams built around political mandates.

Consequently current contractual terms have evolved over time, largely in isolation from one another, which has generated unnecessary complexity, ambiguity and inequality. This has resulted in a myriad of terms and conditions of employment which is now restricting progress when the organisation needs to be more flexible to meet the modern demands of the community and respond to the ageing demographic and reduction in workforce.

The Policy & Resources Committee has commissioned an independent review of the terms and conditions of all public service pay groups with a view to enabling harmonisation of employment policies, remuneration and benefits.

The Policy & Resources Committee is considering the findings of this review and working through an options appraisal that it will bring to the States.

The Committee has also been leading on work to consider potential States' involvement to enable the development of the Leale's Yard Regeneration Area. The President advised the Assembly in his Statement in September that the Committee had supported the Development & Planning Authority's request for additional funding to secure specialist expertise to help facilitate the preparation of the required Development Framework. The anticipated timeframe was dependent on securing the services of a firm with the appropriate capabilities, and the Committee is satisfied that a specialist firm with significant relevant experience was appointed.

There is a public drop-in tomorrow as part of the work to inform the draft Development Framework before it is published for public consultation.

The Committee has considered the responses to its consultation with committees identifying potential benefits of the development in accordance with the extant Resolution of the Assembly it is working to discharge. The responses highlighted a consensus view on the importance of the Development Framework in informing a decision regarding potential States' involvement.

The Committee has therefore decided to hold further work in abeyance and defer the submission of recommendations to the Assembly until after the Development Framework may be considered but will provide a further update in April in its 'Handover Report' forming part of the Future Guernsey Plan update. The Development Framework is the next critical element of the process and was not taken into consideration when the original timetable was established in States' debate.

Sir, in closing I would like to reflect on the work of this Assembly under its new Rules to manage its strategic priorities. In April the Policy & Resources Committee will bring the final policy letter reviewing the work of this Assembly.

It was this Assembly that established the 20-year Future Guernsey Plan with high level outcomes monitored and benchmarked against the OECD Better Life Index. Last month we learnt that we are doing well but there are issues; to start considering how to address these the Policy & Resources Committee intends to bring an 'Improving Living Standards' policy letter to the States before debate on the Plan.

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