Jersey politicians back plans for £50m Fiscal Stimulus Fund

Jersey's government will borrow £50 million to support businesses and speed up the island's recovery from coronavirus.

States members voted in favour of plans for a Fiscal Stimulus Fund, put forward by Treasury Minister Susie Pinel.

The policy is aimed at preventing unemployment levels from rising as the government's payroll co-funding scheme is gradually phased out.

The fund would be set up through the borrowing of £50 million from the £500 million 'revolving credit facility' which the government entered into in May to manage the financial impact of the pandemic.

What is the Fiscal Stimulus Fund?

The government will set up £50 million pot of funding, as part of a package of measures designed to boost the economic recovery from Covid-19 at a faster pace.

This money will go towards small projects to support local businesses and employment, which not-for-profit organisations, States Bodies and arms-length organisations would be able to bid for.

Funding will be capped at £5 million per project and the treasury says each application will have to satisfy the '3 T's':

• Timely: Projects should have 'realistic and credible plans' to be delivered by the end of December 2021 and ideally, should be completed within six to nine months of the date the funding is approved.

• Targeted: To gain funding, projects must support employment and activity in the island, provide assistance to those who have been most impacted by economic downturn or have an 'intrinsic benefit' to the island.

• Temporary: There should not be any long-term financial implications for the States and proposals should not contain commitments to ongoing or recurring costs.

£25 million of the funding will be available for projects from November 2020, with a second tranche of funding available for applications from February 2021.

The programme will be overseen by a Fiscal Stimulus Oversight Group.

States members also approved an amendment by Deputy Kirsten Morel, Chair of the Economic Affairs Scrutiny Panel, calling for those applying for funding to be transparent about how it would help islanders of all genders.

The plans for a Fiscal Stimulus Fund were challenged by Deputy Montfort Tadier, who said the application process was likely to be put forward as a substitute for organisations and businesses who had lost out on guaranteed funding, such as Elizabeth Castle.

Members of Reform also called for the system to be used to create the foundations for a green, living wage economy.