SRC Second Policy Letter – amendment 2

My second successful amendment related to the introduction of recognised accounting standards and making T&R to action what they had already been instructed to do. This is a subject I have raised several times in the States and I set out my speech below.


I take members back to March 2012 a time when some of us were here and other of us were keeping a close eye on what was going on here. I was in the latter camp and I remember very well when the States resolved to adopt Internationally recognised accounting standards and gave T&R the resources to bring them in.

Whilst for some this might not seem much to get excited about, for me, I saw this as one of the more important decisions of the last States.  BUT I can hear some of you say – that’s cos you’re an Accountant. BUT I would argue that this whole Assembly should get excited about this.

Why? Well, the report of the time makes it very clear. Paragrpah 1.2 states that;

The current accounting model has a number of deficiencies, the most significant of which is the failure to account for our fixed assets that is, our land, buildings and equipment which together are thought to be valued at in excess of £2 billion. Without this ability, neither the ongoing value of those assets nor the true cost of their use by Departments can be properly represented in our accounts. This leads to an opaque picture regarding the true cost of the services we deliver, a lack of focus on driving the best value from these assets and an inability to compare costs and financial performance year on year.

The benefits were stated as falling within 4 broad categories;

  • Accountability
  • Decision making
  • Comparability
  • And; better use of assets


In addition, the letter from the previous PAC appended to the report at the time is quite explicit. The accounts exclude the cost and details of assets held by SOG, as well as its contingent liabilities, such as pensions. And it is not just about what is set out in the revenue account or balance sheet, but also the notes to the accounts in order to compliant, which would include analysis of pay costs.

Remember this was a major feature of the Fundamental Spending Review, a spend to save initiative whereby better decisions could be made as a result of more accurate and complete information.

BUT the truth is that debate has happened, the policy letter was approved. It now needs to be actioned.

T&R were expected to report in the annual budgte about progress. Aside from welcoming the project and the move to multi-year budgets, there has been no report. Each year when the accounts have been debated I have stood up and said this could not happen soon enough but given no assurances that it would start any time soon.


I appreciate there have been a lot of other things happening, with the FTP and new SCIP process as an example. I am also acutely aware that this is not a simple task and needs suitably qualified and experienced personnel to make it happen.

However, the resources have already been agreed. They were sitting in the Fundeamntal Spending Review Fund but , as members will recall, have now moved to the Transformation and Transition Fund and the fact that they are is explicitly mentioned in paragraph 5.20 of the 2015 budget.

The question is, can we afford to wait? The longer this is delayed the longer we will perpetuate the current situation and, as far as I’m concerned, that is not acceptable. We will in the near future receive the 2014 accounts, great but be aware that these accounts don’t include a proper audit opinion. They do not state that they are true and fair. They can’t as they are not prepared in accordance with recognised accounting standards . All that our auditors can say is that they have been properly prepared in accordance with accounting policies of the States of Guernsey.

By the end of this year, States of Guernsey should have been preparing financial statements that are widely recognised and accepted on island and internationally that will result in making major improvements to information, accountability and basis on which decisions are made.  This is a spend to save initiative that, the longer we leave it the longer we can’t be sure whether or not we are wasting taxpayers’ money and so the sooner it begins in earnest the better.


I urge members to support this amendment.

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