Guernsey's government considers borrowing money for key building projects

Guernsey's government may have to borrow money to fund its biggest building projects.

Its top political committee, Policy and Resources (P&R), say they are concerned that the cost of these key developments is far more than the island can afford - unless it uses up all its cash reserves.

"The committee is already considering borrowing as part of the overall solution," P&R explained.

"But crucially, this could only be on the basis that there is enough revenue to service that borrowing."

It follows a long-running debate of how best to balance the books as Guernsey's government wants to improve critical infrastructure such as the hospital and education facilities while also plugging an £85 million 'black hole' in its finances.

All tax reform plans were thrown out by politicians in February and the proposed introduction of a new Goods and Services Tax was dropped after a massive public backlash.

Policy and Resources have now announced a timetable for the States Assembly to debate the Government Work Plan, the Capital Portfolio - which is a list of key projects - and the Funding & Investment Plan.

"The bottom line is we need to ensure we are only doing work that is genuinely critical," Deputy Bob Murray from P&R said.

"And that we can pay for that without completely exhausting Guernsey’s reserves and leaving the community vulnerable. That’s what the debate on these plans will be about."

The plans will be debated in two stages, starting in July before revised proposals are brought to the States in late-September.

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