World-leading finance expert calls for ‘mission-driven stewardship’

The current crisis gives Guernsey a once-in-a-lifetime opportunity to pause. To plan how we can grow our economy back bigger and more sustainably than before – to revive and truly thrive. But how can we pick the winning ideas and prioritise those initiatives that will lead to a step-change in Guernsey’s economy?

Attendees at our Mid-Term Debate heard from Natalie Jaresko, the Executive Director of the Puerto Rican Finance Oversight Board.

Natalie took time out of her busy schedule to share her thoughts on the opportunity that Guernsey has to Revive and Thrive and create genuine change.

She answered three key questions on topics that IoD members want their future Deputies to consider.

• The importance of cost control in the public sector
• What projects should be prioritised to generate economic growth
• How to measure the impact and ‘success’ of these projects

Question 1: What is the best size and structure for government in a small jurisdiction to optimise efficiency?

The issue is affordability – I don’t believe in taking on massive amounts of debt. You have to live within your means and that will define to a large extent what size government you can afford. To the extent that you can be more efficient by consolidating, within the Channel Islands, some of the services and reducing costs as a result - so much the better. But the question really is: ‘to what extent does your revenue structure allow you to have the size government that you have?’ If it does not, you have to rethink your business processes. You have to rethink your priorities. There may be some things you just stop doing in government, and there are others you will have to do differently. Whether by sharing services, or by simply using technology, or doing things in a different manner.

There is no easy answer to the question, but I urge you to look at your revenues, because your revenue line will define to a large extent what you can afford.

Question 2: How would you deploy the £250m loan facility to best effect in Guernsey?

As I mentioned during my opening remarks, the first thing I would do is focus on those vulnerable elements of the population that need urgent, immediate help. But after that, I would look at infrastructure. Infrastructure that will ensure resiliency and improve the opportunities for economic growth. I would focus first on broadband and the internet, because in today’s world what we understand is that this is a requirement for everyone to benefit. From telehealth and distance learning, to the fact you can’t compete in small business without good internet connectivity - and certainly your international finance sector and the population at large will benefit.

The second thing I would look at is transportation links. When the hurricane hit Puerto Rico, it really, really mattered how our transportation sector functioned. Transport links benefit business, tourism, trade and the population at large - and need to be as efficient and resilient as possible.

Question 3: How do you best measure successful delivery and output?

This is a very interesting question and very, very important - governments don’t always do this. There are a couple of rules that I keep in my mind:

·   if you don’t measure results, you can’t tell success from failure

·   if you can’t see success, you can’t reward it

·   if you can’t reward success, you are probably rewarding failure

·   if you can’t see success, you can’t learn from it and repeat it

·   if you can’t recognise failure, you can’t correct it

…and if you can demonstrate results, you can win public support for change, which is so critical.

I think there are a couple of ways to measure government efforts. One is if it’s a process, you want to measure process i.e. waiting times in an office – these are very black and white measurements. The second is output measures, i.e. the number of patients treated in an hour, or the number of people helped by the DVLA in an hour. The third one (much more important perhaps) are service quality measures. How do the people waiting in the DVLA queue feel? Are they happy with the outcome and happy with the process? Yes, it’s subjective, but I think these quality measures are critical.

And finally, outcome measures. After we make these investments, are we better off? Did we achieve what we were hoping to do?

There are a couple of other measures I would urge you to consider. Whenever doing a government programme, what is the economy? What is the cost, what is the efficiency? Are you doing it for the least cost? Remember, every dollar has value. Effectiveness - are you achieving your hoped objective, and equity – is it fair?

Here are her thoughts on the opportunities for Guernsey: