TYNWALD COURT
OFFICIAL REPORT
RECORTYS OIKOIL
QUAIYL TINVAAL
PROCEEDINGS
DAALTYN
HANSARD
Douglas, Tuesday, 21st June 2016
All published Official Reports can be found on the Tynwald website:
www.tynwald.org.im/business/hansard
Supplementary material provided subsequent to a sitting is also published to the website as a
Hansard Appendix. Reports, maps and other documents referred to in the course of debates may
be consulted on application to the Tynwald Library or the Clerk of Tynwald’s Office.
Volume 133, No. 12
ISSN 1742-2256
Published by the Office of the Clerk of Tynwald, Legislative Buildings,
Finch Road, Douglas, Isle of Man, IM1 3PW. © High Court of Tynwald, 2016
TYNWALD COURT, TUESDAY, 21st JUNE 2016
Present:
The President of Tynwald (Hon. C M Christian OBE)
In the Council:
The Lord Bishop of Sodor and Man (The Rt Rev. R M E Paterson),
The Acting Attorney General (Mr J L M Quinn),
Mr D M Anderson, Mr M R Coleman, Mr C G Corkish MBE, Mr D C Cretney,
Hon. T M Crookall, Mr R W Henderson, Mr J R Turner and Mr T P Wild,
with Mr J D C King, Deputy Clerk of Tynwald.
In the Keys:
The Speaker (Hon. S C Rodan) (Garff);
The Chief Minister (Hon. A R Bell CBE) (Ramsey);
Mr G G Boot (Glenfaba); Mr L I Singer (Ramsey);
Hon. W E Teare (Ayre); Mr A L Cannan (Michael); Mr R K Harmer (Peel);
Mr P Karran, Mr Z Hall and Mr D J Quirk (Onchan);
Hon. R H Quayle (Middle); Mr G R Peake (Douglas North);
Mrs K J Beecroft and Mr W M Malarkey (Douglas South);
Mr C R Robertshaw and Mr J Joughin (Douglas East);
Hon. J P Shimmin and Mr C C Thomas (Douglas West);
Hon. R A Ronan (Castletown); Mr G D Cregeen (Malew and Santon);
Hon. J P Watterson, Hon. L D Skelly and Hon. P A Gawne (Rushen);
with Mr R I S Phillips, Clerk of Tynwald.
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Business transacted
Welcome to His Excellency the Lieutenant-Governor, Sir Richard Gozney KCMG CVO ............ 1501
Leave of absence granted........................................................................................................... 1502
Papers laid before the Court ...................................................................................................... 1503
Bills for signature ........................................................................................................................ 1504
Declaration of interest by the President .................................................................................... 1505
Congratulations to the President and the Chief Minister on award of Queen’s Honours ......... 1505
Questions for Oral Answer ............................................................................................... 1505
1. UK’s Syrian Vulnerable Persons Resettlement Scheme – Island’s participation............. 1505
2. Social Security payments for accommodation – Value for money; policy development1508
3. Private sector pension schemes – Legislative protection ............................................... 1512
4. Electoral register – Legality of deletion of persons......................................................... 1516
5. TT Homestay – Regulations ............................................................................................. 1521
6. Enterprise Development Fund – Investment Monitoring Committee details ................ 1522
7. Meat Plant – Manager and subsidy ................................................................................ 1526
8. Medical consultants – Experience and knowledge ......................................................... 1530
9. Mr Paul Burnett’s inquiry into DHSC – Date of report .................................................... 1534
10. Vulnerable elderly people – Ensuring legislative protection ........................................ 1536
11. Driving-test applications and test dates – Average waiting times ................................ 1538
24. Regent Street Post Office – Long-term future .............................................................. 1539
12. Consumer Protection Act 1991 – Status of housing tenants ........................................ 1541
Questions for Written Answer .......................................................................................... 1544
13. Lord Lisvane’s Review – Intended procedure for July Tynwald .................................... 1544
14. Support for people in nursing, residential or community care –
Social Security expenditure ................................................................................................. 1544
15. Housing support – Social Security expenditure ............................................................ 1544
16. Means-testing policy – Operation and implementation ............................................... 1546
17. Public Services Commission Act 2015 – Statutory powers over public documents ..... 1546
18. Suspended Member of Tynwald – Whether legally disqualified .................................. 1547
19. Isle of Man Steam Packet Company – Details of proposed investment ....................... 1548
20. Raggatt Tip – Leachate contaminants ........................................................................... 1549
21. Private sector housing – Condition and plans............................................................... 1550
22. HM Prison Jurby – Population and staff ........................................................................ 1552
23. Proposed Peel regional sewerage works – Whole-life costings.................................... 1553
25. Means-testing policy – Options, action plan and timetable ......................................... 1553
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Order of the Day .............................................................................................................. 1555
4. Future of Property Taxation – Statement by a Member of the Treasury....................... 1555
The Court adjourned at 1.12 p.m. and resumed its sitting at 2.30 p.m. .................................... 1560
Procedural .................................................................................................................................. 1560
5. Dependability Ltd – Statement by the Minister for the Treasury .................................. 1560
6. Supplementary Vote – Department of Health and Social Care –
Expenditure approved ........................................................................................................ 1563
7. Salisbury Street Care Home – Purchase by DHSC – Expenditure approved ................... 1576
The Court adjourned at 4.59 p.m. and resumed its sitting at 5.27 p.m. .................................... 1592
Announcement of Royal Assent................................................................................................. 1592
8. Castletown and Port Erin Fire Stations – Replacement – Expenditure approved .......... 1593
9. Supplementary Capital Authorities – Expenditure approved......................................... 1597
10. Treasury Bonds Issue – Motion carried ........................................................................ 1600
11. Public Sector Pension Schemes – Report on Revised Proposals –
Debate commenced ........................................................................................................... 1612
Suspension of Standing Orders to complete Item 11 – Motion lost ......................................... 1628
The Court adjourned at 8.02 p.m. .............................................................................................. 1629
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Tynwald
The Court met at 10.30 a.m.
in the presence of His Excellency the Lieutenant-Governor,
Sir Richard Gozney KCMG CVO
[MADAM PRESIDENT in the Chair]
The Deputy Clerk: Hon. Members, please rise for the President of Tynwald.
The President: Moghrey mie, Hon. Members.
5
Members: Moghrey mie, Madam President.
The President: The Lord Bishop will lead us in prayer.
PRAYERS
The Lord Bishop
Welcome to His Excellency the Lieutenant-Governor,
Sir Richard Gozney KCMG CVO
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The President: Hon. Members, it is my pleasure on behalf of Tynwald Court to welcome His
Excellency the Lieutenant-Governor to the Tynwald Chamber. He has joined us this morning at
the first available opportunity since being sworn in as the Island's representative of Her Majesty
the Queen, Lord of Mann.
Your Excellency, welcome.
Though this is a parliamentary assembly of long duration, you do join us in the year which
marks the 150th anniversary of the passing of the Act which provided for the election of the
Members of the House of Keys – a relatively recent occurrence in our long parliamentary history.
But since that most fundamental change occurred, there have been many other significant
constitutional changes, one of the most recent being the removal of your duty to preside over
this Court. We have the odd day when I feel that you would be quite pleased about that,
(Laughter) but not too often, I hasten to add! Nevertheless, the fact that you do not preside
here does not dissociate you from any link with the work of the Chamber, and you are welcome
to witness our deliberations at any time.
Indeed, when attending your swearing-in we noted your express wish to work in tandem with
our Government in pursuit of the Island's aspirations: a statement which is much appreciated, I
am sure, by the Members of the Court and the Council of Ministers.
Your experience of island life will stand you in good stead, as you go out to meet the people
of our Island, explore its beauty and become steeped, I hope, in a unique cultural heritage. It is
something of a conundrum that people describe the pace of life as slower here, when there is so
much going on in terms of international, national and local politics, the arts, music, sport, school
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30
35
40
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50
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60
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activities and youth organisations, community work and a wide-ranging spectrum of business
and employment.
We are aware that both you and Lady Gozney have thrown yourselves straight into local
events at almost TT racing speed, something which has been very positively commented on. We
also know that you can enjoy a wonderful quality of life here in the Island and we hope that,
both in work and leisure, both you and Lady Gozney find that to be the case over the next five
years.
Welcome, sir, and may I invite you to address the Court.
The Lieutenant-Governor: Madam President, Hon. Members, thank you for your warm words
this morning, Madam President. Your welcome reflects, I think, a sense which my wife and I
have gained around the Island in our first three weeks, in Castletown, in Peel, Port St Mary, Port
Erin, in Ramsey and Andreas, as well as here in Douglas and Onchan. From their nests on the
cliffs of Maughold, even the puffins and razorbills flew out in welcome! (Laughter) I look forward
to visiting all the Isle of Man soon.
Today I come, Madam President, to pay my respects to the Court of Tynwald, a legislature
which is not only mature of age but, from what I hear, mature in its debate and decision-making.
Some other legislatures elsewhere might like to take note. (A Member: Hear, hear.)
To Tynwald, I shall listen attentively. Later in your legislative process, I shall give assent to
your new legislation on behalf of Her Majesty the Queen.
Of course, the Lieutenant-Governor's role is a formal one. As a diplomat for about 39 years,
my role in foreign parliaments was also to observe and to listen, but occasionally, I could
encourage debate. I once asked the former Speaker of the House of Commons, George Thomas
– or Lord Tonypandy after he had retired – to visit the little kingdom of Swaziland and to visit its
small and rather hesitant parliament. George Thomas was offered the president’s chair and the
speaker's chair and to spend a day with each house of that little parliament, passing on some of
his experience as the referee of debate in Westminster, ensuring the British government
ministers were held to account, or at least were held to reasonable account. In the local
newspaper there, its headline the next day summed up George Thomas quite well. The headline
ran: “‘Grill them till their knees knock’, says Thomas”. (Laughter)
Sadly, Swaziland's finance minister was a wayward man – not a prestigious ex-banker, I
hasten to add. He arranged for cars to be stolen to order from neighbouring South Africa. The
day after George Thomas's visit, questions from backbenchers in the parliament shamed him
into resignation.
In contrast, in the Isle of Man, Madam President, my role should be unquestioning. I signed
certificates for two pieces of legislation last week, and I realise, I hope, the special importance of
giving Royal Assent to your pending legislation before the final sitting of this Tynwald in a
month’s time.
Thank you.
The President: I thank you, Your Excellency, for attending this morning and for your remarks.
Members: Hear, hear.
Leave of absence granted
75
The President: Hon. Members, leave of absence has been given to the Hon. Member,
Mr Boot, after 5.30 today to conduct Government business.
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Papers laid before the Court
The President: I call on the Clerk to lay papers.
80
The Clerk: Ta mee cur roish y Whaiyl ny pabyryn enmyssit ayns ayrn nane jeh’n Chlaare
Obbyr.
I lay before the Court the papers listed at Item 1 of the Order Paper.
European Communities (Isle of Man) Act 1973
European Union (North Korea Sanctions) (Amendment) (No.2) Order 2016 [SD No
2016/0177]
European Union (North Korea Sanctions) (Amendment) (No.3) Order 2016 [SD No
2016/0190]
Cremation Act 1957
Cremation (Fees) Regulations 2016 [SD No 2016/0152]
Disability Discrimination Act 2006
Disability Discrimination (Guidance and Code of Practice) (Appointed Day) Order 2016 [SD
No 2016/0167]
Rehabilitation of Offenders Act 2001
Rehabilitation of Offenders Act 2001 (Exceptions) (Immigration and Nationality) Order
2016 [SD No 2016/0150]
Highways Act 1986
Highway Diversion (Public Right of Way 320, Meary Voar, Santon) Order 2016 [SD No
2016/0136]
Income Tax Act 1970
Taxes (British Virgin Islands) Order 2016 [SD No 2016/0165]
Customs and Excise Act 1993
Export Control (Iran Sanctions) Order 2016 [SD No 2016/0159]
Representation of the People Act 1995
Elections Fees Order 2016 [SD No 2016/0176]
Social Security Act 2000
Social Security Legislation (Benefits) (Application) Order 2016 [SD No 2016/0118]
Social Security Legislation (Benefits) (Application) (No.2) Order 2016 [SD No 2016/0119]
Retirement Pension (Premium) (Amendment) Order 2016 [SD No 2016/0161]
Reports
Fairness and Sustainability of Public Sector Pension Schemes – Revised Proposals
[GD No 2016/0033]
Greater efficiency, Cleaner energy, Resilient economy – A Climate Challenge Mitigation Strategy
for the Isle of Man 2016-2020 [GD No 2016/0031]
Tynwald Honours Committee – First Report for the Session 2015-2016 [PP No 2016/0099]
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The remaining items are not the subject of motions on the Order Paper
Documents subject to negative resolution
European Communities (Isle of Man) Act 1973
European Union (North Korea Sanctions) (Amendment) (No.2) Regulations 2016 [SD No
2016/0178]
European Union (North Korea Sanctions) (Amendment) (No.3) Regulations 2016 [SD No
2016/0191]
Documents subject to no procedure
Currency Act 1992
Currency (TT Legends) (50 Pence Coins) Order 2016 [SD No 2016/0166]
Appointed Day Order
Financial Intelligence Unit Act 2016
Financial Intelligence Unit Act 2016 (Appointed Day) Order 2016 [SD No 2016/0148]
Terrorism and Crime (Miscellaneous Amendments) Acts 2016
Terrorism and Crime (Miscellaneous Amendments) Acts 2016 (Appointed Day) Order 2017
[SD No 2016/0149]
Criminal Procedure and investigations Act 2016
Criminal Procedure and Investigations Act 2016 (Appointed Day) Order 2016 [SD No
2016/0181]
Reports
Council of Ministers Response to the Report of the Select Committee on the First Time Buyer
arrangements at Harcroft Meadows (Petition for Redress) 2015-16 [GD No 2016/0029] e
Council of Ministers Annual Report of the Isle of Man Government Preservation of War
Memorials Committee [GD No 2016/0026]
Report of the Select Committee on the Operation of the Jury System 2015-2016
[PP No 2016/0100]
Social Affairs Policy Review Committee Second Report for the Session 2015-16 – Progress with
Inquiries [PP No 2016/0098]
Social Affairs Policy Review Committee Third Report for the Session 2015-16 – Children and
Families Social Services [PP No 2016/0103]
e
laid electronically
Bills for signature
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The President: Hon. Members, I have to announce that the following Bills are ready for
signature: the Marriage and Civil Partnership (Amendment) Bill 2016; the Concessionary Travel
Schemes Bill 2015; the Police (Amendment) Bill 2015; the Preferential Payments (Amendment)
Bill 2016; and the Road Races Bill 2015.
With the agreement of the Court, they will be circulated for signing while we proceed with
other businesses. Is that agreed?
Members: Agreed.
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Declaration of interest by the President
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The President: Turning now to our Order Paper, Members, before we embark on the motions
tabled for today, I have to declare an interest in a matter for debate later on in the Order Paper
at Item 33, in that I was at one time a director of the company which is a subsidiary of
ScottishPower and is mentioned in the motion.
I shall vacate the Chair when that comes up for debate and hand over to the Deputy
President.
To come to Item 3, Hon. Members, we turn to our Question Paper. I call on the Lord Bishop.
Congratulations to the President and the Chief Minister
on award of Queen’s Honours
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The Speaker: Madam President, before the formal business gets underway, may I, on behalf
of the Hon. Court, offer you warmest congratulations on the richly deserved honour of OBE,
which you received in Her Majesty’s the Queen’s Birthday Honours list.
And in similar vein, on behalf of the Court, warmest congratulations to the Chief Minister on
his award of CBE in the Honours list.
Several Members: Hear, hear.
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The President: Thank you very much, Mr Speaker.
Questions for Oral Answer
CHIEF MINISTER
1. UK’s Syrian Vulnerable Persons Resettlement Scheme –
Island’s participation
The Hon. Member of the Council, the Lord Bishop, to ask the Chief Minister:
To what extent the Island will participate in the UK Government’s Syrian Vulnerable Persons
Resettlement Scheme?
The President: Question 1, I call on the Lord Bishop.
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The Lord Bishop: Thank you, Madam President.
This is Refugee Week, and I wish to ask the Chief Minister to what extent the Island will
participate in the UK Government’s Syrian Vulnerable Persons Resettlement Scheme?
The President: Chief Minister to reply.
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The Chief Minister (Mr Bell): Madam President, the Isle of Man supports Syrian refugees
through the provision of funding by the Council of Ministers’ International Development
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Committee to international charities, rather than through participation of the UK government’s
resettlement programme. Over the last five years this has totalled £544,417.
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The President: Supplementary question, Lord Bishop.
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The Lord Bishop: Thank you, Madam President.
I would like to ask the Chief Minister whether the Council of Ministers has considered the
possibility of finding homes on a pro-rata basis parallel to the proportion in the United Kingdom.
The President: Chief Minister.
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The Chief Minister: These issues have been considered, and are still being considered in
different forms, Madam President.
We have taken advice from the United Kingdom. In particular, I have had meetings with the
Scottish Refugee Council to understand the mechanics of dealing with Syrian refugees and we
also have dialogue with our counterparts in Jersey and Guernsey, who are going through the
same thing.
At this stage though, we believe on the advice we have received, it would be problematic for
the Isle of Man at this stage to take further refugees, bearing in mind the potential problems
which might arise through that. In many cases the refugees, particularly children, are
traumatised and the Isle of Man does not necessarily have the level of support and expertise on
the Island to be able to deal with this. We also have problems legislatively in terms of providing
housing, or Government housing at least, and benefit support for these groups.
The issue is kept under surveillance, but at the moment there are no immediate plans for
taking any further refugees.
The President: The Hon. Member, Mr Karran.
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Mr Karran: Eaghtyrane, in light of the tragic murder of the UK MP, Jo Cox, known for her
campaigning to support refugees in desperate need, would the Ard-shirveishagh consider
whether, as a small Celtic nation, this Island could work with the UK authorities and charities,
such as Home for Good, to find ways to enable a small number of unaccompanied Syrian refugee
children that have landed in the adjacent island, in the UK, to be accommodated; if appropriate,
also for the fostering or adoption on the Island?
I hope that the Ard-shirveishagh will consider this, as I think this should be above politics,
even in this present time. These children – we would want this happening if it was our children,
unaccompanied into a country, where they have had to leave for their own safety.
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The President: Chief Minister to reply.
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The Chief Minister: Madam President, I fully appreciate the sentiment behind the Hon.
Member’s questioning, and I have a huge amount of sympathy with it.
But the problems relating to bringing in unaccompanied children, who do not speak the
language necessarily, who are traumatised by war or simply the journey to get here in the first
place: it is not simply bringing them in and giving them a home. I am sure there are very many
loving homes on the Isle of Man who would consider such a thing, but we need to think of
practicalities for the welfare of the children, rather than anything else.
To bring them to a community like this where there is no link culturally or linguistically, and
suffering, as I say, potentially from the trauma of the journey and the experience before they
came here, it would appear at the moment, on the advice we have had, inadvisable to bring in
unaccompanied children without a fully structured support mechanism behind to give the
support they need.
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The President: Supplementary question, Mr Karran.
Mr Karran: Vainstyr Loayreyder.
Thanking the Ard-shirveishagh as far as the advice that has been given, but is this from the
UK authorities? Where is this from as far as the information is concerned?
Allowing for the fact that many of us need to appreciate – whilst it will not be popular – the
fact that if we had unaccompanied children leaving this small nation I would hope that
somebody would be trying to do something in order to protect them and put them into a place
of safety.
Allowing for the fact that we do have children who have awful trauma that we have to deal
with on the Island: who have no fathers, who have drug addict mothers, who have basically
been feral half of the time – we should be trying to see what can be done.
The President: Chief Minister.
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The Chief Minister: Madam President, I am not answering these questions from any specific
political view point at all. It is purely based on the welfare of the children and the advice we
have had from the United Kingdom, particularly from Scotland, who have been at the forefront
in fact of facilitating Syrian refugee relocations.
But again, as I have answered already, Madam President, the advice we have had, because of
the need to put a strong support mechanism behind these young people, if they were to come
here, would make it inappropriate at this time.
I would add that Jersey and Guernsey have gone through the same process and have run into
the same problems there on the advice that they have, and they equally are very enthusiastic to
try and help young people. But it would be counterproductive to bring a number of traumatised,
young, unaccompanied children to the Isle of Man, only to find then we have to send them back
to Liverpool or other areas in the United Kingdom who have better experience of trauma.
So it is not an easy, straightforward answer. Speaking from the heart, I am sure everyone
would want to embrace the opportunity to help these desperate people. (A Member: Hear,
hear.) But it has to be a properly thought through and structured support that we put in place,
otherwise, frankly, the whole thing could be counterproductive and that would be the worst
outcome that we could possibly have.
The President: The Lord Bishop.
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The Lord Bishop: Thank you, Madam President.
I am extremely grateful to the Chief Minister for his replies and for his sympathetic approach.
Considering that the UK Resettlement Programme would mean for the Isle of Man one family
per year, which is a very small proportion of our population, and given that the Island is an
extraordinarily good place for the nurture of children, compared with almost anywhere else in
Europe, would the Chief Minister not reconsider the Island playing its part in the resettlement of
those unaccompanied migrant children who have arrived in Europe before 20th March this year,
which is the UK’s benchmark? Simply because the Isle of Man is a great deal better a place to
bring up children than a refugee camp in Greece (A Member: Hear, hear.) or Italy or France.
The President: The Chief Minister.
The Chief Minister: I cannot add much more than I have already said, Madam President.
I have a huge amount of sympathy on this issue, and if there is an opportunity for the Isle of
Man to review the situation through the UK – because obviously all refugees coming in to the
Isle of Man would have to come through the United Kingdom in the first place – through their
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own immigration and refugee processing systems. If there are opportunities, then certainly we
will look at them.
TREASURY
2. Social Security payments for accommodation –
Value for money; policy development
The Hon. Member for Douglas West (Mr Thomas) to ask the Minister for the Treasury:
How Treasury secures value for money in respect of Social Security payments for
accommodation; and whether policy and practice has developed since its August 2014
submission to the House of Keys Landlord and Tenant (Private Housing) Bill Committee?
The President: Question 2: I call on the Hon. Member for Douglas West, Mr Thomas.
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Mr Thomas: Thank you, Madam President.
I beg leave to ask the Treasury Minister how Treasury secures value for money in respect of
Social Security payments for accommodation and whether policy and practice has developed
since its August 2014 submission to the House of Keys’ Landlord and Tenant (Private Housing)
Bill Committee?
235
The President: The Treasury Minister to reply.
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The Minister for the Treasury (Mr Teare): Thank you, Madam President.
Treasury has no role to play in allocating or selecting accommodation for benefit claimants.
That responsibility rests with other agencies in central and local Government and, indeed,
benefit claimants themselves. Furthermore, Treasury has no control over whether a benefit
claimant chooses to enter into a tenancy agreement and it is not a party to any such agreement.
Consequently, it is not within Treasury’s remit to negotiate rents; rather, its role is one of
gatekeeper: ensuring that only reasonable amounts are paid through benefits to support the
payment of claimants’ housing costs.
Treasury’s policies and practices have not changed since its submission to the Committee in
August 2014, save that the cap on allowable housing costs for income-related purposes now
applies equally in relation to publicly owned properties as it does to properties rented in the
commercial sector.
Thank you, Madam President.
The President: Supplementary question, Mr Thomas.
255
Mr Thomas: Thank you very much, Madam President.
Most of that answer from the Treasury Minister was actually identical to the submission to
the Landlord and Tenant Committee back in 2014, and is disappointing in that £20 million at that
point was spent on housing-related benefits. That seems a vast amount of money compared to
things like Incapacity Benefit and Disability Living Allowance.
Will the Treasury Minister reconsider that answer?
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The President: Treasury Minister.
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The Minister: First of all, could I just highlight that it is not £20 million. It is actually: in the
commercial sector, we estimate that around £6.5 million of rent expenditure is incurred; in the
public sector, it is about £8 million of expenditure that is incurred in respect of rent.
We have no proposals at the moment to review our present position, sir.
The President: Supplementary.
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Mr Thomas: Thank you.
It was £20 million in the information provided to the Committee and I appreciate the update
on the information in more recent times.
In the case that the Treasury does not really follow up these matters very much, why is it
then that the Treasury asks on Form A21 – reissued in June 2015 – all about the types of
tenancy, the landlord details, the address, the details of the property, the nature of the
relationship? What is the point of Treasury collecting that information if it is not actually
concerned about these issues and value for money issues?
The President: The Treasury Minister.
280
The Minister: Actually, the amount of support given depends on the composition of the
household and it varies between the family type, going from a single claimant with no children
up to a lone parent or couple with three or more children. In effect, what we are trying to do is
to make support available which is appropriate to the needs of the family unit.
285
The President: The Hon. Member, Mr Karran.
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Mr Karran: Eaghtyrane, can the Shirveishagh tell us how much we are actually paying out in
Social Security payments for accommodation in the last three years, allowing for the fact it is
£6.5 million and £8 million as far as the public sector last year?
Would this be a reflection on the fact that there is insufficient public sector housing or is it
the problem of the fact of successive Governments being too much in bed with the developers:
making the agenda for them, instead of a property-owning and fair-rental society that we want?
In light of the considerable amount of money being spent, what steps are being taken to
bring in minimum standards of enforcement to maintain private sector rental accommodation,
in order that the public purse is actually getting value for money and not ending up paying more
in social costs, with people having Social Services’ intervention in the long term because of it?
The President: Treasury Minister.
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The Minister: Interestingly enough, the Landlord and Tenant Bill would have certainly helped
that, in my opinion. To say now that we should be doing something is somewhat disingenuous,
putting it politely. Certainly another place had an opportunity to consider the legislation
governing private sector housing and it did not take that, so unfortunately we are where we are.
305
The President: Hon. Member, Mr Cretney.
310
Mr Cretney: Yes, similar to the Hon. Member for Onchan, Mr Karran, I would like to ask the
Minister: does he agree with me that money invested in more local authority and sheltered
housing accommodation would be more beneficial to many people?
The President: The Treasury Minister.
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The Minister: I would certainly agree with that. The difficulty is that, in addition to the direct
rent paid – and about 30% of public sector housing costs are now met by, in effect, the benefit
system – it would certainly be better, if we could afford it, but there is a very substantial housing
deficiency at the moment and it will be up to this Hon. Court to decide the allocation of
resources going forward.
The President: The Hon. Member, Mr Thomas.
Mr Thomas: Thank you very much, Madam President.
In fact, the housing deficiency is £5 million, as it has been for the last three or four years, so I
think it has fallen in real terms.
With the amount of information that the Treasury Minister collects through his officers about
tenancy and type of accommodation, I think he would be able to populate the landlord register.
Can I repeat the question, which is: why is all that information collected in Form A21, because it
certainly is not necessary to understand how many children an applicant has?
The second point is: does the Treasury Minister not agree that £20 million down to
£15 million is quite a substantial decrease in housing payments? And the Treasury Department
should be investigating why that has happened, if it has happened.
The President: Treasury Minister.
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The Minister: I am not prepared to take on any further research because at times we can be
bogged down by more and more research without focusing on the individuals involved. That is
the reason why we ask for this information on the housing form: because I am sure we would
not want to see a family with three or more children who have to live in the same bedroom.
What we are trying to do is to identify whether their housing needs are being met as far as we
can achieve that.
The President: The Hon. Member, Mr Karran.
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Mr Karran: Eaghtyrane, would the Shirveishagh Tashtee not agree that there is no excuse
because the Bill has failed? Unfortunately, obviously a full Public Gallery might have an effect as
far as that issue rather than the usual reliance of a block vote.
Does he not feel that we owe it as a duty of care to this section of the community who are
having to live in considerably substandard conditions that we would not feel acceptable; that we
are not bringing in some sort of criteria as far as minimum standards (A Member: Hear, hear.)
and that the public purse is subsidising some of this accommodation?
Would the Shirveishagh also remind me and remind us of the initiatives that the Government
has taken – to be fair to the Government – on the issue of £114, or thereabouts, single person’s
housing allowance, which you would have to be a genius or very lucky to find anything decent?
What are we doing to help those single people who are actually stuck – because of low pay –
in the poverty trap of not being able to get out of benefit to go to work because they cannot
have anywhere to live?
The President: The Chief Minister. Sorry, Minister for the Treasury.
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A Member: Another Freudian slip!
The Minister: There were several issues raised by the Hon. Member who has just resumed
his seat.
I was not putting it forward as an excuse: the failure of the landlord and tenancy legislation. It
is a reason; it is not an excuse.
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We certainly owe a duty of care, but another place, when they considered the legislation, did
not seem to take that duty of care into account.
The issues raised by the Hon. Member and others, I think, once again give further impetus for
a full review of the benefit system and that is something the Treasury is bringing forward at the
moment.
What have we done for the low paid? We have actually raised the minimum wage, which is a
positive step to encourage people to get back into work. The Hon. Member is shaking his head. I
hope it does not fall off!
I am just thinking to myself that the margin now between benefits and being in work is higher
than it has ever been, so there is a positive incentive now to take up work, and with the low
number currently unemployed and the job vacancies there are major opportunities to engage in
the workplace.
The President: The Hon. Member, Mr Henderson.
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Mr Henderson: Gura mie eu, Eaghtyrane.
Would the Treasury Minister agree with me that the funding outlined in his answers today
shows a complete social commitment to those less fortunate than ourselves and to that
particular group in our society?
And would he further agree that in the progression of looking at sheltered accommodation
and so on, we only have to look at Treasury’s commitment to the likes of the refurbishment and
rebuilding of Willaston at the minute, which does include a look at the possible sheltered
housing, small flats and so on?
The President: Minister.
The Minister: I think that the Hon. Member who has just resumed his seat has hit the nail on
the head.
We need to recognise that we need appropriate housing for people at the appropriate times
in their lives. Whether it be first-time-buyer-type accommodation, people starting out on their
own, starting a young family, as their family increases their housing needs increase, and then as
the family leaves home their needs decrease, and there should be alternative accommodation
provided at that stage. So I think it needs to be looked at in a more holistic approach, rather
than just one particular section.
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The President: Final supplementary, Mr Karran.
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Mr Karran: Eaghtyrane, would the Shirveishagh not take the experience of actually going and
living on the living wage and go out and rent somewhere decent for your wife and your kids or
your husband and your kids, and then come back and try and belittle this important issue?
Would the Shirveishagh consider circulating to Hon. Members what is the living wage at the
present time for 40 hours a week; what is the average accommodation and standards as far as
that is concerned and then reflect on his arrogant reply as far as this important issue?
Would the Shirveishagh also consider – whilst recognising what has been done as far as the
minimum wage is concerned and other benefits – we still have a deficit as far as single people
being able to get decent accommodation and to be able to get off benefits to be able to find
somewhere to have a basic commodity of life?
Finally, would the Shirveishagh consider – in order that it is a two-way street to protect
landlords – that the Treasury Minister should investigate the system operated in Australia where
prospective tenants provide evidence of their track record when they apply, in order to help us
have a fair level, playing field as far as tenant and landlord are concerned?
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The President: Minister to reply.
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The Minister: I did not, and I do not think I belittled anything that the Hon. Member said, and
I feel that we have taken positive steps to help the vulnerable. But what we are seeing really is
that there is a growing demand, but we have to encourage people to help themselves as well.
That is why we have increased the margin between benefits and the minimum wage to provide a
better incentive to gain employment.
Now, he did say in his final supplementary question that we should follow the Australian
system whereby tenants –
Mr Karran: I said you should investigate.
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The Minister: Sorry, we should investigate the Australian system whereby tenants are
encouraged or asked to provide their history as tenants to a potential landlord. But I would
suggest to the Hon. Member that the potential landlord would undertake their own due
diligence which would include that.
Mr Karran: You are not allowed to do it.
3. Private sector pension schemes –
Legislative protection
The Hon. Member for Onchan (Mr Karran) to ask the Minister for the Treasury:
What plan the Treasury Minister has to bring in the same legislative protection for pension
schemes in the private sector as exists in the UK?
The President: Question 3, Hon. Members, the Hon. Member for Onchan, Mr Karran.
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Mr Karran: Eaghtyrane, what plans the Shirveishagh Tashtee has to bring in the same
legislative protection for pension schemes in the private sector as exists in the UK?
I so ask.
The President: The Minister for the Treasury to reply.
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The Minister for the Treasury (Mr Teare): Thank you, Madam President.
The UK Protection Fund is a statutory fund run by the board of the Pension Protection Fund.
The statutory corporation was established under the provisions of the Pension Act 2004, an Act
of Parliament. The Pension Protection Fund (PPF) provides certain protections to the members
of defined benefit occupational pension schemes where there is a qualifying insolvency event in
relation to the employer. It is funded by a levy from all participating schemes. Participation is
compulsory for eligible schemes and annual levies are charged on all eligible schemes on a
compulsory basis.
The Treasury at this time has no plans to bring in the same legislative protection for pension
schemes for the handful of defined benefit occupational schemes on the Island as exists in the
UK, since the sector is not sufficiently large enough to support the potential obligation and a call
may impair the viability of all participating schemes.
Thank you, Madam President.
The President: Supplementary question, Mr Karran.
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Mr Karran: Thanking the Shirveishagh Tashtee for his reply.
Does he feel that – whilst I can understand the viability as far as bringing in a levy scheme
could be questionable as far as the amount that would be due on the others – this issue would
be far better being looked at on a proactive basis than when we had the crazy situation when we
had KSF, when we had almost a Dutch auction of how far we were prepared to have an open
cheque book as far as that issue is concerned, and mercifully we were very fortunate over that
issue?
So, would he not agree that maybe we should be looking at what can be done instead of
ending up in a crisis position at a later date on this issue, even allowing for the very concerning
situations that the next administration are going to have as far as funding is concerned?
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The President: Treasury Minister.
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The Minister: I think the problem here is, as identified in my original Answer, the sector is too
small. What I would not want to see is to encourage more private sector employers to close
their existing pension schemes.
The President: The Hon. Member for Michael, Mr Cannan.
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Mr Cannan: Thank you, Madam President.
Does the Treasury Minister acknowledge that the Pension Protection Fund in the United
Kingdom was set up to assist employees in defined benefit schemes and to assist companies or
employees unable to meet the consequence of insolvency from companies unable to meet
spiralling liabilities in respect of defined benefit and final salary schemes?
Can I ask the Treasury Minister is he aware of any schemes on the Isle of Man, either in the
private or public sector, facing this situation?
The President: Minister.
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The Minister: I do not have access to individual taxpayers’ information, and this would fall
part of that: pension schemes. So I do not have the individual information from a professional
point of view, but anecdotally I understand that some pension schemes are currently in deficit.
Now, that deficit in some ways is an accounting issue, because the current level of interest
rates is increasing the amount of capital that an employer needs to set aside in their pension
fund or their pension scheme to provide a pension on a pre-determined basis for their
employees.
The President: Supplementary, Mr Cannan.
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Mr Cannan: Thank you, Madam President.
Is the Treasury Minister aware that the Pension Protection Fund’s financial assistance scheme
is now, or will be, closing to new schemes in its entirety in September 2016?
Is he also aware that there are no pension schemes in the top 100 companies in the Financial
Times Stock Exchange offering a guaranteed pension based on final salary that are open to new
members? And does he endorse the closing of the schemes and the closing of the financial
assistance scheme to new entrants as a solution to the growing crisis of liabilities in the defined
benefit scheme arena?
The President: Minister.
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The Minister: The Hon. Member has come up with quite a few assertions there.
Unfortunately, I have not undertaken research into the UK scheme; I am more concerned with
what happens in the Isle of Man.
The President: The Hon. Member, Mrs Beecroft.
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Mrs Beecroft: Thank you, Madam President.
Could the Treasury Minister confirm whether he believes it likely that this sector would grow,
given that it is too small at the moment? Could he confirm whether he thinks that this sector in
the Isle of Man is likely to grow, given that it is very small at the moment, and that very few
entities are actually giving a defined benefit scheme going forward – a lot of them are closing. So
I would have thought that there is little chance of it actually happening here, because the sector
would hardly be likely to grow, would it?
The President: Minister.
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The Minister: Well, certainly, the defined benefits scheme is highly unlikely to grow, and part
of that has been changes to the taxation policy in the UK.
The Hon. Member will be aware that we have floated a proposal for workplace pensions
going forward. It is part of the workstream that we have underway, although it is not in the first
phase, to reorganise the benefit system. So I think really that we are looking at how we can
enable people, to provide an adequate income for them in their retirement, which has to be the
main objective.
The President: The Hon. Member, Mr Thomas.
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Mr Thomas: Thank you, Madam President.
In respect of defined contribution pension schemes, can the Treasury Minister confirm that
Treasury does actually know how many of those there are? I am hoping so, because there is a
contracting-out element to all of this.
Secondly can the Treasury Minister comment on the fact that it might be that people like the
Steam Packet pensioners worry that there are not these sorts of protections in place when they
decide and make up their mind about things like the sea services user agreement and the
current Steam Packet User Agreement?
The President: Treasury Minister.
The Minister: I think really the pensions issue is a very difficult one. I do have considerable
sympathy with those who are members of a pension scheme which is not fully funded.
But as I did say, changes in interest rates will have an impact on the funding liability of
pensions.
The President: The Hon. Member, Mr Karran.
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Mr Karran: Eaghtyrane, would the Shirveishagh agree that whilst the 3% increase in the stock
market the other day will be of great cheer as far as pension funds are concerned, and we
appreciate the fact of the volatility of the pension funds and we need confidence, if we are to
create and follow the United Kingdom in new works pension schemes, to try and make them tax
effective to help people to create private-sector pensions, surely we need to be looking at this
sort of legislation that they have got in the United Kingdom and be proactive to make sure that
there is actually some sort of basis of protection, so that we do not end up with people feeling
that they have been ripped off at a later date when the funds are not there to do so?
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The President: Minister.
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The Minister: The final part of the Hon. Member’s question, I think goes back to what I said
in my original Answer: there are too few schemes in operation in the Island to make a protection
scheme funded by the existing schemes viable.
He did mention that the increase in the stock market will bring some relief to pension
schemes. It is not only that; it is the yield on long-dated British government securities, gilts,
which tends to be the benchmark.
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The President: The Hon. Member, Mr Cannan.
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Mr Cannan: I am very surprised that the Treasury Minister either does not know or is not
interested in what is going on in the rest of the world with respect to pensions, but if he takes it
from me that it is well documented that in the United Kingdom particularly there are now
almost no businesses offering a guaranteed pension based on final salary that are open to new
members, can I ask him – accepting that fact – does he endorse closing these schemes to new
members as a solution for these companies?
The President: Minister.
The Minister: That has to be a decision for the individual employers. But what I would say is
that the taxation policy introduced by Gordon Brown when he was Chancellor some years ago
led to the closure of a significant number of final salary pension schemes.
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The President: The Hon. Member, Mr Quirk.
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Mr Quirk: Thank you, Madam President.
Would the Treasury Minister not agree with me, though, that we should be encouraging the
next generations forward to seek provision for their future? Would he endorse those who are
the next generation seeking advice and good advice? (Interjection by Mr Karran)
The President: Minister.
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The Minister: I think it is vitally important that those people – certainly the younger people –
should be encouraged to think about their future financial security and saving for retirement.
Unfortunately when people are young, it is like lots of other things: ‘it can never happen to
me and I will push that off and push that off until I have time to look at it’.
But certainly the sooner you start, the quicker that the benefits build up, and I would
certainly encourage people to start as soon as they can.
The President: Final supplementary, Mr Harmer.
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Mr Harmer: Thank you, Madam President.
Would the Minister agree with me that the workplace pensions are vitally important and the
whole issue of defined benefit, defined contributions need to be treated in the round? We need
more information to understand how those work together.
Would he also agree with me that we need to look at the whole situation, and actually make
them attractive so that the whole concept of just having a fund and an annuity needs to be
viewed in the round with defined benefit and defined contribution schemes.
The President: Minister.
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The Minister: I certainly agree with the Hon. Member who has just resumed his seat. This is a
very complex area and the trouble is, too, that we are working with in effect, three classes of
people or three types of people: those who have a defined benefit scheme; those who have a
defined contribution scheme; and those who have no schemes at all, and need to be encouraged
to save for the future.
So I am quite strongly in favour of introducing workplace pensions to bring in a safety net.
The data that we have at the moment is that about 30% of employed people on the Island are
actually in some sort of pension scheme. What we want to do is to widen as far as possible to
ensure that when people enter into retirement, they have an adequate income to fund their
retirement and also that they do not have to fall back on the state.
So from my point of view, as Treasury Minister, that is a win-win situation.
HM ACTING ATTORNEY GENERAL
4. Electoral register –
Legality of deletion of persons
The Hon. Member for Douglas South (Mrs Beecroft) to ask HM Acting Attorney General:
Whether those who were deleted from the electoral register without having been informed in
advance and without being informed of their right to request a hearing to appeal the decision
were deleted lawfully; and if not, what recourse they have?
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The President: Question 4, the Hon. Member for Douglas South, Mrs Beecroft.
Mrs Beecroft: Thank you, Madam President.
May I ask Her Majesty’s Acting Attorney General, whether those who are deleted from the
electoral register without having been informed in advance and without being informed of their
right to request a hearing to appeal the decision were lawfully deleted; and if not, what recourse
they have?
The President: Learned Acting Attorney General.
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The Acting Attorney General: Thank you, Madam President.
I am aware that certain issues have arisen in relation to the electoral register, and I
understand that as the general election approaches, the Electoral Registration Officer has made
considerable efforts to ensure that persons understand their responsibilities in respect of the
electoral register.
There are many scenarios where someone may be concerned that they have been incorrectly
removed and there are different forms of redress. Should an individual be concerned about their
inclusion or non-inclusion on the electoral register, the Registration of Electors Act provides for
them to make a claim in writing to the Electoral Registration Officer.
There is a statutory provision which provides a right for any person who claims to be entitled
to be entered in the register, or to a person or persons to object to certain others being so
entered at section 9 of the Registration of Electors Act 2006. Subsection (5) of section 10
provides for a right of hearing under the provisions of schedule 1 to the Act, which proceedings
would be heard by the High Bailiff. There is also a right of appeal against the decision of the High
Bailiff in this regard.
Section 11 of the same Act makes provision for the Electoral Registration Officer to make
alterations to the electoral register in a number of scenarios, which include setting out the
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process to be followed depending on whether the alteration is one made under scenarios
described in subsection (1) or subsection (2) of section 11.
I am not aware of any current complaint where electors being deleted from the electoral
register without being informed in advance by the Electoral Registration Officer of the
requirement to return the registration form and of the consequence of failing to do so, which
could result in their being deleted from the electoral register.
In common with other administrative decisions, if there is evidence that the appropriate
process has not been followed correctly in any given circumstance that is not provided for in the
legislation, it may be that a doleance claim could be brought, in which the court would judicially
review the case. However, it should be noted that doleance is intended to be a speedy remedy
and the Rules of the High Court of Justice 2009 require a claim to be brought within three
months. Whether such a claim could be brought in a particular case is a matter on which the
individual concerned would have to take their own legal advice. It is not a matter upon which I
could properly comment.
Thank you, Madam President.
The President: Supplementary, Mrs Beecroft.
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Mrs Beecroft: Thank you, Madam President, and I thank the Acting Attorney General for that
lengthy reply.
I am also glad to hear that there are no current complaints at the moment, but – and maybe I
missed it – I did not actually hear the definitive answer to the first part of my Question, which
was: where people have been deleted without having been informed in advance and without
being informed of their right to request a hearing to appeal the decision, were they deleted
lawfully? So it is not to do with any particular complaint or anything else; it is a question of law.
If this had happened, and they have not been told, and they have not been informed in advance
and without being informed of their right to request a hearing, was their deletion legal? I think
that is the bit that I am trying to get at.
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The President: Learned Acting Attorney General.
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The Acting Attorney General: Thank you, Madam President.
I am sorry to the Hon. Member if I have not actually dealt with the specific point which she
wanted me to address. I tried to do so by outlining the statutory provisions under which a
person who has been included or not included can make a claim, so that their first recourse
would be to make a claim or to write to the Electoral Registration Officer and to bring the matter
to the officer's attention and if not satisfied, they could make a claim, which would then end up
before the High Bailiff.
What I cannot do is make a general comment as to the legality which might apply, because of
course, as I have outlined again, in addition to the statutory provisions with reference to making
a claim regarding their inclusion or non-inclusion, is a provision, if there has been any
administrative failure, to make a claim for a judicial review by way of petition of doleance.
The fact of the matter, as I understand it, is that publicity was issued to everyone concerning
their obligation to complete their registration – the canvass form which was sent out to the
public. That form indicated in clear and unequivocal terms their statutory responsibility and the
potential effect, which could be the removal from the register, if they fail to comply with their
statutory duty.
The President: The Hon. Member, Mr Cretney.
Mr Cretney: Could I ask the learned Acting Attorney General whether he agrees that for
some members of the public this may be a complicated and potentially expensive remedy?
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Would he consider whether the previous practice where, in particular in election years, agents
acting on behalf the Treasury would do a manual assessment at people's houses to make sure
that the lists were accurate … would he agree with me that that might be a resolution?
The President: Learned Acting Attorney General.
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The Acting Attorney General: Thank you, Madam President.
I entirely agree that the legislation which is currently in place requires a wholesale review. It
requires clarification and it requires modernisation.
What I can say to Hon. Members is that the Cabinet Office has engaged the services of the
chief executive of the Association of Electoral Administrators to conduct a root-and-branch
review of the Island's electoral legislation.
The first phase, looking at electrical registration and franchise, is underway, and Members
will, I am informed, be invited to a drop-in session with a Mr Turner, who has been appointed,
so that they can make their own representations.
I hope that is of assistance.
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The President: The Hon. Member, Mrs Beecroft.
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Mrs Beecroft: Thank you, Madam President.
So could the Acting Attorney General just confirm that the only recourse people have would
be through a petition of doleance, which is quite costly? Would he look to see if there is any
other alternative, because it is time-consuming, complicated and extremely expensive for
people?
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The President: I think that has been answered, but the learned Acting Attorney General may
reply.
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The Acting Attorney General: Just by way of clarification to the Hon. Member, Mrs Beecroft,
a petition of doleance is not the only remedy. In a sense, it is the last remedy.
As I have indicated, there is a right under statute to make a claim which would go before the
High Bailiff, and there is also right of appeal in that regard.
The President: The Hon. Member, Mr Harmer.
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Mr Harmer: Thank you, Madam President.
If I could just ask the learned Attorney General: in essence, with the difference between this
year and last year, where people were deleted off the register, whether the legal position really
covers any sort of situation where there might be human error, or the envelope did not get
there, and then the only redress is through a petition of doleance; and because there is no
second check, as there is this year, whether that actual act of deleting people without the
relevant checks was valid?
Secondly, whether there are legal vires at the moment that if we had an online register
where you could review to see whether you were on the list or not, whether there are legal vires
currently to facilitate that?
The President: Learned Acting Attorney General.
The Acting Attorney General: Thank you, Madam President.
Again, I need to stress the point that the petition of doleance is the last resort. If someone
believes that they have been omitted from the register for the example which has been cited,
that their envelope returning the form has not been received, they can make contact with the
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Electoral Registration Officer and make that claim. I am aware that the circumstances did arise
last year that searches were made and enquiries were made, and insofar as it was necessary,
amendments were also made by the Electoral Registration Officer.
So there is, I need to emphasise, a process where people can go to the Electoral Registration
Officer and make that claim.
Notwithstanding that, if there has been error and the person concerned is not satisfied, that
is when they can make the appeal to the High Bailiff. Alternatively, if there is no provision in law
where they can do that, that is when the provisions relating to doleance would kick in.
Registers are, as Hon. Members are aware, available for public inspection at the General
Registry, the Cabinet, all local authorities, the Manx Museum and the Tynwald Library. So they
are freely and openly available to the public.
The issue as to whether they can be then online, that is a matter, Hon. Members, I would
have to look into.
The President: Perhaps we can avoid repetition, Hon. Members. The Hon. Member,
Mr Quirk.
Mr Quirk: Thank you, Madam President.
Could I ask the Acting Attorney General then, in the Question it says ‘being informed’: would
the Attorney General agree with this position then, that if the information that is sent out is by
newspaper or media, would that comply with ‘being informed’?
Also could I ask the Attorney while I am on my feet regarding the attempts that are being
made to circulate blank forms to the owner-occupier of a dwelling: that would be ‘to be
informed’. Is there then a duty of care for that person then to fill in the form – there is an
obligation on the person to do something?
The President: Learned Acting Attorney General.
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The Acting Attorney General: Thank you, Madam President.
The public notice to which Hon. Members referred is only part of the process of bringing the
matter to the attention of the public. The Electoral Registration Officer must address the canvass
form to each property and to the property holder, and it is that person who then has a statutory
obligation to complete and return the form for those persons living at that property who are
liable, if that is the right expression, to be included on the electoral register.
I do not know if that answers the point the Hon. Member wishes to raise.
The President: Final supplementary, Mr Karran.
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Mr Karran: Can the Attorney inform us of the situation as far as Peel Commissioners are
concerned? I believe that they had the run-around as far as trying to sort out the mess over this
issue.
If he is not aware of that, would he consider looking into this case, allowing for the fact that
being able to do a petition of doleance is like the fact that we can all book in at the Ritz for a
week, but the only little problem is that you have got to have the money to do so.
So what changes in the law would stop the total deterioration as far as our voters’ lists have
become, allowing for the fact that when there was the assessment board, there were about
three staff, there was no such thing as computerisation, to the situation where we knew the
property-owning votes, we knew their social standing, as far as whether they were married,
whether they were single or what they were doing. We find that now half of the people … well,
not half the people, but a good quarter of the people are not on voters’ lists, at the very least.
What action are you recommending in order to bring about the protection of the cornerstone of
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this Island called democracy, allowing for the long history of problems as far as gerrymandering
as far as votes are concerned in the past, when I can –
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The President: Could you keep your question concise, Hon. Member.
Mr Karran: I am just saying, my good friend, the former Member for Middle, Ted Ranson,
used to complain about it, years before I ever even saw the inside of this building. What priority
are you going to give, to make sure that we start getting effective voting lists, in order that we
can actually have true participation, as far as democracy is concerned in this Island, to stop the
slip backwards to how it used to be as far as having a vote on this Island is concerned?
The President: That has been answered in terms of the review, but learned Attorney General
may give some additional advice.
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The Acting Attorney General: Thank you, Madam President.
To answer the first point, if I could say in response to the Hon. Member, I am fully aware of
the Peel Commissioners’ situation –
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Mr Karran: Who is being held to account?
The Acting Attorney General: – upon which I have advised and upon which I am satisfied the
Electoral Registration Officer and her team have responded appropriately.
The position with reference to the other points the Hon. Member refers to is really, as
Madam President alluded to, dealt with in my comment which I have already made, that I fully
accept that the legislation requires wholesale review, clarification and modernisation, which is
why a review is being conducted.
In the interim, however, I can say to Hon. Members that I am satisfied that the Electoral
Registration Officer is doing what she can to comply with the obligations which I know she
accepts, which is to ensure that there is in place as robust a system as is possible to ensure that
the voters’ lists are accurate. I am satisfied and I have every confidence in her and her team that
they will continue to work within the current legislation to ensure that is the case for the
forthcoming general election in September.
The President: I missed the Hon. Member, Mr Malarkey, but this will be the final
supplementary.
Mr Malarkey: Thank you, Madam President.
Can I ask the Acting Attorney General: in the light of his statement that there is a legal
obligation to return the form, could he inform us what the penalties are for not returning the
form and when the last time somebody was actually penalised for not returning the form,
Madam President?
The President: Right, we are straying a little bit from the question, but learned Acting
Attorney General.
The Acting Attorney General: Thank you, Madam President.
I do not have the answer to the penalties in front of me. The Hon. Member, Mr Malarkey, if I
could give that to you later.
What I can say is that steps are being taken to look at the issue of people who are not
returning their forms and it has been agreed with the Electoral Registration Officer that in those
circumstances, when it is appropriate, those matters will be referred to Chambers. So we have
been referred details of persons and households who have not responded to the canvass that is
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being conducted and we are currently considering whether action will be taken with regard to
the details we have been given.
Mr Malarkey: Sorry, Madam President!
What action can be taken?
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The Acting Attorney General: Madam President, briefly there: it will result in a prosecution
and a fine if found.
ECONOMIC DEVELOPMENT
5. TT Homestay –
Regulations
The Hon. Member for Onchan (Mr Karran) to ask the Minister for Economic Development:
What action needs to be taken over the regulations governing Homestay so it can be
promoted for any future TT event?
The President: Question 5, the Hon. Member for Onchan, Mr Karran.
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Mr Karran: Eaghtyrane, to the Shirveishagh of Economic Development: what action needs to
be taken over the regulations governing Homestay so it can be promoted for any future TT
events?
I so ask.
The President: The Minister for Economic Development to reply.
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The Minister for Economic Development (Mr Skelly): Gura mie eu, Eaghtyrane.
A legislative framework governing Homestay is the Tourist Act 1975 and regulations made
under the Act. ‘Any premises used for the lodging for reward of tourists or visitors’ comes under
the scope of the Act, and there is a requirement to register the accommodation.
Homestay is currently operated by Regency Travel on behalf of our Department. Properties
for both TT and the Festival of Motorcycling must be registered annually. There is also an option
which allows owners of Homestay properties to take bookings up to two years in advance. This
has proved popular for visitors and Homestay hosts alike. The Scheme is promoted by Regency
Travel throughout the year.
Our Department is not aware at this time of any regulatory issues in relation to Homestay
which need to be addressed. However, should the Hon. Member for Onchan have any specific
suggestions as to the legislation or how the Homestay is promoted, I would be pleased to discuss
them.
The President: Supplementary question, Mr Karran.
Mr Karran: Eaghtyrane, gura mie mooar eu.
I thank the Shirveishagh for his reply.
Will providers of Homestay accommodation be allowed to make representations to you and
your Department over their experiences in terms of the promotion of the Scheme, allowing that
it is a vital Scheme as far as it is one of the few times when we actually have something of a
tourist industry like we did when I was a child?
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Would the Minister comment: are there differences in commission earned by Homestay
operating agents in terms of hotel bookings versus Homestay bookings and whether there is any
sort of higher commission as far as this issue is concerned?
If he is happy to have an open door, then I can get the people who are complaining to me to
come and complain to him about their experience and their concerns of making this much more
effective.
The President: Minister.
The Minister: Gura mie eu.
Yes, absolutely open-door. I welcome feedback directly, via the Member or otherwise, to me
personally as the Minister or the Member responsible too.
What I would say is that the fees associated are very reasonable. For one year it is £25 to
register; for three years: £45, and do bear in mind that registration is all about the liability
insurance that goes along with that.
Since we have outsourced this, externalised this from the Department and put it into the
private sector in the travel agency hands, there has been a 16% increase. That is, I think, an
encouraging number of properties that are now registered. Clearly, there is a demand for it and
we hope that will continue.
The President: Supplementary question, Mr Karran.
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Mr Karran: Thanking the Shirveishagh for his reply.
If has got an open door, then the people who have been complaining to me about
preferential treatment against Homestay towards hotels and complaints about the way the
booking service is working will hopefully take this opportunity now to know that they can come
and complain to you directly instead of to me as the opposition.
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The President: I do not think there was a question in there!
The Minister: Certainly the door is open and I am more than happy to speak to him.
6. Enterprise Development Fund –
Investment Monitoring Committee details
The Hon. Member for Onchan (Mr Karran) to ask the Minister for Economic Development:
With regard to Accelerator and Relocator elements of the Enterprise Development Fund
whether the Investment Monitoring Committee has been appointed; who its members are;
what their remit is; how they were selected; and what criteria, particularly with regard to raw
start-ups, have been agreed to ensure entities proceeding into the investment process have a
verifiable proof of concept, demonstrable early track record and likely future potential?
The President: Question 6, the Hon. Member for Onchan, Mr Karran.
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Mr Karran: The Shirveishagh for Economic Development: with regard to the Accelerator and
Relocator elements of the Enterprise Development Fund, whether the Investment Monitoring
Committee has been appointed; who are the members of it; what their remit is; how were they
selected; and what criteria, particularly with regard to the raw start-ups, have been agreed to
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ensure the proceedings into the investment processes have a verifiable proof of concept and
early track record and are likely for future potential?
I so ask.
The President: The Minister for Economic Development to reply.
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The Minister for Economic Development (Mr Skelly): Gura mie eu, Eaghtyrane.
I thank the Hon. Member for his Question on this matter.
Our Department is presently taking steps to establish the Investment Monitoring Committee,
which will monitor the overall performance of the Scheme. It is anticipated that the first meeting
of the Committee will take place within a month.
The Committee will include the Department’s Chief Executive and a director of finance, and
we are in the course of appointing an independent private sector chair with appropriate,
suitable, commercial experience. Subsequently, additional persons may also be invited to join
the Committee. They would be selected for their specific expertise, experience and track record
in wealth creation.
The Committee will have a number of main functions: to review the quarterly reporting
information and other key management information to be provided by the Scheme Manager; to
ensure that the financial assistance granted is in accordance with the Scheme, the various
Scheme guidelines and the contract between the Department and the Scheme Manager; to
provide a conduit between the Scheme Manager and the Department to raise any issues; to look
at ways of further improving and developing the Scheme and to identify any problems that may
arise; to review and agree three-year business plans draw up by the Scheme Manager to review
the annual accounts and audit report and to provide any broad parameters to the Scheme
Manager as regards general investment policy or a matter relevant to the Scheme.
The Committee will be able to raise questions about particular holdings within the
investment portfolio and to discuss any specific market issues that may have arisen during the
review period, but it will not be able to make specific investment decisions as the Scheme
Manager is dependent on our Department.
Eaghtyrane, turning to the second part of the Question, which concerns the investment
criteria to be applied to start-ups: as with all applications under the Scheme, submission of a full
business plan and application form will be required. Each proposal will be considered on a caseby-case basis, depending on its sector and stage of development.
The review by SPARK will aim to establish the viability of the business and will, among other
things, include a review of the management teams’ background and capability to deliver the
plan; the viability of underlying concepts, products, services and business model; analysis of the
market opportunity and consideration of the growth potential of the business; and, where
appropriate, SPARK will look to provide assistance to applicants as it carries out reviews, and will
also be able to call upon its extensive network of contacts and industry experts to provide
additional input and to assist with the assessment of particular proposals.
I hope that helps.
The President: The Hon. Member, Mr Karran.
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Mr Karran: Can the Shirveishagh provide some update of the numbers of potential
businesses that will be attracted to or established on the Island through the Scheme?
What is the protected number of employees per £1,000, per £100,000 as far as the
investment equation, as far as using this money?
Can the Minister comment on the nature of the jobs being approved and, in particular,
whether the majority of these jobs will be IT related? Whilst there are many jobs that need to be
protected as far as the Island is concerned, for our unskilled labour that is on the Island, they are
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increasingly becoming more of an underclass, who are ending up being stuck in the likes of that
unsuitable accommodation that we want to try and sort out in the previous Question.
The President: Minister.
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The Minister: Gura mie eu.
It is still very early days. I know many of you attended the ISLEXPO which was the real launch
event of the Scheme here on the Isle of Man. We are promoting this off-Island, as many of you
will know. I am giving an update to Members tomorrow about that, in particular the Festival of
Business which is occurring at the moment in Liverpool, which is a major event we are involved
with. What I can say to this Hon. Court is that the pipeline is very strong. We have got, currently,
80 different enquiries that are being assessed.
To take the Hon. Member’s point with regard to jobs and employment, that is the absolute
focus, what we are trying to achieve here. We want businesses that have a physical presence
here on the Isle of Man, that have real jobs and pay real tax and are obviously a real benefit –
(Mr Quirk: Hear, hear.) so that is absolutely our focus.
Can we get organic businesses here as well as relocating? Absolutely, we want to encourage
that as much as possible. I will say, going back to the ISLEXPO, that generated direct interest
there and application forms were filled out there, not just for the Enterprise Development
Scheme, but also the old Start-Up Business Scheme, which generated good interest.
The last point, in terms of the nature of the type of businesses we want to attract: essentially
that is export-related. The Hon. Member mentioned tech and e-business. Yes, that is one
particular sector that would be attracted towards that, but not necessarily in that area. I know
that we have enquiries in manufacturing and also food and drink, so we believe that there is a
wider opportunity in a whole host of different sectors that we believe will be of benefit to our
local economy.
The President: The Hon. Member, Mr Thomas.
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Mr Thomas: Thank you, Madam President, and I appreciate the Economic Development
Minister’s fulsome answer.
I might have missed it, but is there a second committee monitoring the activity of SPARK, the
Investment Manager, or is this monitoring committee the only one? Because I could not hear
mention in the list of activities things like: monitoring the separation of assets; monitoring the
custody of assets; monitoring whether the cash was invested; monitoring compliance with the
investment guidelines. Perhaps there is a second committee that has not yet been identified in
this answer.
The second question I have is: my recollection is that an applicant for the fund can actually
apply to the Department to overrule the decision of the fund manager. How is the Investment
Monitoring Committee involved in that appeal process? If it is not, where will the Minister get
advice when making that decision about that appeal, given that his Chief Executive Officer and
his other senior officers are already on this committee?
The President: The Minister to reply.
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The Minister: Gura mie eu.
No, there is not intended to be another committee. I think the Hon. Member termed it to be
the ‘bonfire of committees’. We do not wish to actually have over-bureaucratic structures in
place. The idea is that this is a monitoring committee that will monitor the Scheme and its
guidelines.
Is there an appeal process? Yes, there is an appeal process, and that can actually be enacted
should an applicant be turned down for funding; that would be something we would have to
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come back to. For the detail of that, I would need to refer back on the Scheme itself and what
we had actually agreed in this Court. What I would suggest, though, as the Hon. Member
highlighted there, those are a number of technical issues that are surrounding, obviously, the
finance application within the business plan and I would imagine that would actually be part of
the original process.
The President: The Hon. Member, Mr Karran.
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Mr Karran: Vainstyr Loayreyder, can the Shirveishagh – whilst not questioning his integrity as
far as we have our number one priority as jobs and income as far as the Island is concerned …
How does he reconcile the situation with the tax schemes that they have got in the United
Kingdom for very wealthy people to invest: the EIS, the SEIF, the SITR tax schemes in the UK?
How does he reconcile where we are going to be able to move to make sure that we are not
going to end up losing the vast majority of this money, allowing for the fact that there has been
a more sensible approach by some in this Court than this Chief Minister that was talking of a
70% loss-rate as far as this fund originally?
How can this House be assured – when we saw the reply from my good friend, the Hon.
Member for South Douglas, the Leader of the LibVan Party – where you were talking about
where a multi-million-pound contract was given out as far as the TT promotion and you were
talking about nominee directors, when the fact is that issue of nominee directors has long been
made illegal as far as the Island’s company law is concerned?
Does he feel that we do need to have some clarity, like the Hon. Member for West Douglas,
to make sure that we do not end up with all the best intentions of you adding to the long list of
good taxpayers’ money actually falling on fallow ground and some flourishing at great expense
to the rest of us?
The President: A very long question, Hon. Member, but –
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The Minister: Yes, I think the Hon. Member there is straying into regulations around the
directorship responsibilities and so forth.
The intention of the Enterprise Development Scheme is really to assess the business viability
and that is why we have externalised that to try to reduce the bureaucracy around it, so quick
decisions can be made. Clearly, this is taxpayers’ money and that is why we have established
within the Scheme that we would have a monitoring committee – and that is where the original
Question came from.
I think the Hon. Member did highlight a very good point there about the competitive nature
that we are in. I have certainly had challenges and I am sure many of us have as to why we
should make this investment. Why can’t businesses just come to the Isle of Man? We all know it
is good. Well, quite frankly, we may know it is good and there are many advantages of being
here, but our competitive position is being eroded on the basis that there are so many other
jurisdictions now fighting for business and offering a whole host of different schemes to actually
promote it.
I come back to the very fundamental point of this particular Scheme: it is intended to be selfsustaining. Therefore, if we are to make a loan, we are to make an equity investment, we are
going to be a minority stakeholder for up to 25% – and there should be private investment
involved with that – that money is intended to actually be repaid over a period of time.
Therefore, when decisions are made to invest, the exit strategy needs to be very clear on that
particular point.
So, yes, we are in a very competitive field and it has been early days with this particular
programme and the signs are encouraging, but we will have to wait and see once we can get
businesses and jobs to actually land right here.
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The President: Final supplementary, Mr Thomas.
Mr Thomas: Thank you, Madam President and to the Minister for his first answer.
Perhaps it would be helpful for the public record if the Minister could actually circulate a
written response to my first two questions and this other one later so it is there in Hansard.
My third question is about the role of the regulator in all of this: our Financial Services
Authority, because to my mind all of this money is our money, so I am not quite sure why we
need the regulator involved. To me, it would be very helpful to know what role the FSA is going
to play in this because perhaps that is the vehicle that is going to be used to monitor the
questions I had earlier.
Finally, have the private sector expert individuals already been involved up to date in actually
developing this Investment Monitoring Committee and the regulations and the guidelines, or is
this Investment Monitoring Committee brand new and still to be formed?
The President: The Minister to reply.
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The Minister: Gura mie eu.
Taking the last point first: yes it is in the process of being formed, as stated in the original
answer. I will happily circulate that answer. It is well worth pointing out there that the chair is to
be private sector. Therefore, we do need to have that appropriate commercial experience, but
clearly we need to have Government on there as this is a monitoring committee – so as to
understand the guidelines that we have agreed to.
I am a little unclear and perhaps I need to take that separately with regard to the regulator’s
involvement with this. I am not sure which regulator he is talking about – whether it be the FSA
– but there is no involvement with this with the Scheme Manager.
Going back to the Hon. Member’s question about directorships and their responsibilities, I
believe that to be a separate issue than the actual Investment Scheme, but I would be happy to
pick that up separately.
ENVIRONMENT, FOOD AND AGRICULTURE
7. Meat Plant –
Manager and subsidy
The Hon. Member for Michael (Mr Cannan) to ask the Minister for Environment, Food and
Agriculture:
Who the appointed manager of the Meat Plant is; what subsidy was provided in 2015-16; and
whether a subsidy has been provided in this financial year?
The President: Question 7, the Hon. Member for Michael, Mr Cannan.
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Mr Cannan: Thank you, Madam President.
I ask the Minister for Environment, Food and Agriculture who the appointed manager of the
Meat Plant is; what subsidy was provided in 2015-16; and whether a subsidy has been provided
in this financial year?
The President: The Minister for Environment, Food and Agriculture to reply.
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The Minister for Environment, Food and Agriculture (Mr Ronan): Thank you, Madam
President.
Miles MacPherson was appointed as interim plant manager on 31st May following the
resignation of previous Chief Executive, Mike Owen, earlier this month for family reasons.
Madam President, a total of £915,000 was paid in subsidy in the 2015-16 financial year.
However, this effectively relates to two years because Isle of Man Meats operates to a calendar
trading year end; therefore, we provided £480,000 for the 2015 calendar year and a further
£435,000 towards their current trading year. A further £295,000 has been paid in this financial
year so far.
The President: Supplementary question, Mr Cannan.
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Mr Cannan: Thank you, Madam President.
In 2012, the former Minister, Minister Gawne, announced that a subvention package worth
£1.5 million had been agreed for Isle of Man Meats and that the subvention was to assist the
business and implement a three-year transition to a more sustainable business model.
Can I ask the Minister whether the figures that he has provided today are part of that original
deal in 2012?
Secondly, whether the business, the Meat Plant, has now transitioned to a sustainable
business model?
The President: The Minister to reply.
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The Minister: Thank you, Madam President.
In part, yes, the subsidy and the package mentioned in 2012 is part of the figures I said. The
subsidy provided since 2012, as the Hon. Member said, has been based on a four-year Treasuryapproved subvention package which has decreased each year from £900,000 in 2013; £480,000
in the last financial year and £380,000 in this financial year.
As I said before, the Meat Plant trades on a calendar year which is different to ours. The
money for that comes from the Agriculture Development Fund which is operated in DEFA. There
are elements which have been paid this year which are outside of that agreement.
Have the plans effectively worked? What I can say is that there has been an enormous
amount of work done at the Meat Plant in that time. What they are facing – and certainly this
year – are numerous factors: poor trading performances, Madam President. A number of
obvious factors including strong cattle prices in the UK and a weak euro; collapse of the Chinese
demand, impacting local demand. In other words, quite clearly, there is, I believe, still a way to
go for the sustainable future of the Meat Plant and we are working towards that at the minute
with the arrangements we have in place, Madam President.
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The President: Supplementary questions, Mr Karran.
Mr Cannan: Can the Minister clarify? He said –
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The President: Supplementary question, Mr Karran!
Mr Cannan: Sorry, Madam President.
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Mr Karran: I am happy to give way to the Hon. Member if you want. I will give way to you
and I will follow you on.
Right! Can the Shirveishagh explain: is this a direct result of the issue of throughput because
of the Countryside Care Scheme?
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What assurances can we have, as the representatives in the parliament, for the protection of
the taxpayers, that any subsidies will not end up becoming yet another one like the Countryside
Care Scheme: a Poacher’s Pocket-style mechanism to benefit the few at the expense of many?
In the event of any freeing up of any capital through any subsidy of this Meat Plant, will the
Minister consider applying this to developing premier-priced food products such as cheese and
other dairy products for animals fed on GM-free food?
The President: The Minister to reply.
The Minister: Thank you, Madam President.
Touching on the last bit first: certainly what the Hon. Member was saying there was really
that we should be maximising what we have. He touched on the food industry: the cheese at the
Isle of Man Creameries. What I can say is that the Isle of Man Creamery is doing an absolutely
superb job at the moment, maximising what is the Isle of Man’s potential in the markets and
certainly export markets. I am delighted to say that they are going to use – or trying to use – the
UNESCO brand, which as you know we have successfully got recently. I am delighted that we had
a delegation over last weekend for a visit and a meeting which was very, very successful. In
other words, there are opportunities out there.
In regard to his first question: is it a direct result of throughput of the Countryside Care
Scheme? I think what we have to remember is that the volatility of this industry is not just here
on the Isle of Man. As I said before, there are numerous factors in the commodity markets which
the Isle of Man Meats is predominantly trading in which we are trying to help steer an area of
the agricultural industry away from that. We appreciate there always will be a commodity
element to the agricultural industry. There is no denying that, but we will be in a far stronger
place if we adopt, I believe, the policies and the recommendations in the Food Strategy.
As I say, there are culminating factors and it cannot be pinned on one single area like the
Member has just said.
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The President: The Hon. Member for Michael, Mr Cannan.
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Mr Cannan: Thank you, Madam President.
I am not entirely clear from the Minister’s answers so far what he envisages as a sustainable
operation from the Meat Plant; nor am I clear entirely as to what sort of future subvention is
now required. Perhaps the Minister may, if he does not have those figures, choose to let us
know in writing what sort of subvention is going to be required, where that subvention is going
to be coming from and also the impact on the Agriculture Development Fund – i.e. how much
longer will the Development Fund last before this money is going to have to be found from
elsewhere?
Could I also ask the Minister: does he acknowledge that the farming industry continually
raises a number of concerns about the operation of the Meat Plant? In particular, at the
moment, farmers are often struggling to get their animals to the Meat Plant in a timely manner.
In other words, when they are ready to go with their animals it is taking a number of significant
weeks before the Meat Plant is ready to accept their animals, in some cases.
Also, does he recognise the dichotomy that is taking place at the moment with the continued
pricing differentials that are taking place in the UK market, which are resulting in significant
export of animals across to the United Kingdom for slaughter, and that farmers are reporting to
me that for beef, for example, beef carcasses, the profit margins from going to the UK – net
profit margin – can be often in the region of £75 to £100 per carcass? Does he accept, therefore,
that the pricing structures that we are offering at the Meat Plant are playing a significant role in
hindering the development of the Meat Plant as a business?
Finally, Madam President – forgive me, I have just one final point to raise – there was a
report written last year, in September 2015, into livestock pricing by Isle of Man Meats, by a
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company called Delta Innovation Ltd. That report contains a recommendation that the abattoir
should aim to be price equivalent with the UK. Can I ask him who commissioned that report and
what impact and what consideration has been given to the recommendations in that report –
and again, if he does not have the answer now could he perhaps feed back to Hon. Members at
a later stage?
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The President: The Minister to reply.
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The Minister: Thank you, Madam President.
I think I am clearer now – we were talking about this a minute ago. That report, I believe, is
the Webster report on equivalency, which came back with a clear recommendation, which
was … There has been an old argument that we should have equivalency to the UK prices, and
what that report clearly stated was what we should try and do is get the best price we possibly
can for our price here. When all the focus is on what the UK gets, the report clearly said that
what we need to do is focus on the quality and as high a price as we can possibly get right here.
That report was commissioned by us in conjunction with Isle of Man Meats.
He mentions about the fund and the future subvention and the sustainability of the plant
going forward, Madam President. I think what I can tell this Hon. Court is that there was a
professional management team in Isle of Man Meats for about six months to propose options,
reporting back to the former board. This management team did not really present the options
which we were hoping for, and, if I am honest with you, it was a quite disappointing report
which came in front of me.
There was also a report on the future of the plant done by the then chief executive, Mike
Owen, which was a very difficult and complex report to understand, which did not fit the needs,
we believe, of the plant going forward.
Currently, at the moment, we have a review project with a project manager reporting jointly
to DEFA and Isle of Man Meats. This project is being managed by Scott Baker, a turnaround
expert with previous experience of Isle of Man Meats. This is to identify and test market
feasibility options, separate marketing from the meat plant, which I think is an important
element, contracting out the Meat Plant, selling the entire business, even closing the plant. That
would be at the mercy … to UK exporters, which is something I certainly would not agree with,
(Mr Cretney: Hear, hear.) and hopefully other options will come back.
But I think it is important now that we step back and we have a … The Meat Plant issue has
been going for quite a considerable time – somebody said to me, ‘We’ve seen it all before,’
Madam President (A Member: Hear, hear.) – and I think it is important that now we have a
serious reality check.
A lot of the legislation surrounding the ongoings of the Meat Plant is very historical. I believe
going forward that we are at the stage where that legislation is going to have to be reviewed for
the good of the Meat Plant, but, more importantly, for the good of the agriculture industry going
forward.
I am aware of the industry concerns which the Hon. Member has said … that the UK salesmen
basically are going round offering more per carcass than they can get at Isle of Man Meats. This
again highlights problems we have with perhaps the running of the plant and the efficiency, and
the reliability which the plant needs to supply customers on and off Island. At the end of the
day, the 400 farms on the Isle of Man have to take business decisions, and if somebody comes
and offers them money there and then to take them, and that money is available probably
instantly, that business or that farm has a decision to make which can ultimate affect the Meat
Plant’s reliability. With that is market viability –
The President: Hon. Members, could we perhaps –
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The Minister: – and, as I said before, Madam President, the cattle prices in the UK … With the
weak euro, this is an ever-changing situation which is causing difficulties for the Meat Plant.
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The President: Could we make answers as concise as I would invite you to make questions,
Hon. Members.
8. Medical consultants –
Experience and knowledge
The Hon. Member for Onchan (Mr Karran) to ask the Minister for Health and Social Care:
What action his Department has taken to get medical consultants with experience and
knowledge of the best quality?
The President: Question 8, the Hon. Member for Onchan, Mr Karran.
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Mr Karran: I was just going to follow up that other question, but fair enough.
What action will the Shirveishagh for Health and Social Care’s Department take in order to
get medical consultants with the experience and knowledge of the best quality? I would be
interested to know what the Answer to that would be. I so ask.
The President: The Minister to reply.
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The Minister for Health and Social Care (Mr Quayle): Thank you, Madam President.
The Department advertises all medical vacancies in the British Medical Journal (BMJ), which
has a comprehensive listing of jobs for doctors and medical professionals. It covers the entire UK
medical sector and features vacancies from around the world. This is the preferred journal for
those medical professionals seeking opportunities for work. It has approximately a 96% reach for
job-seeking doctors through its careers section in the printed journal online and medical
professionals at Noble’s Hospital support the view that the BMJ is the most effective way of
reaching doctors seeking jobs. In addition, the Office of Human Resources can advertise
vacancies via social media channels, including Twitter and Facebook.
The Department offers similar terms and conditions to those of the United Kingdom NHS and
offers excellent continuing professional development opportunities. Hon. Members will be
aware that only this year the annual national training survey of junior doctors commissioned by
the General Medical Council has seen Noble’s Hospital ranked amongst the top 25% in hospitals
in Britain for a key component of doctors’ medical education, core medical training. Core
medical training comes after the two-year foundation programme that junior doctors
commence after graduating from medical school. It marks the beginning of a doctor’s
progression to their chosen speciality of medicine, whether as a GP or a consultant. This national
recognition will only serve to attract clinical professionals to the Island.
All consultant job descriptions and person specifications are agreed with the relevant medical
faculty prior to a post being advertised to ensure they meet the current standards for that
specialism. Recruitment panels for consultants include a faculty representative and local
professional clinical representatives. Typically, selection processes include additional skills tests
such as presentations to test the applicant’s knowledge and ability beyond their specialist role,
and interview questions will probe management and leadership competence in addition to
professional medical skills.
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Over the past 12 months the Department has successfully recruited five medical consultants
in the following specialisms: two anaesthetists; a cardiologist; a respiratory physician; a
psychiatrist in old-age mental health; and an occupational health physician.
The Department will continue its active approach to recruitment to ensure that we can
encourage the highest-calibre recruits possible to work in our health and social care services.
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The President: Supplementary question, Mr Karran.
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Mr Karran: Eaghtyrane, can the Shirveishagh agree the fact that there will be certain
consultancies that we will definitely always need to have located on the Island? But in light of
the considerable expense in employing consultants locally and the ever-evolving medical
practices and more specialisation, will the Shirveishagh investigate alternative methods of
dealing with certain treatments – for example, by developing a broader range of networks and
relationships with centres of excellence that specialise in different areas of excellence – so that
rather than them sending many people to the United Kingdom for consultants, those
consultants are made available periodically on the Island to provide specialist, timely and topquality local care on a routine basis on the Island? It also means that we get prompt, proper
prognosis in order that there is no delay as far as the ever-increasing standards as far as medical
intervention is concerned in many medical conditions.
The President: Minister to reply.
The Minister: Thank you, Madam President.
I thank the Hon. Member for Onchan for his helpful suggestions, because I have to say I
totally agree with him and it is something the Department is already looking at doing. For
example, we are looking to expand our telemedicine on the Isle of Man and I thank the Henry
Bloom Noble Trust for giving us finance towards setting that up on the Island. That should help
things, for example, like dermatology, where I think up to 80% of dermatology can be dealt with
by telemedicine. And that can be anybody, not necessarily in the UK but in the world – America,
for example.
Again, I thank him for his comments on bringing over a team of consultants, because that is
exactly what we did as a Department for the wet macular treatment, for example. We costed
out sending people off Island and I am delighted to say that 80%-plus of people who suffer from
wet macular ARMD are now treated on the Island by a consultant and his team who fly over
from Aintree Hospital every second Friday.
I think we are, with a new team of people, looking constantly at other areas where it may be
more beneficial for the people of the Isle of Man, both for an improved service and a costeffective service, to bring visiting teams to the Isle of Man if we do not have enough volume of
cases to employ a consultant on the Isle of Man to keep their professional skills up to a certain
level.
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The President: Supplementary question, Mr Singer.
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Mr Singer: Thank you, Madam President.
Could I ask the Minister: when the Department is seeking to employ medical consultants, is
the Department sensitive to which speciality services are required or the need to enhance the
service? For example, how can I give hope to a constituent of mine who is in severe pain, has
been referred for pain management and has to face a two-year waiting list?
The President: Minister.
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The Minister: Thank you, Madam President.
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I thank the Hon. Member for his question. I think I said earlier in the Question that when we
are looking for a positon we do not automatically fill it with exactly the same remit that had
been there before. We look to see what the Island needs going forward, and therefore the
advertisement will not necessarily be for what had been there prior. It is always looking to
improve the service to the people of the Isle of Man.
Regarding the pain clinic, my Department did introduce additional clinics to significantly bring
the waiting list down. They are currently happening on a Saturday. I think I have mentioned
previously to Hon. Members it was exceedingly disappointing that, people having been
contacted to attend the pain clinic on a Saturday, we had a significant rate of DNAs, and that
was unacceptable, given the cost to the Department of trying to do our best to bring this waiting
list down – because the Hon. Member is correct, it is too long, and therefore we are still
continuing.
The President: The Hon. Member Mrs Beecroft.
Mrs Beecroft: Thank you, Madam President.
Could the Minister confirm … Firstly, I am delighted to hear he has got five consultants
recruited, but could he confirm whether they are replacements or additions to the ones in place
already?
The President: Minister.
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The Minister: Thank you, Madam President.
I would be guessing to give the Hon. Member a truthful answer, so I will clarify. I think they
are replacements, but I will get that answer to you in writing.
The President: The Hon. Member, Mr Speaker.
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The Speaker: Madam President, can I ask the Minister if there are currently any consultant
posts vacant which are being met by locums; and, if so, what they are and how long they have
been vacant?
And secondly, given the well-known recruitment difficulties right across the National Health
Service in the UK and actual filling of posts, whether there is a noticeable problem in recruitment
in the Isle of Man, particularly within the last year with the claimed uncertainty over pension
provision going forward, which has been held as a major deterrent to filling posts in the Isle of
Man.
The President: Minister.
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The Minister: Thank you, Madam President, and I thank the Speaker for his question.
Regarding consultant vacancies, yes, there are vacancies which we are actively seeking to
address all the time. I cannot name every one specifically – this Question has been slightly
widened out to greater than the original Question – but I am more than happy to give the
Speaker and all Members a list of those vacancies.
Has it worsened in the last year? No. We are finding we are getting very good applicants for
jobs. In fact, I was speaking to the new manager of the Clinical Division at Noble’s Hospital only
yesterday, discussing this very topic – nothing to do with the Question, obviously – and they
assured me that they were getting an excellent number of people applying for jobs, and it was
very satisfying that the situation seems to be getting better regarding recruitment. We seem to
be getting a good calibre of people coming to the Island. Obviously, we have upped our game in
trying to improve it, and I would say that in the last 12 months we have not seen a decrease
through any pension doubts.
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The President: Supplementary question, Mr Cannan.
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Mr Cannan: Just to build on that a bit, Madam President, when we are speaking to potential
consultants, Minister, how well do we promote the additional benefits of the Island, including
the very beneficial tax rates that they will receive over here compared to the United Kingdom,
which for a junior consultant on £100,000 a year would potentially give them up to £20,000 a
year extra, and obviously for a senior consultant earning as much as £200,000 a year would give
them substantial benefits of perhaps up to £40,000 per annum if they were working on the Isle
of Man compared to the UK?
The President: Minister.
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The Minister: Thank you, Madam President.
Yes, we obviously sell the point that the Isle of Man has various reasons to relocate here. The
lowest crime rate is another one; a beautiful place to live; safe and secure; good standards of
education. So it is not just the tax package, but yes, we do obviously address that.
We also give a relocation allowance for people travelling to the Isle of Man to help with their
removal expenses. It is something we also do with nurses coming to the Isle of Man.
We also pay their training expenses, so if consultants need to go off Island to attend a
worldwide course to keep their speciality up in the latest developments in their area, then we as
a Department fund that too.
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The President: Final supplementary, Mr Karran.
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Mr Karran: Eaghtyrane, can the Shirveishagh take my thanks that the telemedicine is now
coming to fruition, allowing for the fact that when I was on the Department it was supposed to
be one of the advantages for the projected costs of the British-Irish Council of something like
£100,000? Can he give us a timescale –
The President: Could you come quickly to the question?
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Mr Karran: – when that will be the case? Allowing for the fact of the new initiatives, which
are something that we built on from nearly 30 years ago when we did the hip-replacement
initiatives, which caused almost blood on the floor of the Department at the time, what moves
are there to try and develop the issue of providing the services so that they are speedily
concluded as far as a time period that is acceptable for a health service, that we addressed by
doing that issue in the first place many years ago? And what assurances can we have –
The President: Hon. Member –
Mr Karran: – as far as the conflict –
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The President: Hon. Member! We are indulging today in people putting several questions,
long questions –
Mr Karran: Well, if you will allow me to have other questions, I will … [Inaudible]
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The President: No, you have a final supplementary.
Can I ask both people who are putting questions and those who are answering to be concise,
or we will not get through what is a relatively short number in the time available. (Mr Corkish:
Hear, hear.)
Carry on, Hon. Member.
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Mr Karran: Eaghtyrane, these are relevant issues about a very important issue, such as –
The President: They have to relate to the Question on the Order Paper and I have been quite
generous on that.
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Mr Karran: Yes, absolutely, and the Hon. Member has mentioned the issue of locums, and I
am asking have they sorted out the conflicts of consultants running locum consultancies on the
Island.
Finally, the last question I would like to ask is the fact that with medicine ever growing more
specialised, is there a move – recognising there will be core needs that we need on an
emergency basis – for us to be operating more directly with centres of excellence so that we
have an agency basis of bringing top consultants to the Island to bring the medical intervention
that is required, instead of having the situation where we have consultants that have to do a
broader take on medical complaints and not getting the same quality as far as resolving it is
concerned, because of us not trying to specialise more and work with centres of excellence in
the United Kingdom – and, if it comes to that, in the Irish Republic.
The President: Minister.
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A Member: Go for it.
The Minister: Thank you, Madam President.
The Hon. Member again does raise some very good questions. It is the latest thinking and I
can assure him that as a Department we are looking into maybe going down the line of where
specialist hospitals throughout the UK and in Ireland … A couple of years ago, I went to the
Beacon Hospital in Dublin to have a look at how they operated their set-up, where they have
satellites, so you will have a specialist hospital and it will send over a team to various hospitals
throughout the country – and hopefully to the Isle of Man, where that speciality can be brought
into our Hospital. It is in areas where we have not necessarily got enough volume to justify a fulltime specialist consultant. So, yes, it is an area that we are looking at, Hon. Member.
When does telemedicine come online? The question is totally different to the Answer I have
got in front of me, Madam President, so I will get that answer to him.
If there is one thing I can assure the Hon. Members of, it is that we now have a
commissioning officer of services on the Isle of Man who has come over from the northwest of
England, an exceedingly experienced officer who has made many changes and started to
implement savings going forward. That position had not been filled before, and as a result of
that they are more than saving their salary numerous times over. It is that sort of commissioning
of services that the Hon. Member for Onchan is looking for and I would like to give that
assurance that we are doing our best to deliver that sort of service.
9. Mr Paul Burnett’s inquiry into DHSC –
Date of report
The Hon. Member for Onchan (Mr Karran) to ask the Minister for Health and Social Care:
When the inquiry by Mr Paul Burnett into actions by the Department will report and whether
this will be by December 2016?
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The President: Question 9, the Hon. Member for Onchan, Mr Karran.
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Mr Karran: Eaghtyrane, when will the inquiry by Mr Paul Burnett into the actions of the
Department report, and will this be by December 2016? I so ask.
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The President: Minister for Health and Social Care to reply.
The Minister for Health and Social Care (Mr Quayle): Thank you, Madam President.
I am unable to answer the Question put to me by the Hon. Member for Onchan. Mr Burnett
is assisting with the fulfilment of a Tynwald resolution, not acting under the direction of my
Department, and so I am not aware of any timescales associated with his work.
The President: Supplementary question, Mr Karran.
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Mr Karran: I thank the Shirveishagh for his reply. Does he not feel that this demonstrates
what my concerns were as far as going down this line at the present time? Has the inquiry, in
fact, commenced? The affected families, have they been asked to sum up their concerns?
Allowing for the fact that this man is paid on a basis of a consultancy as far as your
Department, surely we should at least have some sort of timescale for these people who have
got some horrendous stories to address.
If he is not taking some leadership on this issue, should I be taking leadership as the
opposition, allowing for the fact that you basically vindicated my concern of not having an
independent inquiry in the first place, because we have ended up with no inquiry at all?
The President: Minister to reply.
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The Minister: Thank you, Madam President.
I am a little bit surprised by the Hon. Member’s question, because it is not for me to question
a resolution of Tynwald Court. Tynwald Court has made a decision and I have complied with
that. I have given all the evidence that the Hon. Member for Onchan gave to me, but he was told
to give that evidence to Mr Burnett. It is not for me to interfere with an independent report by
Mr Burnett. It is looking into my Department as a result of concerns raised by the Hon. Member
for Onchan, and therefore I really do not feel that I should be interfering in any way, shape or
form, but allowing Mr Burnett to get on with it. We have given, obviously, Mr Burnett evidence.
I am sure the Hon. Member for Onchan will have contacted him to get a timeframe, because it is
not my Department’s report – it is Tynwald’s request to Mr Burnett.
The President: Supplementary, Mr Karran.
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Mr Karran: Eaghtyrane, so who is actually paying for Mr Burnett as far as these services are
concerned if it is nothing to do with his Department?
Allowing for the fact that I am quite pleased, after 30 years of trying to get the separation of
power as far as … Well, 30 years ago we were the Government in this Court, but the point is … So
we are free to make representations to Mr Burnett about trying to get a speedy conclusion on
this scandalous situation – which I do not lay at the foot of the Shirveishagh; it is something that
has been historical and unfortunately is still happening as far as the Department is concerned.
I thank the Minister for his reply, but who is actually paying for Mr Burnett’s services if his
Department is not paying for it?
The President: The Minister to reply.
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The Minister: Thank you, Madam President.
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I am sure Mr Burnett will approach the relevant officials – probably the Clerk of Tynwald –
just to see where he stands should he feel the need to make a charge for his services, and then
we will discuss.
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Mr Karran: So you are turning Tynwald into a joke.
10. Vulnerable elderly people –
Ensuring legislative protection
The Hon. Member for Onchan (Mr Karran) to ask the Minister for Health and Social Care:
When the Government will bring forward legislation to protect vulnerable elderly people; to
ensure that care workers and managers who fail in their duties face criminal charges; and to
ensure that staff who are found guilty of malpractice are banned from working in care on the
Isle of Man?
The President: Question 10, the Hon. Member for Onchan, Mr Karran.
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Mr Karran: Eaghtyrane, when will the Government be bringing forward legislation to protect
vulnerable elderly people, to ensure that care workers and managers who fail in their duties face
criminal charges and to ensure that staff who are found guilty of malpractice are banned from
working in care on the Isle of Man? I so ask.
The President: The Minister for Health and Social Care to reply.
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The Minister for Health and Social Care (Mr Quayle): Thank you, Madam President.
Hon. Members will recall that safeguarding is one of the five key themes in the Department
of Health and Social Care’s five-year strategy approved by Tynwald Court in October last year.
The protection of vulnerable adults is a high priority for my Department and an area where a
number of checks and balances already exist.
The Regulation of Care Act 2013 includes the requirement for registered providers of care to
complete disclosure and barring checks at the pre-employment stage of a person’s appointment.
This process acts as a protective screening measure to ensure that people delivering care do not
have a criminal record or history. In addition, the recruitment and reference checking processes
are a mechanism through which service providers can screen out those staff who may not be
suitable providers or suitable for employment in the care sector.
On the occasions where a member of staff fails in their duty, the decision about how to deal
with the matter depends on the nature of the failing, but criminal proceedings and potential
charges are an option.
The Regulation of Care Act 2013 itself contains an ill treatment and neglect offence, where a
maximum penalty of two years’ custody or a fine can be given to the responsible person of a
registered social care provider. However, in the majority of cases where there are issues of
misconduct or unsatisfactory staff performance, they will be dealt with through capability or
disciplinary procedures, the presence of which are required by the Regulation of Care Act 2013.
The Department of Health and Social Care has also invested in the development of an adult
protection function. This investment has fostered close professional and multi-agency liaison
and decision-making when the Department is alerted to alleged abuse. As a part of the adult
protection process close liaisons take place with the Police and with the Registration and
Inspection Unit, both to protect the vulnerable individual and to ascertain whether criminal or
regulatory investigation should take place.
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For those staff who are registered and regulated through a professional body such as the
Healthcare Professional Council there are requirements relating to the disclosure of criminal
activity, or indeed misconduct, which may result in the member of staff being deregistered.
From this perspective, Madam President, I believe that there are already adequate measures
in place to ensure that people who work in a care provision setting are monitored, managed
and, where necessary, prosecuted for failure to deliver safe services.
The President: Supplementary question, Mr Karran.
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Mr Karran: Eaghtyrane, allowing for the reply and in light of the recent case of abuse in one
of the Island’s nursing homes, why have those who were charged with the care of vulnerable
residents seemingly escaped criminal conviction?
What action are you going to take in order to ensure that the inspection process is much
more progressive and much more able to hold these people to account, allowing for the fact
that we had a similar scandal in the mid-1980s where we had elderly people being tied up and
abused in a residential home in Douglas, that brought about the 1988 Nursing and Residential
Homes Act?
We have recently had a new Act, and yet we see these most vulnerable sections of the
community are not getting afforded the protection of the criminal law as far as this issue is
concerned.
The President: Hon. Members, I think we need to be cautious here, I have no idea whether
this matter is sub judice or not.
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Mr Karran: I think it is up to you to say that the process is open.
The President: Perhaps the Minister can give us some guidance as to whether the matter is
still sub judice or whether there is any appeal likely?
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The Minister: Madam President, I am not aware that the process is finished, I certainly have
not been made aware of any decision; but I can assure the Hon. Member that, should there be a
comment from the courts commenting on any way that we can improve our service, we will
obviously take their views on board.
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The President: Hon. Member, Mr Karran, if you could proceed on the basis of generalities
and not specifics, I hope that might –
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Mr Karran: Eaghtyrane, I am very happy with the issue of separation of power.
The issue that has to be asked is: is the present legislation defective if we find a situation
where some of the most vulnerable people in our society have not been afforded the ability, as
far as the criminal law, to make sure that they are protected?
Will the Minister consider something that we have tried to get in for the last 30 years and
maybe bring about reinforcing the inspection process, by allowing lay people to insist the
inspectors have regular meetings from different organisations, in order to make sure that it does
not just become a very cosy exercise – that I fear it became a number of years ago, long before
the Hon. Member became a Member of this House?
The President: Minister.
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The Minister: Thank you, Madam President.
I would hope the Hon. Member will see that the Regulation of Care Act 2013, which is a fairly
modern Act, has been brought in to protect vulnerable people who I am sure all Members of this
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Hon. Court want to see protected. As I say, our five-year strategy clearly states that vulnerable
people should be given proper protection.
Should there be a case in the future where it is shown that we can improve our inspection,
and if there is a certain case where loopholes have been found, then I am more than happy to
review our legislation.
What I would say, as Minister for two and a half years now, I have had two phone calls from
members of the public who have been concerned about the way their loved ones have been
looked after in a nursing home and I have instantly sent out the Safeguarding team to do an
inspection for me.
So I can assure the Hon. Member that the Department does take it exceedingly seriously that
vulnerable people do need safeguarding, and we are doing our best. And, at the moment, I have
not got any evidence that the legislation in place is not fit for purpose.
INFRASTRUCTURE
11. Driving-test applications and test dates –
Average waiting times
The Hon. Member for Michael (Mr Cannan) to ask the Minister for Infrastructure:
What the average waiting times are for processing driving-test applications and for test
dates?
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The President: Question 11, the Hon. Member for Michael, Mr Cannan.
Mr Cannan: Thank you, Madam President.
I ask the Minister for Infrastructure what the average waiting times are for processing driving
test applications and for test dates?
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The President: The Minister for Infrastructure to reply.
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The Minister for Infrastructure (Mr Gawne): Gura mie eu, Eaghtyrane.
The Driver and Vehicle Test Centre’s published time for processing applications for driving
tests is up to 10 working days. This has been achieved in recent years with very few exceptions.
Once an application is processed, the standard waiting time for a driving test is between four
and six weeks – although currently this is extended to approximately seven weeks. This does
not, of course, take into account TT Week when tests are not conducted.
I am aware of recent delays in processing applications for driving tests which led to applicants
receiving notification of a test appointment at short notice. This was due to a staff resource
issue and an unusual surge in applications. While this led to longer processing times than the
published standard it had no direct effect on waiting times for driving tests.
The President: Supplementary question, Mr Cannan.
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Mr Cannan: Thank you, Madam President.
In recent correspondence with the Department when I raised this issue, the Chief Executive
informed me that there were various plans in place to improve the process for driving tests and
for turnaround times. Can the Minister tell us what enhancements are currently being planned
for this process to take place?
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And, indeed, perhaps he might like to comment for the future as to whether driving tests and
their applications actually need to be taking place at the Test Centre; and whether we perhaps
might be able to operate a more fluid process for driving tests and the administration process to
take place?
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The President: Minister.
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The Minister: Gura mie eu, Eaghtyrane.
All I can say is that in the past, maybe three or four years ago, we had substantially more
budget and substantially more resource. We are endeavouring to work within our means and we
have a substantially reduced resource now, so whilst I am concerned at the level of service that
has been available in recent months – that is largely down to resource-related issues – I am not
sure that I can justify placing extra resource into this particular area at a time when very
prominent members of the community are suggesting that we need to re-prioritise other
elements of the Department’s work.
The Department, quite simply, does not have enough money to do everything that Members
of Tynwald want it to do. But I am very interested in what the Hon. Member from Michael is
saying and I would be happy to talk to him further to find out a bit more about what he is
suggesting in terms of different operational models – we are always interested in that in the
Department.
POST OFFICE
24. Regent Street Post Office –
Long-term future
The Hon. Member for Douglas East (Mr Joughin) to ask the Chairman of the Post Office:
What the long-term future is of the old Regent Street Post Office?
The President: Hon. Members, I understand that you have been notified that Question 24
was listed incorrectly and it should have been down for Oral Answer.
So I will at this point invite the Hon. Member, Mr Joughin, to put his Question.
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Mr Joughin: Thank you, Madam President.
I would like to ask the Chairman of the Post Office: what is the long-term future of the old
Regent Street Post Office?
The President: Chairman of the Post Office to reply.
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The Chairman of the Post Office (Mr Harmer): Thank you, Madam President.
The Post Office-owned building in Regent Street sits on a site of approximately 7,000 square
feet, with the original two-floor section being built in the late 1800s. The rear section which is
single-storey was developed in the 1900s. The configuration of the building is problematic and
does not represent effective use of the site.
The building is located adjacent to the prime retail zone and within the central part of the
town’s regeneration area. Isle of Man Post Office believes it is important that this building is
used to its best potential for the benefit of Douglas town centre well into the future.
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A professional review, undertaken during 2015, advised that the best future of the site is for
retail activities. The site has the potential to create a 14,000 square feet retail unit over two
floors and provide the opportunity to attract a high-profile UK high street retailer to the Island.
It is the board’s view that a planning application should be submitted for the redevelopment
of the site for retail purposes, and a design team has been appointed to develop a scheme which
is being led by the Department of Infrastructure Project Management Unit. It is anticipated that
a planning application will be submitted during the summer of 2016. The board is also very
aware of the architectural significance of the façade of the property and that any planning
application should seek to retain this, with only alterations made to the street level area to make
it more suitable for retail use and to improve access for customers.
Isle of Man Post Office has Treasury concurrence to this plan, subject to: obtaining the
necessary planning approvals; financial regulations being complied with at all stages of the
project – in particular the Isle of Man Post Office’s FD28 Land Acquisition and Disposal; the Isle
of Man Post Office being able to secure a suitable pre-letting agreement with a likely future
tenant before committing to any development.
The Post Office Act does not currently provide the vires for the Post Office to hold the
property solely for investment return and a small amendment to the Act will be needed to be
brought to Tynwald before any redevelopment is completed.
The first and second floors of the property are currently being rented to the Department of
Infrastructure on a rolling lease and short-term uses for the ground floor are currently being
investigated.
1755
The President: The Hon. Member, Mr Cregeen.
1760
Mr Cregeen: Thank you, Madam President.
Just a clarification from the Chairman of the Post Office: he said a change in the vires and the
legislation will be required prior to the completion of the development. Should that not be a
case of you need to change it before the development, not before the completion? Can he
confirm?
The President: The Chairman to reply.
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The Chairman: Yes, that would be correct.
The President: Does the Hon. Member wish to ask a supplementary? Mr Joughin?
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Mr Joughin: Thank you, Madam President.
While I welcome the proposed development for the site, and I do have concerns from the
Treasury about a potential land grab of the Regent Street Post Office, I am concerned that you
have not got the structure in place to legally go into a commercial letting – and that is the bit
that bothers me.
I am delighted that the Post Office are going to try and retain the building and pay some of
the debt that it has to pay to Treasury that is almost unattainable, but I do worry that you have
not got the structure in place to secure that building for the Post Office and that it could possibly
be grabbed by the Treasury and put into the public land bank – and that is what bothers me.
The President: I am not sure about the question in there; but, Chairman, do you want to
comment?
The Chairman: Thank you.
I would like to thank the Member for Douglas East for his concern, that is exactly why we do
need to come back to Tynwald to get the vires.
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The President: The Hon. Member, Mr Malarkey.
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Mr Malarkey: Thank you, Madam President.
Could the Chairman tell us when the present building is going to be vacated, and the Post
Office is going to come out and be relocated? Do we have a timescale on that?
And on an article that confused me slightly last week, that I never really got a chance to read:
I always thought that the relocation was going into the Pickwick shop in Strand Street and then I
see something about relocation into the old Carnival Bar in Strand Street.
Was I dreaming that day, or are there plans to relocate somewhere else now?
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The President: The Chairman to reply.
1800
The Chairman: Yes, thank you.
I can confirm the Douglas relocation is planned for the weekend of 16th July.
You are quite right, it was in the paper and it is actually, I believe, a really good positive step
and it will be much better than the Pickwick situation. It will go into the Carnival building and will
have a lot more space.
The President: The Hon. Member, Mr Karran.
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Mr Karran: Vainstyr Loayreyder, what can the Caairliagh tell us as far as the issue of the old
Regent Street Post Office? Will it be going out to an open tender; or will we be following the
same disgraceful way that the whole tendering position was, and the issue of the back door
agreement to extend the lease – as far as the people who did not have an open tender in the
first place?
And what policies, under his stewardship, are we going to start seeing with some honest
open capitalism – rather than the crony capitalism that we see far too much at the expense of
opportunity for many, as far as what would be acceptable in the private sector outside this
House?
1815
The President: You may not wish to agree with those comments.
The Chairman.
1820
The Chairman: Thank you, and I thank the Member from Onchan.
Yes, I can confirm it will be an open tender.
OFFICE OF FAIR TRADING
12. Consumer Protection Act 1991 –
Status of housing tenants
The Hon. Member for Douglas West (Mr Thomas) to ask the Chairman of the Office of Fair
Trading:
Whether housing tenants are consumers under the Consumer Protection Act 1991?
The President: Question 12, the Hon. Member for Douglas West, Mr Thomas.
Mr Thomas: Thank you, Madam President.
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I beg leave to ask the Chair of the Office of Fair Trading, whether housing tenants are
consumers under the Consumer Protection Act 1991?
The President: The Chairman of the Office of Fair Trading to reply.
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The Chairman of the Office of Fair Trading (Mr Quirk): Thank you, Madam President.
The purpose of the Consumer Protection Act 1991 is to protect the consumer from unsafe,
dishonest and misleading trading practices. The Act is made up of 10 parts, eight of which make
provision for specific consumer protection, including consumer safety, misleading price
indication, unfair contract terms in consumer contracts, misleading advertisements, the
cancellation of certain contracts and distance selling.
At the very simplistic level the housing tenant is likely to be a consumer for the purpose of
the Act, indeed section 57 of the Act provides for legal vires for the OFT Consumer Advice
Service; and in the last financial year they gave assistance for 189 individual tenants in relation
to housing matters.
The Act is a complex piece of legislation and I add a few words of caution to that simple
answer. Firstly, in dealing with individual matters it is necessary to look at the relevant section of
the Act to fully assess the scope. Secondly, the Act protects the consumer in dealing with the
persons who are operating in the trades or business as a profession so, even if the tenant is a
consumer, the Act may not apply to the landlord if he is not a trader or a business.
I would emphasise that the OFT is there to assist the consumer and I would urge the
consumers, including tenants, who find themselves in difficulties, to seek advice. We are always
there to do our best.
Thank you, Madam President.
The President: Supplementary question, Mr. Thomas.
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Mr Thomas: Thank you, Madam President, and I appreciate the Chair’s answer and note the
Office of Fair Trading’s substantial activity in dealing with complaints about housing and also
providing information about housing.
Would the Chair agree with me that section 62A of the Consumer Protection Act is worth
exploring, then, to address the issues repeatedly raised by the Treasury Minister in respect of
the Landlord and Tenant Bill, because it could be that we could use the new 62A part of the
Consumer Protection Act to address some of the immediate issues in terms of landlord and
tenant issues?
The President: The Chairman to reply.
The Chairman: Thank you, Madam President.
This was discussed in the Branches during the passage of the new Consumer Protection
(Amendment) Act 2016. In principle, a section 62A order could be used in a way to give that, as
we have already said a housing tenant is generally a consumer.
If any UK subordinate legislation protecting housing tenants was considered to concern
matters relating to consumer protection, then it would be in order to apply to the Island as part
of the law – or the Island. It must be emphasised that what is important must be the consumer
protection.
Primarily the relationship to housing legislation rests with the Department of Infrastructure
and the OFT will be happy to work in partnership with the Department to benefit the consumer.
The President: Supplementary, Mr Thomas.
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Mr Thomas: Thank you, Madam President, and I appreciate the Chair acknowledging the
activity of the Housing Division in respect of policy but, with respect, many other parts of
Government are also involved in housing, for instance DEFA with the environmental health
standards, and the Cabinet Office, and the Office of Fair Trading, and Treasury with its benefits.
Does the Chair agree with me that it would be helpful for all of those people to work together
with the Office of Fair Trading to see to what extent they can address issues to do with deposit
protection and with tenancy agreements, to make things better for landlords and tenants using
the new opportunities under section 62A to bring into force in the Isle of Man tried and tested
procedures from Scotland and Wales and England, and so on?
The President: The Chairman to reply. (Interjection)
The Chairman: Thank you, Madam President.
I would always encourage any Government Department to look forward to resolving
particular issues.
Can I just say to the Hon. Member for West Douglas that if he does have any concerns, we
can work together, and the Member himself is in the Department of DOI and I am sure with
other Government Departments if there was to be legislation brought forward for the benefit of
the consumer – and, in this particular case, tenants – we could work together.
The President: The Hon. Member, Mr Karran.
Mr Karran: Eaghtyrane, can the Caairliagh inform this House is there any opportunity with his
Office of Fair Trading to try and get some sort of minimum standards in, specifically when
millions of pounds of taxpayers’ money is being spent, when consumers – being the tenants of
these properties – are living in squalid and terrible conditions?
What action will his Department take in order to help those tenants, those consumers, in
order that they can have the protection of Government to put some recompense on to the
landlords; and not to have these ridiculous situations where we are being told that they can go
and have a petition of doleance, or employ a lawyer, when they simply cannot afford to do so?
1905
The President: The Chairman to reply.
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The Chairman: Thank you, Madam President.
As I did say in my answer, 189 tenants did seek advice. I am not aware of the subject matter
of most of them, but I am sure some of them were to do with the potential conditions …
whether it was a private landlord or whether it was a local authority landlord.
Can I say, too, that we forget there are a number of local authority landlords who are maybe
not performing as well. (A Member: Hear, hear.) But the office of DEFA has environmental
health officers.
The conflict there, as I see it, would be that the environmental health officers work for local
government, and they normally take the prosecutions – so there is a conflict.
I would be happy to look at some sort of legislation; and if a new Landlords and Tenants Bill
comes forward for the future that would be fairer to all parties concerned.
A Member: Hear, hear.
The President: Hon. Members, that concludes consideration of the Oral Questions, the
remaining Questions will be for Written Answer.
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Questions for Written Answer
13. Lord Lisvane’s Review –
Intended procedure for July Tynwald
The Hon. Member for Douglas West (Mr Thomas) to ask the Chief Minister:
What Tynwald procedure the Government intends to use in July 2016 to move the report and
recommendations of Lord Lisvane’s independent review?
1925
The Chief Minister (Mr Bell): The procedures which govern the submission of business to
Tynwald are set out in Standing Orders [of Tynwald Court]. It is the intention to submit Lord
Lisvane’s Report on the functioning of the Branches of Tynwald to the July 2016 sitting of
Tynwald under the provisions of Standing Order 3.11(7).
TREASURY
14. Support for people in nursing, residential or community care –
Social Security expenditure
The Hon. Member for Douglas West (Mr Thomas) to ask the Minister for the Treasury:
How much was spent in the most recent year for which figures are available on supporting
people who live in nursing, residential or care in the community homes using income-related
Social Security payments?
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The Minister for the Treasury (Mr Teare): It is not possible within the time available to
ascertain the information necessary to answer this Question.
Technical assistance is required to query Social Security’s benefit payments system and that
resource is currently not available.
However, based on work previously undertaken Treasury believes that around £10 million a
year is currently paid by way of income-related benefits to, or in respect of, people living in care
homes.
15. Housing support –
Social Security expenditure
The Hon. Member for Douglas West (Mr Thomas) to ask the Minister for the Treasury:
How much was spent in the most recent year for which figures are available on housing costs
from Income Support, Income-based Jobseeker's Allowance and Employed Person's Allowance
budgets broken down by accommodation type (public sector rental, private sector rental,
owner/occupier)?
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1950
The Minister for the Treasury (Mr Teare): The figures below are based on the outcomes of
analyses of claimants’ accommodation types and costs etc. conducted in 2014 but applied to
actual benefit expenditure in the 2015-16 financial year.
There have been no similar analyses conducted by Treasury since then and it would not be
possible for Treasury to conduct such analyses in the timeframe available.
Treasury believes that the results of any further analyses – in terms of claimants’
accommodation types and costs etc. – would not differ materially from those gleaned in 2014.
The figures below are based on the assumptions that –
 where the amount of the income-related benefit payable is less than the claimant’s
housing costs, 100% of the income-related benefit payable is attributable to
supporting that claimant’s housing costs;
 where the amount of the income-related benefit payable is more than the claimant’s
housing costs, the actual amount of the claimant’s housing costs is paid for through
the relevant income-related benefit;
 £10 million per annum of income support is spent supporting people who live in
nursing, residential or care in the community homes and 48% of the remaining
income support expenditure is attributable to supporting claimants’ housing costs.
Income Support:
Accommodation type
% of total amount paid
towards housing costs
Public sector rental
Private sector rental
Owner/occupier
Total
50
35
15
100
£million per annum
paid towards housing costs,
based on 2015-16
expenditure
5.35
3.75
1.61
10.71
* total expenditure on Income Support in 2015-16 was £32.311 million, less £10.0 million in respect of claimants living
in nursing or residential homes etc. = £22.311m x 48% = £10.71 million
Income-based Jobseeker’s Allowance:
Accommodation type
% of total amount paid
towards housing costs
Public sector rental
Private sector rental
Owner/occupier
Total
30
60
10
100
£million per annum
paid towards housing costs,
based on 2015-16
expenditure
0.58
1.17
0.2
1.95
* total expenditure on Income-Based Jobseeker’s Allowance in 2015-16 was £4.072 million x 48% = £1.95 million
Employed Person’s Allowance:
Accommodation type
Public sector rental
Private sector rental
Owner/occupier
Total
% of total amount paid
towards housing costs
45
35
20
100
£million per annum
paid towards housing
costs, based on 2015-16
expenditure
2.07
1.61
0.92
4.60
* total expenditure on Employed Person’s Allowance in 2015-16 was £9.581 million x 48% = £4.60 million
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16. Means-testing policy –
Operation and implementation
The Hon. Member for Douglas West (Mr Thomas) to ask the Minister for the Treasury:
If he will make a statement on the operation and implementation of means-testing policy?
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The Minister for the Treasury (Mr Teare): Treasury already has responsibility for meanstesting policy and operation, specifically in relation to income-related Social Security benefits
and civil legal aid.
In approving the document entitled, ‘Securing a sustainable future for our Island: An update
to the Agenda for Change’ in July 2015, Tynwald endorsed as Government policy that, whilst
protecting the vulnerable, the Government will continue to look at means and needs testing in a
consistent and equitable way.
This project is being taken forward by the Cabinet Office under the political auspices of the
Social Policy and Children’s Committee with the ultimate objective of introducing a single
means-testing process. Treasury continue to be involved in this project in order that legislative
and operational issues in respect of this objective are considered.
HM ACTING ATTORNEY GENERAL
17. Public Services Commission Act 2015 –
Statutory powers over public documents
The Hon. Member for Michael (Mr Cannan) to ask HM Acting Attorney General:
Whether the Public Services Commission Act amends, revises or consolidates the Civil Service
Act 1990; if not, whether section 16(3)(a) of the Interpretation Act 1976 can therefore be
applied to public documents under the Civil Service Act; if not, whether section 15(3) of the
Interpretation 1976 would apply to any public document created under a power within the
Civil Service Act 1990; and whether statutory regulations can exist by familiarity without any
statutory power to preserve or create regulations?
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1980
The Acting Attorney General: The Public Services Commission Act 2015 (‘PSCA’) established
the Public Services Commission (‘PSC’) as the body responsible for the employment of public
sector employees. The PSCA essentially:
 replaces the old Civil Service Commission (‘CSC’) with the PSC and makes provision in
relation to public sector employees;
 substitutes references to the CSC throughout the statute book with references to the
PSC; and
 repeals the Civil Service Act 1990 (‘CSA’).
The Interpretation Act 1976 (‘IA’) applies to enactments (including Acts and public
documents – and provisions thereof) unless there is something in the context of the enactment
which is inconsistent with such application. The term ‘public document’ is defined widely and
effectively includes both legislative and non-legislative public documents.
As a starting point, I certainly consider that one could regard the PSCA as including
substituting provisions for the purposes of section 16(1) of the IA. The PSC effectively substitutes
the CSC (right across the statute book) and the PSCA contains provisions which might be
considered to be re-enacted provisions of the CSA. There is a wide overlap of functionality.
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2015
As to whether or not section 16(3)(a) of the IA applies to public documents made under the
CSA, that is a more difficult matter and I would really need to consider the relevant public
document to determine whether there is anything in it (or in the CSA or PSCA) which might oust
the application of the IA.
It would be too simplistic to say at this stage whether or not section 16(3) of the IA would be
capable of having effect. The starting point for section 16(3)(a) is that for public documents
there should be corresponding provisions in each of the respective enactments (CSA and PSCA). I
say that because section 16(3)(a) confers effect on public documents as if they had been made
under the corresponding provision of the substituted enactment.
So, one would really need to examine the public document and the corresponding provision
in each of the CSA and PSCA to determine whether a public document made under the CSA
could be construed as taking effect as a public document under the PSCA (on the basis that it is
effectively an amended or revised provision of the CSA).
Where a public document was made under the CSA and there is no corresponding provision
in the PSCA, it would be more difficult to sustain an argument that section 16(3)(a) would have
effect. However, even if that is the case, the matter is not settled as section 16(3)(b) may be
capable of covering the situation. Section 16(3)(b) of the IA provides authority that, in certain
circumstances, where nothing in the substituted enactment (PSCA) relates to the same subject
matter, the repealed enactment (CSA) stands good and is to be read and construed as
unrepealed so far as is necessary to give effect to the unrepealed enactment (PSCA). So, if there
is a power to do something in the CSA but there is no equivalent power in the PSCA, there is still
scope for the provision to take effect under the PSCA if that is necessary to give effect to the
PSCA.
When considering statutory regulations, I do note the power in section 4(5) of the CSA for the
CSC to make regulations as to the conditions of service of civil servants. There is no directly
equivalent regulation-making power under the PSCA. However, there is an express provision in
section 8(1) of the PSCA that a public sector employee is employed on the same conditions as
those which previously applied (under the CSA). So, whilst such regulations may not have been
expressly preserved under the PSCA or the IA, there are arguments that they would continue to
have effect. This is supported by section 5(1) and (2) of the PSCA, which enable the PSC to
determine the terms and conditions of employment of public sector employees.
These are just general views given in the absence of any specific factual matrix. I do accept
that if section 16 of the IA does not apply then section 15(3) of the IA may have effect (unless
the context otherwise requires – see above). However, that all depends on the particular
circumstances of the case.
I do not feel I can say much more about the matter generically and I would need to be
directed towards specific documents to enable me to give a more detailed opinion.
18. Suspended Member of Tynwald –
Whether legally disqualified
The Hon. Member for Douglas South (Mrs Beecroft) to ask HM Acting Attorney General:
Whether a suspended Member of Tynwald has committed an act of disqualification under the
Representation of the People (Amendment) Act 2015; whether such a Member can stand for
election; and, if he can, whether his seat would be vacated under section 18 of the Isle of Man
Constitution Amendment Act 1919 if, as a result of his behaviour, his suspension continued for
over six months?
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The Acting Attorney General: Whether a suspended Member of Tynwald has committed an
act of disqualification under the Representation of the People (Amendment) Act 2015?
The Representation of the People Act 1995 (as amended by the 2015 and 2016 Amendment
Acts) (‘the 1995 Act’) contains provision regarding disqualification at section 9B (extract
attached). The disqualifications listed therein relate to offices from which certain existing office
holders are prevented from being nominated/appointed e.g. ‘Neither the Speaker nor an acting
Speaker nor the Deputy Speaker is eligible for nomination or appointment as Chief Minister or as
a Minister’. The disqualifications do not provide for circumstances such as the suspension of a
Member of Tynwald.
(Section 5A of the Constitution Act 1990 contains similar provision regarding the eligibility of
office holders. Similarly it does not address suspension of a Member of Tynwald.)
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Whether such a Member can stand for election?
Eligibility to stand as a candidate for the House of Keys is covered in section 1 of the 1995
Act. An extract is attached; (but unless having been suspended under the Standing Orders of
Tynwald could possibly constitute an incapacity under any other Act, which is unlikely) there are
no provisions within section 1, which having been suspended as a Member of Tynwald would
appear to breach. As such, there would appear to be nothing to prevent an MHK who has been
suspended from Tynwald from standing for re-election.
If he can, whether his seat would be vacated under section 18 of the Isle of Man Constitution
Amendment Act 1919 if, as a result of his behaviour, his suspension continued for over six
months?
No; this provision applies to elected Members of the Council only. The provision which
applies to Members of the House of Keys is in the Representation of the People Act 1995,
section 6 (2) and (3):
(2) The Keys may by resolution declare the seat of a member of the Keys to be vacant where he or she —
[…]
(b) fails to attend at least three-quarters of the total number of sittings of the Keys and Tynwald within any period
of 12 months.
(3) For the purpose of subsection (2)(b) a member of the Keys shall not be treated as failing to attend any sitting
of the Keys or of Tynwald in respect of which the member is granted leave of absence by the Speaker or the Keys,
or by the President of Tynwald, as the case may be.
ECONOMIC DEVELOPMENT
19. Isle of Man Steam Packet Company –
Details of proposed investment
The Hon. Member for Onchan (Mr Karran) to ask the Minister for Economic Development:
Whether the promised £170 million investment in the Isle of Man Steam Packet company is
funded by a Portuguese bank; what it is to be spent on; whether the investment sum will be
added to the existing debt of £110 million; what effect this will have on ticket prices; and why
he has not considered a service provider who can come to the Island free from debt and able
to provide passenger and freight passage at more affordable rates?
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The Minister for Economic Development (Mr Skelly): As the Department of Economic
Development has no responsibility for the User Agreement, the Department of Infrastructure
has provided the following response:
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The Isle of Man Steam Packet Company has put forward an offer for a new strategic sea
services agreement which will total around £170 million investment in new ships, fare subsidies
and revenue sharing with Isle of Man Government.
To answer the Hon. Members first question the investment will be funded by shareholders.
Although the Isle of Man Steam Packet Company is to a large extent owned by a Portuguese
bank, it will have access to the same funding route as are open to other private companies and
the Department of Infrastructure cannot confirm the likely arrangements for funding the vessel
investment.
In terms of what the £170 million is to be spent on, the Hon. Member is referred to
Answer 1.9 given by the Minister for Infrastructure at the sitting of Keys on 14th June 2016
which listed the breakdown of the various components of the offer and also referred to the
literature given out publicly by the Steam Packet.
The Department of Infrastructure understands that the Isle of Man Steam Packet Company’s
debt presently totals approximately £90 million. This debt will be reduced to zero before the end
of the current User Agreement in 2026. The only new debt within the new offer is £65 million for
the capital replacement of the Ben My Chree and the Manannan vessels. If a new strategic sea
services agreement is put in place prior to 2026, then the new capital debt of £65 million will be
added to whatever ‘old’ debt (from the £90 million) is left at the time of the new agreement. In
any event, by 2026, even after this investment, debt will be no higher than £65 million in 2026.
The current debt held by the Isle of Man Steam Packet Company and any new debt should a
new agreement be entered into, has not and will not affect current or future freight charges and
passenger ticket prices because of the price cap within the proposed agreement.
In answer to the last of the Hon. Member’s questions, the Department of Infrastructure could
indeed consider an operator to come to the Island free from debt. owever, we are not in a
position to do so until close to the end of the current User Agreement, in other words, 2026,
which is exactly when the Isle of Man Steam Packet Company would also be free of debt.
I would reiterate that any debt in the Isle of Man Steam Packet Company has not affected the
charges. Indeed in January 2015, TravelWatch IOM undertook an exercise to compare passenger
fares for Irish Sea ferries based on online enquires made for a return journey for a car with two
adult and two child passengers, and the Steam Packet fares were both highly competitive and
affordable. In respect of freight charges the recent period of competition saw a decrease in
freight charges of more than 40%. However, it is fair to say that charges below this level are not
sustainable, within a small market on a long-term basis, without public subsidy.
ENVIRONMENT, FOOD AND AGRICULTURE
20. Raggatt Tip –
Leachate contaminants
The Hon. Member for Onchan (Mr Karran) to ask the Minister for Environment, Food and
Agriculture:
If he will make a statement about the contaminants within the leachate from Raggatt Tip
which requires it to be transported by tankers to Peel Harbour and discharged into Peel Bay
via the sewage outfall pipe rather than be discharged directly into the River Neb?
The Minister for Environment, Food and Agriculture (Mr Ronan): Levels of a range of metals,
ammonia, polycyclic aromatic hydrocarbons (PAHs) and polychlorinated biphenyls (PCBs)
identified in the leachate draining from the Raggatt facility exceed relevant Environmental
Quality Standards (EQSs) and make it unsuitable for direct discharge to the River Neb.
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PAHs are products of the degradation or burning of hydrocarbon fuels such as coal, oil and
petrol.
PCBs are a group of organic compounds used in the manufacture of plastics, as lubricants,
protective coatings and dielectric fluids in transformers.
Discharge directly into the marine environment provides a much better rate of dilution than a
river the size of the Neb and as such is a more appropriate solution.
The Isle of Man is committed to achieving compliance with the Oslo/Paris or OSPAR
Convention on marine pollutants in the North Atlantic. With this in mind we are working with
colleagues in other Government Departments on trials to assess a possible way of reducing the
levels of contamination within the leachate.
Development of these trials is progressing and I would be happy to supply an update to Hon.
Members when the details have been finalised.
I can confirm that we do not currently have a facility on-Island that is suitable for the storage
of the Raggatt leachates.
21. Private sector housing –
Condition and plans
The Hon. Member for Douglas West (Mr Thomas) to ask the Minister for Environment, Food and
Agriculture:
If he will make a statement about the condition of private sector housing and his plans in
respect of this matter?
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The Minister for Environment, Food and Agriculture (Mr Ronan): The Department’s 2015-18
Business Plan has an objective to ensure that the community has access to safe housing and is
committed to the Chief Minister’s key priority to protect the vulnerable. To this aim the
Department strives to improve the standards in private sector housing and to recommend the
creation of policies and legislation related to same. As an example Regulations relating to
minimum standards in flats have recently been updated in the Housing (Registration)
Regulations 2013 and the Housing (Standards) Regulations 2013 with the inclusion of minimum
standards for houses in multiple occupation (HMOs) which prior to 2011 were specifically illegal.
Currently, Environmental Health Officers (EHOs) within this Department routinely inspect
premises upon request from the owner and/or occupier of premises, and through referrals from
other Government agencies, under the provisions of the Housing Acts 1955 to 2011. Assessment
is made as to the fitness of the premises and, predominantly in cases where premises are
occupied by tenants and where they fall short of housing standards, the owner and/or landlord
are written to in accordance with the Department’s enforcement policy. The duty is placed on
local authorities to inspect premises in their respective districts to ascertain whether any house
therein is unfit for human habitation. The Department’s EHOs act as authorised officers for local
authorities for all housing related matters. This arrangement ensures that all inspection and
enforcement of housing legislation is carried out in a consistent way across the Island.
In 2007 the former Department of Local Government and the Environment undertook a
private sector House Condition Survey (HCS) of approximately 1,600 private dwellings across
nine major areas of the Island. The purpose of the survey was to measure local housing
standards against the ‘fitness standard’, as defined by sections 4 and 92 of the Housing Act 1955,
and to benchmark the Island’s housing stock against UK housing standards, i.e. Decent Homes
and the Housing Health and Safety Rating System. At that time, data collected through the HCS
was used to assess the condition of private housing as a guide to housing strategy development
on the Island for the next five years. Surveys of the condition of the housing stock in the Isle of
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Man were regularly conducted every five years since 1984, as recommended by UK Guidance,
the last of which was completed in 2007-08.
New guidance was issued in 2000 by the UK Department of the Environment, Transport and
the Regions (DETR, now Communities and Local Government) on Collecting Managing and Using
Housing Stock Information. The frequency of house condition surveys was updated in this
guidance to ‘when there is a need for information because earlier information no longer reflects
the condition of the stock as it does not produce information to meet current requirements’.
This seems a more appropriate approach than simply every five years and the Department has
taken account of the changed recommendation.
The Department needs to possess accurate data regarding the condition of the private sector
housing stock and a means of assessing whether its policies are succeeding or otherwise in order
to ensure that everyone has access to safe, healthy and affordable living accommodation. In
order to make an accurate assessment of the current private sector housing stock it will be
necessary to undertake a HCS.
HCSs in the past have employed the services of specialist consultants to devise and control
the survey methodology and to assess and present the data collected in an appropriate and
understandable manner. A random sample of the housing stock is chosen as a representative
sample of the whole and all premises are physically inspected by suitably qualified assessors. All
premises are, ideally, inspected internally and externally and the occupant(s) interviewed.
Since 2014 over 2800 housing inspections have been carried out by Environmental Health
Officer’s as part of their normal activities and therefore the Department continues to obtain
informal perspectives.
The HCS carried out in 2007 has assisted Government by providing information that can be
utilised to target resources in specific areas and provide information across other areas of
Government. Examples include identifying common deficiencies in local housing such as single
glazed windows and lack of insulation, information on smoking in the home, fuel poverty and
vacant properties. Government initiatives such as the House Improvement and Energy
Conservation Scheme 2013 and similar were designed to address issues identified in the HCS.
Typically HCSs enable the following:
 housing authorities to assess the need for improvement and repair to the
housing stock;
 a systematic and comprehensive assessment of the condition of the housing
stock;
 housing authorities (Government) to develop effective housing policies;
 housing authorities to judge how effective existing policies and investment
programmes are in meeting housing need;
 the collection of information related to energy efficiency;
 the inspection and assessment of private sector dwellings in accordance with
the Housing Health and Safety Rating System (as adapted for use in the Isle of
Man) relating to the health, safety and well-being of the occupants;
 interviews/surveys of occupant(s) of dwellings with a view to gathering
information (not available by other means) related to health problems and poor
housing, and problems associated with accommodation available to children
and young persons; and
 the collection of information related to income and/or available equity with a
view to policies regarding Government loans/grants.
Due to the need for reasonable daylight to enable the external inspection of premises,
surveys are best carried out between the spring and autumn. The Department is currently
seeking to commission another HCS in the spring of 2017.
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HOME AFFAIRS
22. HM Prison Jurby –
Population and staff
The Hon. Member for Onchan (Mr Karran) to ask the Minister for Home Affairs:
What the average population of HM Prison Jurby was in the past 12 months; what the
maximum number of prisoners was in each month since the prison was opened; and how
many prison staff on 1st May 2016 were (a) prison officers (b) administrative staff and
(c) support staff?
2175
The Minister for Home Affairs (Mr Watterson): (1) The daily average population of the Isle of
Man Prison, Jurby for the year 1st June 2015 to 31st May 2016 was 79.86
(2) The daily maximum number of prisoners in custody each month since the prison was
opened in August 2008 is contained in Table 22A:
Table 22A
Maximum Daily Prison Population by Month from August 2008 to June 2016
Max Daily
Month-Year
Population
Aug-08
91
Sep-08
100
Oct-08
101
Nov-08
113
Dec-08
112
Jan-09
115
Feb-09
108
Mar-09
105
Apr-09
107
May-09
116
Jun-09
124
Jul-09
115
Aug-09
116
Sep-09
117
Oct-09
117
Nov-09
117
Dec-09
119
Jan-10
116
Feb-10
115
Mar-10
105
Apr-10
103
May-10
99
Jun-10
105
Jul-10
108
Aug-10
108
Sep-10
103
Oct-10
100
Nov-10
107
Dec-10
109
Jan-11
107
Feb-11
111
Mar-11
120
* Up to 14th June 2016
Month-Year
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Sep-11
Oct-11
Nov-11
Dec-11
Jan-12
Feb-12
Mar-12
Apr-12
May-12
Jun-12
Jul-12
Aug-12
Sep-12
Oct-12
Nov-12
Dec-12
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Max Daily
Population
115
121
120
113
117
115
114
120
121
115
115
114
112
102
112
107
103
97
93
91
87
83
86
86
93
94
97
90
91
97
102
95
Month-Year
Dec-13
Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
Nov-14
Dec-14
Jan-15
Feb-15
Mar-15
Apr-15
May-15
Jun-15
Jul-15
Aug-15
Sep-15
Oct-15
Nov-15
Dec-15
Jan-16
Feb-16
Mar-16
Apr-16
May-16
Jun-16
Max Daily
Population
99
98
95
94
95
90
96
95
94
86
84
87
93
92
90
90
75
75
76
82
80
81
80
84
85
81
82
80
91
93
*93
2180
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(3) On 1st May 2016 there were:
(a) 94 prison staff employed as prison officers (including Governor Grades, Principal Officers
and Senior Officers);
(b) 5 prison staff employed as administrative staff, (including the Head of Business
Operations); and
(c) 22 prison staff employed as support staff (Operational Support Grades).
MANX UTILITIES AUTHORITY
23. Proposed Peel regional sewerage works –
Whole-life costings
The Hon. Member for Onchan (Mr Karran) to ask the Chairman of the Manx Utilities Authority:
If he will provide the whole-life costings for the proposed regional sewage works provision at
Peel?
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2195
The Chairman of the Manx Utilities Authority (Mr Cannan): It is not possible to provide
whole-life costing for the proposed sewage treatment works at Peel at this time.
Whilst there is a viable scheme for this location, and budget provision has been made within
the capital programme, the scheme has not yet progressed to having detailed full and current
option comparisons, including capital and operating cost comparisons.
Operating costs will be dependent on the agreed design and the final location of the new
sewage works, and until such time as costs for the works have been fully assessed, it would be
premature to speculate on what the whole life costs might be.
Tynwald Members will be briefed on the preferred option for the site, including the reasons
why other options have been dismissed, when the assessment process has been completed.
In the meantime, Manx Utilities will continue to work with the Project Management Unit
within the Department of Infrastructure to ensure best value is delivered for the Isle of Man in
respect of these schemes.
SOCIAL POLICY AND CHILDREN’S COMMITTEE
25. Means-testing policy –
Options, action plan and timetable
The Hon. Member for Douglas West (Mr Thomas) to ask the Chairman of the Social Policy and
Children’s Committee:
What means-testing policy options are under consideration for housing, social security and
other Government provision; and what the action plan and timetable are for bringing these
policy options for decision by Tynwald?
2200
2205
The Chairman of the Social Policy and Children’s Committee (Mr Watterson): There are a
wide range of policy options available in respect of means testing. Before determining the right
ones it is important that we agree the principles under which any means testing system should
operate, and this involves for example considering issues such as household composition and
whether capital should be taken into account in assessing means.
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The Social Policy Committee have considered and agreed some of these principles and the
next step is for the Cabinet Office in conjunction with Departments to assess current means
testing systems against these to understand the level of work required to align the different
systems in place at present.
In terms of a timetable I am not able to be definitive. The current system is complex and to
simplify it we are likely to need legislative changes and considerable input from a number of
different organisations. There will also be a technological aspect to this as it is clear to me that a
card-based system for providing benefits will offer the best opportunity to develop a more
flexible and responsive way to protect the vulnerable.
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Order of the Day
4. Future of Property Taxation –
Statement by a Member of the Treasury
2215
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The President: We turn to Item 4 on the Order Paper. I call on the Member for the Treasury,
Mr Henderson, to make a statement.
The Member for the Treasury (Mr Henderson): Gura mie eu, Eaghtyrane.
Hon. Members will recall that the Treasury Minister made a commitment as part of the
Budget speech to revert to Tynwald that the June sitting with an update as to progress with
rating reform. I am pleased to provide such an update today.
It may assist the Court if I start with a very brief overview of some of the recent background
to this issue. Following the debate in Tynwald of October 2014 regarding the report of the Select
Committee on the Domestic Rating System, Treasury has worked to move forward with the
implementation of its recommendations. Treasury initially considered how best to deliver the
recommendations and returned to the January 2015 sitting with an outline delivery plan, and
was successful in gaining approval for funding to further progress matters.
As part of the submission seeking funding, Treasury advised Tynwald that it:
considers revaluation of residential properties should be carried out on the basis of capital values. This will require
changes to primary legislation to have effect, in the meantime there would be little to be gained by revaluation on
the basis of rental values and this will not be progressed.
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As a matter of priority following the temporary appointment of an officer to move the project
forward, Treasury carried out an Island-wide public consultation exercise, including consultation
with all local authorities. The feedback has been used to inform the development of policy
underpinning the future of domestic rates. In the period since then, presentations have been
made to the Council of Ministers and to Tynwald Members on the future of domestic rates, and
Treasury considers that it has developed a future model for the calculation and collection of
domestic rates based on capital values which can be used as the basis for drafting a new Bill to
revise the existing statutory basis.
To validate this model, including the concept of self-assessment, Treasury recently carried
out research asking property owners to declare the capital value of their residential properties
as at 14th June 2016. I am pleased to advise that, thus far, over 8,500 responses have been
received to the request for information representing almost 22% of residential properties, with
responses from all areas of the Island by way of owned and rented properties. We expect this
number to increase as the majority of rates payments are made before 30th June 2016 – the last
date for receipt of a discount.
Whilst further analysis of the research is required, the available information validates the
proposed model based on capital values demonstrating that it would address anomalies
resulting from valuations currently being based on rental values in 1969.
Furthermore, this research makes it much easier to identify the ‘winners’ and ‘losers’ and
give an indication of how property taxes payable on individual properties will vary. The research
thus far indicates that the majority of residential property owners will see property tax – rates –
demands change by no more or less than around 10% due to revaluation. Consideration will be
given by Treasury to publishing the final outcomes of this data collection but it is clear from the
initial feedback that there will be winners and losers from the implementation of change; and
Treasury will work now to provide more detail to the Council of Ministers and Members of
Tynwald in relation to expectations in this regard.
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Treasury and the Department of Infrastructure have also further considered the introduction
of a rate rebate scheme based on existing legislation which takes ‘account of an individual's
ability to pay’ which was one of the recommendations accepted by Tynwald and one which has a
degree of support in the public consultations.
Taking account of the ‘ability to pay’ would undoubtedly involve an element of means
testing. There is ongoing work on this matter by a cross-Government project to introduce a
single means testing process to avoid duplication of resources and complications for the public.
It would seem reasonable that the outcomes of this project should inform the issue in respect of
rates rather than implement a stand-alone process for rates, which may conflict with what is
decided in the future on a cross-Government basis.
As previously advised, whilst the proposed Rating and Valuation Bill remains within the
Government's legislative programme it has not been possible to include it within the priority list
of legislation progressed during the life of this administration. However, the legislative picture
has not been static. The Government supported an amendment to the rating legislation tabled
by the Hon. Member for South Douglas, Mr Malarkey to deal with the issue of ruinous buildings.
This important change will come into effect in due course assuming the successful passage of
the Local Government and Building Control (Amendment) Bill.
In summary, Eaghtyrane, Treasury has now taken forward public consultation in respect of
changes to the rating system and also involved the public in data gathering to greater
understand the impact of a proposed move to capital banded valuations and, whilst there are
some policy issues that will need resolving, the overall concept is considered valid.
I think all Hon. Members of this Hon. Court will agree that whilst progress has been made, we
are not quite where we could have been in terms of reform in this important area. However,
given where we are in the electoral cycle, it will now be a matter for the new administration to
determine how, and at what pace, reform of the rating system is taken forward.
Gura mie eu, Eaghtyrane.
The President: I will take questions. The Hon. Member, Mr Cretney.
2285
Mr Cretney: Yes, the first question is: could the Hon. Member indicate why it is he who is
presenting this statement today and not the Minister?
Mr Henderson: Yes, Eaghtyrane, it is because I have got delegated responsibility for the area
concerned now.
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2295
The President: Hon. Member, Mr Turner.
Mr Turner: Thank you, Madam President.
Could the Hon. Member for the Treasury explain: did this survey ask the question of how
many people lived in these properties? Rates are about services and the number of people is
highly relevant.
The President: Hon. Member.
Mr Turner: No, is the answer.
2300
Mr Henderson: As I understand it, Eaghtyrane, it was quite a reasonable questionnaire and I
think that question was asked, but having said that I will determine to have that information
circulated to Hon. Members just to make sure that we have a clarification of the matter.
2305
A Member: The values are irrelevant.
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The President: The Hon. Member, Mr Thomas.
2310
2315
2320
Mr Thomas: Thank you, Madam President and to the Member for his statement.
Obviously at the beginning of this administration in the Agenda for Change there was a clear
statement that this administration would introduce a fairer and more consistent approach to
domestic rating. (A Member: Hear, hear.)
Later on, in February 2014, there was a clear statement at the time of the sewerage charge
that that would be introduced, so that we would vote to introduce the sewerage charge and
then rate.
Can the Member advise why it is precisely that we have not actually got the legislation or the
valuations or anything else that this administration is set out – is it to do with lack of time inside
Tynwald and its branches? Is it to do with Treasury issues? Is it to do with drafting? Or perhaps
there are other issues that might have caused the problem for the pledge not to have been
fulfilled.
The President: Can we try and focus on the content of the statement.
2325
2330
Mr Henderson: Gura mie eu, Eaghtyrane.
The answer is quite simple. The legislative timetable that we would have to input into to get
our slot was weighted heavily and as a result we have not been able to obtain our slot. It is
outwith the actual Rating Section’s control and the project as was envisaged by Tynwald.
But I can say to the Hon. Member in this Court, Eaghtyrane, that we have tried our utmost to
honour our obligations to the Court and the Select Committee’s recommendations and have
produced quite a voluminous amount of work, which is parked at the minute, but it can take off
at the next administration very quickly. It is not a case of work lost; it is a case of work that can
be progressed, and I am sure it will continue.
President: The Hon. Member, Mr Quirk.
2335
2340
Mr Quirk: Thank you, Madam President.
Can I ask the Member responsible, would he be able to provide us with some simple stats
regarding the 8,500 people or 22%, simply on a north, south, east divide to get a feel of what
people contributed to?
On the statement he mentions the Government legislation; probably, yes, we failed on that,
but as one of the Members in this House that is guaranteed a seat the next time around could
he give us an indication here today that he will make it one of his priorities in the next House?
The President: Minister … Member.
2345
2350
Mr Henderson: Yes, I will accept that, Eaghtyrane! (Laughter)
I thank the Hon. Member for his question, as long as I remain in the current position I am in
then the answer is yes, because I am quite conscious that I can assure him that there is a
considerable amount of work and effort gone into this. And I think I can speak for the Treasury
Minister as well that the last thing we want to do is to have it put to one side completely, when
in fact we are the closest now than we have ever have been in regards to progressing this
matter. So, certainly we would wish to see this progressed.
The President: The Hon. Member, Mr Singer.
2355
Mr Henderson: Sorry, Eaghtyrane. Mr Quirk talked about stats; I think the best way to
answer that is that out of the 8,500 or so responses we have had, they are Island wide and they
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are a general breadth of different types of properties as well. So we have had a good selection, if
you like, coming through.
2360
The President: The Hon. Member, Mr Singer.
2365
Mr Singer: Thank you, Madam President.
If I can take up that last point, the Member says he has had a good response and a good
spread, but it depends how accurate that actual spread is. I think we have only had a 22% return
and a lot of people I know have said, ‘I am not going to tell them the value of my house’ and
ignored it.
A Member: Absolutely.
2370
The President: Can we have a question, sir, please?
2375
2380
Mr Singer: Sorry, I am coming to the question now.
Can the Hon. Member tell me in relation to capital values, does he not think that there is a
difference in capital value for what an estate agent may value a house and what the purchaser
themselves might value a house? Does he also not think that perhaps the Government Valuer
should be testing some of these self-assessment returns or is he doing that? (Mr Henderson:
They are.) Therefore, if they are doing that can he give me a guide as to whether house owners
are actually under or overestimating the values of their properties, because they know exactly
where the banding is and they think they will pay less rates if they go just under the banding,
rather than go just above it?
The President: Hon. Member.
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2395
Mr Henderson: Gura mie eu, Eaghtyrane.
I thank the Hon. Member for Ramsey for his large menu of questions there and plethora of
issues.
However, I can assure him that rather than give out a disingenuous perception message from
the Court today, Eaghtyrane, yes, it is true we have had 8,500 responses back, but that is only
the start. We are hoping for, obviously, the fullest response rate we possibly can, and as I said in
my statement, the nearer to the rate rebate date that we come to, I am sure we will see the
response rate go up even further.
Most people I would say, Eaghtyrane, are quite happy to return the information for us, and if
one or two do not wish to participate, I think, when this eventually rolls out, they might find
themselves at a divergence with what actually they ought to be doing, and I put it no simpler
than that.
The Government valuers have been watching the process and so far initial findings, with the
initial tranche of forms coming back in, they are quite surprised at the accuracy and
commitment from people returning the information.
2400
The President: The Hon. Member, Mrs Beecroft.
2405
Mrs Beecroft: Thank you, Madam President.
I just have a couple of queries, if I may. Firstly, I am delighted to hear of the rent rebate
scheme, I think that would be very welcome. Has any consideration been given to a discount
scheme for single occupancy? (Interjection by Mr Henderson)
And what happens – this is a question for how you actually work it out – if you have got a
street and everybody puts in a different value, and some are over one band and under others
and people will have different values in their head, maybe because they have spent 20 grand on
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2440
a kitchen, they will think their house is worth more. How do you cope with the differences when
all the properties are actually identical apart from the things that people have done to the
internal?
The President: Hon. Members, I don’t think we need … we are going to get into the detail of
how the scheme will be working, but if you can assist.
Mr Henderson: I will try my best, Eaghtyrane.
As I said in the statement, we are quite impressed with the valuations that self-assessment
has produced so far, including the very question that the Hon. Member has posed, which I thank
her for on that. Where streets or estates have submitted forms and the Government Valuer and
our section at Rates have looked at that particular issue and found that what people have been
putting back in has been reasonably and fairly accurate on what they have done.
We will be running checks as we go along, but I think the thing is we need to move the
general principles forward at the minute, and then see how the whole process beds in to take it
forward from there and what we may need to do, or what may not need to do in regards of
checks.
The discount I mentioned was early payment of rates, not a rebate scheme, if I can just clarify
that point.
The President: The Hon. Member, Mr Karran.
Mr Karran: Eaghtyrane, allowing for the fact of the seriousness of the situation, can the
Shirveishagh – without losing his job – inform us why we have such a delay on such a vitally
important issue? Allowing for the fact that there was a paper produced for 2020-21 that a house
with a rateable value of £200 would be paying £1,072 for sewerage, £364 for water, which
makes them pay just £1,436 by 2020. That does not include the local authority rates; it does not
include the burial rate, the waste charges and the more services that have been put on to the
ratepayer from the taxpayer.
Can he explain why we have still got this situation that seems to appear, that it is once again
country versus town, where we have these ridiculous discounts that have been allowed to
develop where an ideal property, as the former Chairman of the Water Authority, can have a
50% discount or 60% –
Mr Henderson: It is not relevant.
2445
Mr Karran: It is not irrelevant.
The President: Hon. Member, we are straying a bit.
2450
Mr Corkish: Hear, hear.
Mr Henderson: Widely.
The President: I think the question is: why is it not happening?
2455
2460
Mr Karran: Eaghtyrane, I think it is important that we realise that this is not something that is
new, but once again we need clear, defined accountability for why this has not been done. (A
Member: Hear, hear.)
This is a major fiscal nightmare that has come along for a large section of our community, and
it is made even worse when we have subsidies on people who can well afford to pay a lot more
not living in the town.
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The President: The question is: why has it not been done? (Laughter)
2465
2470
2475
2480
Mr Henderson: Yes, I thank you for the clarification on that, Eaghtyrane.
I agree, we are not here to debate the peripheral issues of what I have stated as the position
with regards to the Rating Section of Treasury, Eaghtyrane.
The point again is, and I must apologise to Hon. Members for labouring it, but the fact of the
matter is that we have done our work, as committed to Tynwald, and quite a huge chunk of
work at that, to the point where, unfortunately, due to the general legislative programme we
cannot get the slot in time that we need to bring it back to the current parliament, Eaghtyrane. It
is plain and as simple as that.
As disappointing as it is – and I agree with the Hon. Member – I am disappointed as well,
given the work that has been done – however, that is the situation as it is. We cannot just wedge
it in, and I do not want it rushed.
However, it will be on the stocks as a priority item, I am sure, for the next administration
which in fact, Eaghtyrane, when we think about it, is not that very far away anyway.
Gura mie eu.
The President: Hon. Members, the Court will now adjourn and the adjournment will be until
2.30 p.m. I would remind CPA members that there is a meeting, I think, at 1.45 p.m.
The Court adjourned at 1.12 p.m.
and resumed its sitting at 2.30 p.m.
Procedural
The President: Please be seated, Hon. Members. It is quite warm, so please feel free to
remove jackets.
2485
Mr Henderson: Thank you, Eaghtyrane.
5. Dependability Ltd –
Statement by the Minister for the Treasury
The President: We move on to Item 5. I call on the Minister for the Treasury to make a
Statement on Dependability Ltd.
2490
2495
The Minister for the Treasury (Mr Teare): Thank you, Madam President.
Hon. Members will be aware that in May 2014 Treasury contracted Dependability to
undertake assessments of claimants as part of their personal capability assessments (PCAs) or
incapacity benefits.
On 19th May this year Treasury became aware that one of Dependability’s assessors did not
hold the required registration necessary in law to conduct face-to-face assessments. I was
extremely concerned about this and the potential impact on the PCA process, and indeed upon
the validity of Statements that both Mr Henderson and I had made regarding the assessment
process.
Following a further investigation, I wrote to Hon. Members on 26th May, setting out the issue
that had been identified, with a sincere apology from both Mr Henderson and me for
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Statements that had been made in good faith. I wish to formally apologise to this Hon. Court for
the Statements made regarding the registration of this assessor.
The assessor in question who was not duly registered has carried out a total of 20 face-toface assessments which resulted in a decision that they were capable of work. Ten of these
assessments have been undertaken in recent weeks. We have contacted these people to let
them know their benefits will continue and they will be called in for another assessment by an
appropriately qualified assessor. The other previous 10 cases have also been contacted and their
benefits will be reinstated and backdated where appropriate, and those claimants will be called
in for another assessment in due course.
At this stage I am advised by the Acting Attorney General that I am unable to comment
further on the matter.
Thank you, Madam President.
The President: In that case, we will have to be very cautious if there are questions. Could I
take the learned Attorney’s advice: are some questions in order on this?
2515
The Acting Attorney General: Yes.
The President: The Hon. Member, Mrs Beecroft.
2520
2525
Mrs Beecroft: Thank you, Madam President. I am aware of the need to be cautious of what
we say today.
I would ask the Treasury Minister if he will give us another update as soon as possible, and
July Tynwald at the latest.
The President: Minister.
The Minister: Yes, I will certainly undertake that. We will do our level best to come back to
this Hon. Court as soon as possible, which will be July, and give you an update as to the position
we are in at that time.
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The President: The Hon. Member, Mr Singer.
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Mr Singer: Thank you, Madam President.
Can I ask the Hon. Minister: when and how did the Department find out about the nonqualification of this particular person?
The President: Minister.
2540
The Minister: It came up as part of one of the appeals processes. We became aware of it on
19th May and we immediately reacted. The Department’s priority has been to concentrate on
the claimants, and that is what we have done ever since we became aware of this issue.
The President: The Hon. Member, Mr Cretney.
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Mr Cretney: Thank you, Madam President.
I would just like to ask the Hon. Minister the same question I asked on the last Item, and this
is why he is making this Statement. On the last Item I was told that the Member responsible was
answering the question. On this one the Member responsible is not but the Minister is, and I just
think that, given the intemperate comments that some of us have been subject to on this
matter, (Mrs Beecroft: Hear, hear.) we deserve better.
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The President: Minister.
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The Minister: Once again, I do apologise. I did not wish to cause anybody any umbrage. We
have acted in good faith.
Treasury has delegations in place. What we try to do is to apportion the work between
Treasury Members and the Minister, for Tynwald, and at times when one of the Members, or
indeed myself, has a significant workload then we try to parcel it out. But there was no
intention, certainly on my part or Mr Henderson’s part, to offend anybody.
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The President: The Hon. Member, Mr Singer.
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Mr Singer: Thank you, Madam President.
Could I just pursue the previous question: I asked the Minister when he got to know and he
gave the date; I also asked him how he got to know. My concern is where that information came
from. If he had not got this information, then that person could still, of course, have been doing
the same job. So how did he get to know that this person was unqualified?
The President: Minister.
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The Minister: As I said in the previous answer, we became aware of that as the result of a
sitting of a tribunal. One of our officials who was there immediately relayed it back to the
Department and we took action straight away.
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The President: The Hon. Member, Mr Thomas.
Mr Thomas: Thank you very much, Madam President.
In a completely separate sitting of a tribunal and not in any way connected with the situation
where this incident arose apparently, the tribunal found in favour of a claimant over the
Department but the Department decided to challenge that decision with the Social Security
Commissioner. Will the Treasury Minister advise me that that process will be suspended pending
this process of reconsideration as well?
The Minister: No, it will not, because basically there was an issue relating to one of the
assessors.
The President: The Hon. Member, Mrs Beecroft.
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Mrs Beecroft: Thank you, Madam President.
Following up on what Mr Cretney said earlier, we have been insulted quite a number of times
in this Court and some of the comments have been extremely unpleasant, (Mr Cretney: Hear,
hear.) and whilst I accept the apology from the Treasury Minister (Mr Cretney: Hear, hear.) on
his own behalf and on that of Mr Henderson, I think it would be appropriate for Mr Henderson
to personally apologise to us.
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Mr Henderson: Eaghtyrane, I have got no problem apologising on progressing what we were
trying to do in good faith in the face of some pretty intemperate comments that were blasted at
me. However, there was none meant and I am just trying to do my best with what we have got.
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The President: The Hon. Member, Mr Karran.
Mr Karran: Eaghtyrane, I just hope that the Council of Ministers reflects on the fact that
there is good faith when these things are brought here to actually put some sort of
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parliamentary audit on them. It is good faith not out of just trying to be jaundiced or anything
else (Mr Anderson: Question.) when we raise these issues, and this has been an issue that has
obviously vindicated the Hon. Member for South Douglas, but we need to realise that this is an
issue where good parliamentary process … We need people to actually audit and call foul when
these issues happen, and I hope that people in CoMin will just stop seeing it just as a fact that
we are always opposition.
2610
The President: Hon. Member, that was not a question, as far as I can see.
6. Supplementary Vote –
Department of Health and Social Care –
Expenditure approved
The Minister for Health and Social Care to move:
That Tynwald authorises the Treasury, in respect of the year ended 31st March 2016, to apply
from General Revenue a sum not exceeding £9,943,000 being the additional amount required
by the Department of Health and Social Care in respect of excess expenditure incurred in the
provision of its services.
The President: We will move on then to Item 6, Hon. Members: supplementary vote.
I call on the Minister for Health and Social Care.
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The Minister for Health and Social Care (Mr Quayle): Thank you, Madam President.
During the financial year ended 31st March 2016, the Department of Health and Social Care
exceeded its revenue budget by £9,943,000. This figure represents overspending of 5.4% against
the Department’s net budget for the year of £183.6 million, and I seek the Court’s approval
today for a supplementary vote of this amount.
We are all aware that pressure on the cost of health and social care services continues to
grow both here and across the developed world, and that we are all struggling with the resulting
challenges of providing services which are sustainable. Examples of these pressures in NHS
England are particularly visible to us.
I do not underestimate the seriousness of asking Hon. Members to approve this motion. To
reassure this Hon. Court, I, my political Members, and officers in the Department are working
diligently to ensure that our current financial position improves and know that we must show
evidence of that improvement in the near future. As part of this process it is important that I
explain the reasons for the motion today, and to try to put those reasons into a broader context.
The main components of the overspending in the past financial year were: Noble’s Hospital,
£10.7 million; the costs of treating patients in the UK, £1.1 million; Mental Health Services,
£2.2 million; and Government Catering Services, £1.1 million.
Hon. Members will note that these figures in total are more than the supplementary vote
requested. This is because some service areas came in below their budget in the 2015-16 year,
notably the Children and Families and Adult Services Divisions, where good management,
service redesign and prudence are producing savings. In noting that some parts of the
Department have embraced change, I can also be sure that savings can be generated elsewhere
by applying the same principles.
It is apparent, Madam President, that by far the largest part of the Department’s adverse
financial performance was in Noble’s Hospital. However, this is not a new issue, with figures
from the Pink Book showing that Noble’s Hospital has overspent its budget in each of the past
15 years, despite increases in the Hospital’s actual budget.
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I mentioned previously the challenges facing the health and social care systems of developed
economies. One of them is that we are, on average, living longer. I am sure that Hon. Members
will agree with me that an increasing life expectancy is something to celebrate. However, it also
means that the post-retirement percentage of our population is growing. The healthcare needs
of the elderly tend to be more complicated and expensive, and so the cost of providing care and
treatment for our population is rising. This trend could be offset particularly by better targeted
public health campaigns and initiatives to ensure that we all choose a healthy lifestyle, but this
change in the make-up of our community must be recognised and strategic decisions made in
respect of it.
We are, to some degree, victims of our own success and innovations: as new treatments and
medicines are introduced, so the demand to have them rises. This leads to cost pressure, as
clinicians seek to ensure the best quality of care for their patients.
A particular issue and subsequent pressure in the Isle of Man is the lack of available nursing
care beds. This leads to pricing inflation amongst those private sector organisations providing
what capacity there is and causes pressure on hospital services, where patients remain in highcost beds for longer, or indefinitely, instead of moving into the care system.
I will now give more information about each of the main overspending divisions in turn.
Noble’s Hospital is a modern establishment staffed by hard-working, dedicated staff
committed to providing excellent patient care, and the Island should feel pride in it. However,
we must recognise there are challenges there.
The majority of the overspend at Noble’s relates to staffing costs when covering vacancies
and staff absences. The Hospital’s management has a duty to ensure safe levels of staff to
provide quality care. Competition for professional members of staff at all levels is intense and
the Hospital, despite active programmes of recruitment, currently carries a large number of
unfilled posts. To maintain service provision, these posts are filled by bank or temporary agency
staff. The latter staffing arrangements of course attract significant premiums, and this is
something that we must seek to address in the coming year.
I am acutely aware that more needs to be done at Noble’s to improve efficiency and reduce
waste. We have some cost improvement plans, but in isolation they will not address the ongoing
national pressures. The increasing demands on health and social care will lead to an increase in
costs, especially if we continue with the current balance of provision between care at home or in
the community and care in an expensive hospital setting. My Department has recognised this
challenge and has developed a strategy, approved by Tynwald Court last year, to change our
service delivery model over a five-year period so that more of our services are provided closer to
our customers’ homes. This model will have many benefits, among which should be an
improvement in the sustainability of the Health Service of the Island. Full implementation of this
strategy cannot not be a quick process, and some investment costs will be incurred whilst the
service delivery model is realigned.
The cost of commissioning care abroad is rising. The Island is not large enough to maintain all
medical specialities, and therefore needs to buy services from providers, mainly in England, and
refer patients to them. While UK tariffs for treatment have generally remained flat, the number
of referrals, and hence costs, including those associated with new, specialist treatments
prescribed by the specialist centres, has risen. The Mental Health Service was faced with
significantly increased expenditure in 2015-16 when commissioning specialist residential support
in the UK in a number of very complex cases – and, just to point out, some of these cases can
cost up to £250,000 per person. The service on the Island does not have the facilities to provide
such specialised care.
Our strategy to move care closer to our customers’ homes will of course ensure the need for
off-Island care is closely assessed, but we must recognise that we will always need to refer
patients for treatment to specialist centres. We must ensure that we get value for money for
these treatments that we buy in other places and that we are, wherever possible, providing care
here on the Island.
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In April 2014 my Department took responsibility for providing catering across all
Government-run services. So, for example, my Department provides the catering in schools, the
National Sports Centre and many other locations, and at Noble’s Hospital. In creating this shared
service, targets were set for savings that have not yet been achieved. This is because it has taken
time to bring a number of catering teams and operations together under one management
structure. To deliver savings in this financial year we will be undertaking a series of procurement
exercises and will focus on obtaining better value for money through the economies of scale
which centralised and standardised purchasing should deliver.
Madam President, I cannot stand in front of you today and say that by approving this motion
all of the financial challenges facing my Department will be resolved: they will not. I understand
the gravity of coming to you to request this level of additional funding. My Department
recognises the challenges it faces and is determined to meet them.
I beg to move the motion standing in my name.
The President: The Hon. Member of Council. Mr Coleman.
2710
Mr Coleman: Madam President, I beg to second and reserve my remarks.
The President: The Hon. Member, Mr Karran.
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Mr Karran: Eaghtyrane, I have to say that I am somewhat disappointed with the lack of
information as far as this Item is concerned. I have to say that I am also disappointed about the
issue of the nursing home beds, because obviously that would be a Treasury issue to start off
with.
I do feel that the lack of detail for the reason for the £9.9423 million of additional spend
needs to be more highlighted beforehand, because we are in this all together. One of reasons I
put the Question down before, as far as Question 8 this morning, was about we are going to
have to look at new ways of how deal with how we are going to provide the expectations and
afford to be able to keep to the way we have seen our Health Services grow.
But most people in this Court and most people outside the Health Services see this as the
greatest social advancement since the ability of working-class families to be able to have their
kids educated, so as far as Health and Social Care are concerned this is a cornerstone as far as
society and a benchmark as far as decency, so a supplementary vote generally should be a vital
issue and has to be addressed and has to be supported. I have to say that I do feel that, even
allowing for that benchmark of decency, I am disappointed that we have not got more
information before us on the issues of how we are going to address the issues and what are we
going to do as far as the Strategic Plan for the future.
Fortunately, Eaghtyrane, during our period and the Chief Minister’s period we have had the
last 30 years of being blessed as far as money coming in. We started from a very low expectation
as far as what the state has provided, and we can all take great pride in what is now provided,
when basically lots of these services were either provided by the vicar, or the MHK if he was
socialist minded. So the general public have better expectations, and, with this biggest economic
boom we have seen, it has saddened me and this is why I think these things need to be more
detailed.
Because of the bad governance, the not proper parliamentary process holding the executive
Government to account – and finding far too often everyone stuck together like mud to a
blanket in here, whether they are in Government or outside, and virtually everyone paid up as a
member of the executive – we are finding ourselves in difficult and fraught times. What we have
got to do is try and maintain those standards that we want for the future, what is acceptable to
our society as far as services to be done on a universal basis.
As far as I am concerned, the issue that needs to be addressed as part of this Item has to be
the fundamental bad management. I am not attacking all staff. I see some staff I have some very
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high regard for, who work within the Health Services. In fact, we know from previous
experiences how difficult it has become from the days when I was first on the Health Services,
having the absurdity that our management was not allowed on the Theatre Users’ Working
Group – so how could the management have any control over the priority list, as far as whether
private patients came first or second?
I think this debate, and obviously, the reflection on this Item here, has to be about the lack of
direction, the long-term strategic planning in a changing environment so that this Island can
maintain the sacred principles of Bevan that were brought about after the Second World War.
I believe that one of the things that needs to be done is not just nodding this through – and I
will be supporting this proposal – but we need to get some sort of independent management
system over the different interest groups and different systems. I mentioned before we had the
crazy situation where there were consultants, who had their own locum businesses, making a
fortune with conflicts of interest. And I have to be fair, Eaghtyrane, I am not sure whether they
still are being allowed to practise such disgraceful and wilful ways of haemorrhaging legitimate
money that should be going other ways.
What I would like the Minister to think about, if we are not to see this on a repeatedly yearon-year basis, as the Minister said … The next administration is not going to have the luxury,
because we have blown it, as far as that fiscal security is concerned. We need to get some sort of
administration committee with a broad electoral college so that we can actually help the staff
highlight the issues – and I am not criticising the Member for Health or the Minister; I believe
they have tried to do something – because if we are not to have a repeat of this next year, we
have got to get some pride back into the Hospital, because they are people we should be
respecting and we need to get that pride back into the Hospital. I think this would help the job of
the Minister by getting that pride back, because we should be respecting not just the consultant
but the cleaner and give him the pride that we have cut down on the viruses that have plagued
us for some ways. How we are going to have maybe some sort of matron system to try and help
get financial control back on a level playing field as far as that is concerned …
What concerns me at the moment is the fact that the present Health Services … With the
best will in the world of the Minister and his political colleagues, I do not feel that they have
managed to get a finger on the pulse of what a lot of very frustrated, hardworking, decent
workers, who are committed to the principles of the Health Service … to stop the wholesale
systematic waste that has been allowed to be turned into an art form when it comes to the
Health Services.
The President: Hon. Member, you are a little repetitive.
Mr Karran: Well, maybe if somebody takes on board these things, as somebody who is going
out of this House maybe I will not need to be … you will not have the repetitiveness in the
future.
What I am concerned about is the likes of the Mental Health Services – a great overspend.
But where is the control on the Mental Health Services? Have we got the audit? Are we seeing
millions of pounds being wasted … which I fear on some of the most vulnerable in our society,
because the needs of the people are coming secondary to the needs of the managers?
To be fair to the Minister, it is very pleasing to see, even as a leftie, as a person who fought
for employment law … but we have got to get away from the situation where … If management
is not doing the job, then they should not be getting promoted; they should be getting sacked.
We saw the scandal where we fought for a drugs unit years ago only to find it has been never
used, thrown out, a couple of million pounds. That is what I am trying to get over in this speech
today.
I think it is important that we have to address these issues, because what I want, as far as this
is concerned, is that yes, we need to look at other jurisdictions. I have mentioned about maybe
instead of us having resources on consultants trying to do a breadth of things, have an agency
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basis with centres of excellence in the United Kingdom and in Ireland, so that we get top
conditions. If you remember, Eaghtyrane, when I was Member for Health I had great criticism for
not bringing a cancer unit into the Island, but the point is that would have been a disservice to
the people of the Isle of Man who had cancer. What we need is specialist intervention, and what
I would like us to see, by supporting this proposal, is that we do keep to the agenda of
recognising the principles of the first UK Labour government after the Second World War – that
those standards have to be kept, that we cannot allow premature death because of the lack of
affordable decent healthcare intervention.
But we need to look more broadly at how we are going to make sure that we do not spend
that money and how we do not overspend that money – and we do not have to go halfway
around the world. We can look far closer at health services with a different criteria but which
have the same values, such as the French and the Dutch systems. We need to find a way. If we
are not going to see a repeat of this in much more difficult times in the next administration, then
we need to change that management structure, we need to get that political accountability and
management accountability. Otherwise, what we are going to see is an ever-increasing waste of
money, and in difficult times this will be used by the right wing to use the excuse to break away
from those sacred principles of a National Health Service. We cannot afford the luxury of not
having a National Health Service, as it is a complete failure to do so. And the same with the level
of Social Services, the level of decency.
I hope the Minister will actually come along and consider what we are saying. It is not
ranting. It is not the fact that you have got all the integrity or we have got all the integrity. We
know that the management and the way we provide the services has got to be changed, and if a
socialist government in France can maintain the standards and principles of Bevan, then we can
do it, and maybe we have got to look at different ways of doing it in order that we do not see an
overspend next year. I fail to see why a pound in the DHSC pocket, or in any of the Departments
of executive Government, should not be able to be spent at the same value as the pound that
we have.
I do hope that the Minister will take on board that it was not perfect when he came, it will
never be totally perfect for ever, but the point is we have to make those advances and we need
those advances as far as management, accountability and services that end up being a goldplated service at costs, when they are complete and utter tatt when you come to find some of
the most vulnerable people in our society because of the fact of the lack of advanced
management and accountancy service.
I do hope that the Minister will be looking at this, because the Minister who sits in his chair in
the next administration may not be able to have the £9.943 million, so let’s see that the Minister
maybe comes back with some ideas to look at the French system, to look at other ways, but do
not use the excuse of incompetence in the next administration to destroy the principles of
Bevan. That is what I am worried about. We cannot afford not to afford a Health Service and a
decent Social Services, but we must make sure that we bring about the changes that need to be
done – not an assault on the bottom, not an assault on the people who need this Department’s
care, but making sure that managers actually do the job they are paid for and consultants are
held to account for their job and the money that we spend on them on behalf of the taxpayer.
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The President: The Hon. Member, Mr Cannan.
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Mr Cannan: Perhaps we ought to bring a bit of balance back to the debate, having listened to
that last contribution. My contribution will be brief, but I think that when we look at this
significant overspend for the Isle of Man we still have to take that into context in terms of what
is happening across the NHS as a whole, because we here on the Isle of Man effectively follow all
the principles and guidance of the National Health Service across in the United Kingdom, a
decision that we, as a whole, make and continue to support.
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When you look at what is happening in general terms, many of you will recognise, of course,
that the overspends across the NHS now are running into billions of pounds and that the NHS
perhaps has itself been termed as in crisis. In fact, when you look at the NHS trusts, the hospitals
across the UK – I think there are something in the region of 138 hospital trusts – just seven of
those hospitals are actually still in surplus for the last finance year, and we are still waiting for
the full figures of that to be revealed. So I think that we can determine from that, Madam
President, that we are not alone in facing significant challenges.
Of course, a lot of those challenges have been brought about by staffing issues, and again it is
not just the Isle of Man that is facing significant staffing issues. If I can just quote some statistics
that have been brought to me courtesy of the BBC: 23,443 nursing vacancies in England, Wales
and Northern Ireland in 2016, a 9% vacancy rate for nurses; 6,207 doctor vacancies, a 7%
vacancy rate for doctors in each hospital. So we, here on the Island, are not living in a bubble.
We are facing a real problem within the NHS and particularly within the hospitals, and that has
been reflected in the Minister’s Statement today because clearly the Hospital overspend, which I
think he quoted at £10.7 million, is at the centre of the problem and we have got a long way to
go to determine the solutions to that. I do not have the solutions, I certainly did not hear the
Hon. Member for Onchan deliver any solutions, but I do think we need to hear, going forward,
(Interjection by Mr Karran) some direct proposals in terms of what type of action is being taken
to alleviate the overspend. For example, we have seen in the United Kingdom direct action in
terms of nursing agency fees – action to reduce the cost of agency nurses by reducing the type
of charging and costs of charging that can be made to these trusts. I would like to know perhaps
from the Minister, whilst he has indicated to us that we are going to be looking at the new
strategy going forward, what sort of direct actions are being taken in the next 12 months in
respect of the Hospital that will help try and keep the Hospital budget on track in particular.
Thank you, Madam President.
The President: The Lord Bishop.
The Lord Bishop: Thank you, Madam President.
It is obviously significant that the staffing problems are a major part of the reason for this
excess expenditure. I would like to ask the Minister whether he has read the several pieces of
academic and practical research from the United Kingdom, freely available, which conclude that
adequate chaplaincy improves staff morale and reduces absences among hospital staff. I have
been asking about this for eight years. It would cost the Department one two-hundredth of what
is being asked for today.
The President: The Hon. Member, Mr Thomas.
Mr Thomas: Thank you very much, Madam President. Three or four very brief questions.
The first one is I could not help but notice that the Minister seemed to say that shared
services had not quite delivered the savings that were accepted, so does that mean the
expected four-point-something million savings that have been indicated for some years have not
actually materialised, given we are being asked to approve an excess expenditure here? So,
shared services: does that mean the whole programme has not been quite as successful as first
assumed?
The second point is that in 2014-15, the first half of the year, there was a £4.7 million
overspend as well in Health, which came to light in the discussions arising from the financial
reporting system that Treasury no longer uses because it brought to people like myself’s
attention that there was an overspend halfway through the year. So I wondered whether, as in
2014-15 there was a similar overspend which was camouflaged by the savings in Social Care,
and in 2015-16 a £10 million overspend, we can have any confidence that this year’s budget is
not going to be overspent in the light of that.
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My third question is just, in one sense, to reiterate what I think Mr Karran, the Hon. Member
for Onchan, was suggesting, which was there was rather more detail in the Minister’s speech
than in the one-page briefing we had on the Order Paper, and perhaps it would have been
better to change the proportions of those round.
And fourthly, I cannot help but remark that at the time of the very helpful huge document
prepared, with appendices from consultants and all other sorts of people, when Mr Anderson’s
conduct was considered, there was actually a recommendation to the Public Accounts
Committee to look at many aspects of Health, and I wonder, given the obvious issues that there
have been with the Public Accounts Committee and the membership of it, whether the
Department has heard from the Public Accounts Committee about any sort of investigation
subsequent to these overspends in the last two financial years.
The President: The Hon. Member, Mrs Beecroft.
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Mrs Beecroft: Thank you, Madam President. I am going to be quite brief in my comments on
this one.
I am just wondering if the Minister can give us some information about the actual cost per
person that we are spending, as compared to other areas. I am wondering are we budgeting
correctly. Are budgeting that we are giving that Department sufficient in the first place, given
that it is always coming back? It just makes you wonder whether we are getting it right to start
with.
Health is the most important thing and has to be the most important thing for every person
on the Isle of Man. You can catch up with everything else – you can catch up with your
education, you can catch up financially, whatever; if you lose your health you are not always
able to catch up on that, so it has to be an absolute priority … and something for me in this
paper possibly saying why we are overspending, because we have not given it the priority within
the budgeting that it actually deserves.
I know the Minister … Well, let’s face it, he took on a basket case a couple of years ago and
he has made improvements to it. I know he has got a long way to go yet, but he is certainly
trying and I take my hat off to him for that, but obviously we cannot carry on budgeting for an
amount that we know is not going to be achievable, and I think that is where we need to look. I
am not saying that there are not further savings that can be made – I am sure we can all suggest
some, and I am not going to list them all today – but I think, as a broad principle, we need to be
deciding what is a reasonable amount per person that should be going into this budget, how are
we comparing with other jurisdictions and with other areas similar to ours, and make allowances
for the fact that you have the additional cost of being on an Island.
Thank you.
The President: The Hon. Member, Mr Cretney.
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Mr Cretney: Thank you.
I have been in correspondence with the Department in relation to the Accident and
Emergency area of his Department, and I just wondered if the Minister would agree with me
that if progress were to be able to be made in terms of … and I know this is a situation which
exists elsewhere as well, where there are real pressures on the A&E areas, but if progress were
able to be made in that regard … and I think, looking at the next Item on the agenda, in terms of
beds available, for example, that would help him in the future in terms of his budgeting
difficulties.
The President: The Hon. Member of Council, Mr Coleman.
Mr Coleman: Thank you, Madam President.
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I stand because some of the things that have been said today are totally inaccurate, and
unfortunately they are mainly by my friend Mr Karran.
We are talking about perhaps mental health particularly, the overspend. The overspend was
caused by the fact that we had a suicide in Grianagh Court. We immediately suspended three
members of staff and we had to pay bank staff for something like six months.
Mr Karran: Why couldn’t you tell us that before the debate?
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Mr Coleman: Did you ask?
Additionally –
Mr Karran: We should not have to ask. (Interjections)
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Mr Henderson: Check it out first, then slam it.
A Member: Absolutely.
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The President: Hon. Members, Mr Coleman has the floor.
Mr Coleman: Thank you, Madam President. (Interjection by Mr Karran)
One of the other things that is unusual, certainly within Mental Health, is that, by definition,
some of the people can be unpredictable. At the moment we are spending £1.9 million a year
for 16 people who are away being treated in specialist units. In one case it is £4,000 a week for
an eating disorder. They are quite amazing figures, aren’t they? And sometimes we also have the
issue where – (Interjection by Mr Karran) Sorry, would you like to take over what I am saying? If
you would like to, please –
The President: Hon. Members, please!
Mr Coleman: I do not think I am –
Mr Karran: I am just saying, 20 years ago we were dealing with the same issues –
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The President: Hon. Members –
Mr Karran: – about eating disorders.
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Madam President: Let Mr Coleman have his say, please.
Mr Karran: It’s nothing new, mate. (Interjection by Mr Henderson)
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Mr Coleman: No, but I would explain what is new, if you can perhaps keep your feelings to
yourself just for a moment.
Other issues are, of course, that we have mental health issues in the Prison. A very high
percentage of prisoners actually could be defined as having mental disorders, and these
disorders very quickly go over the edge and become almost forensic, where they must be sent
away. And what happens there is, because it tends to be so demand driven, it is very difficult to
budget for, (A Member: Hear, hear.) and when they do occur there is a dialogue between Health
and Home Affairs as to who pays. What are we doing about that? We are putting together a
paper, using Home Affairs resources and Mental Health resources, to come to CoMin and say,
‘Look, these are demand driven, these should be from an emergency fund, and wherever the
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responsibility lies between the two Departments the budget should go with it.’ So it is not very
easy to budget for these people.
Going further, this Drug and Alcohol Unit that we do not have: on my operational report I
have got 400 people there as patients of that unit, so the Drug and Alcohol Team exists and the
current case load is 400.
Mr Karran: Eaghtyrane, would the Member give way?
Mr Coleman: Yes, I will give way. I’ve been giving way all the way through!
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Mr Karran: We were talking about a unit that we paid for – was it a 16 or 20-bed unit? – that
never opened. I think Mr Malarkey will remember that.
Mr Malarkey: That was well before my time, Mr Karran.
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Mr Coleman: I think the unit you are talking about is Reayrt Noa, where the – (Interjection by
Mr Karran) I think you will find it is. And the 400 people we are looking after we are looking after
there, in that unit, on an outpatient basis. That is Reayrt Noa. Okay?
So I think the point I am making is about changing things. We are bringing back more people
from tertiary referrals across, and to do that we have used elements of the Health Improvement
Fund to provide additional CAMHS resources. So we have brought back children and we look
after them ourselves in a wraparound service that we have brought in. We have now got Mental
Health in GPs’ surgeries around the Island, where referral can be done by the GP.
Sometimes it takes a long time for an oil tanker to turn, because of the weight and size of it,
and this is really an analogy to the Health Service: it is big, we have started turning it, but it is
going to take some time. There are examples right the way through the Health Service. I have
responsibility for catering, I gather, and there is a plan for that through the commissioning
person the Minister spoke about. Things are moving in all areas in Health and they are moving in
the right direction.
Thank you for your patience, Madam President.
The President: The Hon. Member, Mr Quirk.
Mr Quirk: Thank you, Madam President.
I will be short as well, but I want to echo the sentiments of my colleague, Mr Coleman, who is
in the Department with me, Mr Peake, and Mr Harmer the new Member – and a former
member too, from Kirk Michael, Mr Cannan, who was an excellent member of the Department
but was destined for better things. (Laughter) Sorry, mate!
Regarding the five-year strategy, we have only just endorsed that five-year strategy in this
particular place. That five-year strategy comes into being for early intervention for children, the
next generation coming forward. Older people too, making sure we give them facilities, making
sure we get them at an early stage. It also extends to education, giving them exercise, making
the communities come together.
I just wanted to give that feel to Members too regarding the demand-led services from the
hospital side. There is always going to be a demand. If you are ill you are going to need the best
that we can give you.
On the other side of the coin, I would like to echo some praise to the other side, the Social
Services Adult Services side, through that issue. People go out there to meet people, put people
to bed for the night and wake them up in the morning. (Interjection by Mr Karran) You forget
about all those little issues. And before you say anything else – it has always happened in the
past – it is a lot better than it used to be. The community need to look after themselves. We are
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also relying on a number of charities at the minute to do certain elements in the community,
and they are doing great work as well. We need to integrate together.
I would say to Hon. Members here today, the team you have got that is working under the
ministership of Mr Quayle is putting its finger on the pulse. Staff changes were made when we
moved in. Sometimes it has been a bit of a rough ride. The Minister said earlier today we have a
guy who is really ace at putting procurement together, making sure those services are put
together and giving us value for money, but it is very hard sometimes, as the Minister says, even
on our side in Adult Services, when you have an individual whose needs are sometimes
£¼ million a year. What do you say to that person: ‘We can’t do it’? We have to do it, but we
have to keep within the budget constraints which this Hon. Court gives to us and the Treasury
Minister extends to us.
So I would say to Hon. Members it is part of a bigger plan for the future. Even if we are not
here in the next House it has got to be done, because I feel as though I have come here … I am
certainly getting older all the time.
A Member: Long may that continue!
The President: The Hon. Member of Council, Mr Henderson.
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Mr Henderson: Gura mie eu, Eaghtyrane.
I would just like to make a few observations on proceedings thus far. First off, I would like to
say when I was working in mental health in 1981-98 – I would presume that that would be the
time that the Hon. Member for Onchan tells us he was on the Department of Health, at some
point during that period – I can say that during that period it was one of the most stressful,
depressing times for staff working at certainly Ballamona Hospital, because of the lack of funding
and the lack of priority at times that we received as opposed to other services, even to the point
of watching paint peeling off ward walls and so on, and carpets that were obviously outdated by
about 50 years. The actual quality of service offered to the clients and patients there, however,
was second to none because the staff braved through it and the medical staff.
I would urge Hon. Members to take with a pinch of salt some of the comments that are made
with regard to mental health. It is true that in the past it was second best or third best, it did not
receive the priority it should have done and it was hidden away quite often. People did not want
to talk about it. It did not get the political respect it should have done, in my opinion, and now,
when the staff are fighting even harder to get that recognition, and the current senior
management team at Health and so on, where its priority is being raised a lot more than it was,
there is a cost involved.
It is no use jumping up here, berating management and the … although I could be accused of
being hypocritical there in some of my past inputs. However, there is no point berating bad
management when in fact the management are doing what they should be doing, which is
highlighting the point that mental health needs funding and more funding than it has probably in
the past, and it needs a greater public awareness. All these things are being brought to fruition,
as the Hon. Member of Council, Mr Coleman, says, and with it comes a cost.
It might not be a case of bad management; it might be a case of a reality check that perhaps
we ought to have been spending a bit more and raising the budgets over the years when they
should have been raised – and then we might not have quite found ourselves in such a
confrontational situation now. Nonetheless, the standards are being raised and I think we
should be pleased about that and proud of the work that has been put in, (Mr Corkish and
another Member: Hear, hear.) and give those people the credit that they deserve for it.
And the Hon. Member for Onchan deserts us in the middle of the commentary. (Interjection
by Mr Karran) Good. I look forward to it.
In the bigger picture, the Hon. Member for South Douglas, Mrs Beecroft, hit on what could be
one of the two or three pillars of this argument, which is the budgeting issue and cost and what
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does it cost elsewhere. I think it is on record from the Department that what we spend per head
of population here, as opposed to other jurisdictions, falls far short – and I think there lies the
nub of the problem.
Another issue, which I have highlighted again and again in here, is the fact that if the
community – and rightly – expect the range and diversity of services that they expect, the
specialisms that people want and the Hon. Member for Onchan, Mr Karran refers to, then that
comes with a cost. If we expect the services to be operating at the standards that we measure
with other areas of excellence throughout the UK and Europe, and we have the increasing
assessment teams over here looking at our standards and our resources to areas and taking
these measurements and giving us the recommendations, that comes at a cost too.
So it might not be all down to bad management. I think we have got to look at the services
that we wish our community to have, at what standard we want them to be pitched at, and then
budgeted accordingly, or work towards a budget accordingly. And then we may also need to
look – and I know the Health Minister is doing this – at a general strategy on how we deliver
those services, or do we need to change a lot of the ways, with the periphery services and so on,
in which they are delivered and who is a partner in that approach to delivery. Because at the
minute it could be that it is becoming unsustainable in our desires and what it is that we want
the Health Service to do. I am sure the Health Minister is going to come back and give us a
round-up on the general issues anyway, but those are some points that Hon. Members need to
bear in mind.
Further to that, the Health Service – and, in particular, in the last couple of years, Noble’s
Hospital – has taken a particular battering through debate in the press, and it will put morale
down. What we should be trying to do is energise the morale to say, ‘We are all behind you: you
do what you do best.’ We have just seen that through TT, where the services coped admirably
with what has been going on. I did not hear any criticisms of that, so I know that it can be done. I
think we need to energise the staff and empower them as well. It is all very well to criticise, and
there may be some issues with financial management – I am not saying there are not; there may
be and I am sure they will be examined, as I know they are from what the Health Minister has
been telling us – but in the main I think we need to energise the Health Service as well,
Eaghtyrane.
The President: The Minister to reply.
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The Minister: Thank you, Madam President, and I thank all the Hon. Members for taking part
in the debate.
If I first address some of the Hon. Member for Onchan’s concerns – Mr Karran – he did not
think we had given enough information. I gave an eight-page speech. We declared months ago
that we were overspent. The Department of Health and Social Care Noble’s area, the acute
Hospital, has been overspent for 15 years, but previously there had been savings in other areas
of the Department. Given the whole of the Island’s financial situation, those savings have been
taken off the Department, historic underspends, and you get the real bare bones of where this
Department is now.
If we look at catering services, for example, the cost for each of the Departments’ catering
services were put into our Department, but a savings amount to be achieved was taken off that
figure and then transferred into it, and unfortunately, because we did not hit those targets –
because we needed to set up an entirely new structure of bringing it all together – we were
already starting from a deficit because we were unable to implement the savings. But we have
put plans in place. We are going out for a review of services and staffing in our catering services.
There will be price increases for some of our services and we will be doing a formal procurement
exercise for the foodstuffs, and we hope to be able to make savings there.
What are we doing to address the costs at Noble’s Hospital? Well, we have got a cost
improvement plan, we have got an ongoing review of hospital services, we have got a
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recruitment of nurses cohort. In 2013 there were seven nurses being trained. There was an
overspend of approximately £5 million on locum and agency fees. It takes three years, Hon.
Members, for a nurse to be trained – it is three-year degree course – so we are now doing the
maximum number of nurse training that we can, and that is six mental health nurses and 14
general nurses, and they will be coming on line but it takes three years for those changes to
come to fruition. Therefore, at the moment, we are having to pay agency fees for staff to come
over. We are attracting staff, I am glad to say. I think we have got an additional 19 nurses
coming over from the UK, but we will then have to pay their relocation expenses.
So we have put plans in place, Hon. Members. The five-year strategy accepted that the health
and social care policy of this Isle of Man was totally unaffordable now and for the next
generation, so it is not new. We have put a plan in place, which we have debated in this Hon.
Court – I am very appreciative that this Hon. Court supported it. We are working to make sure
that we have the problem under control.
If I can just give you an example of growth in the problems, if we look at bed blocking in
Noble’s Hospital – and that is people maybe waiting to go into a nursing home – in 2013-14 the
grand total was 812 patient bed nights, in 2014-15 it was 870, in 2015-16 it was 3,126. That
should give you some sort of explanation of the increase, at nearly £300 a night costs alone,
where we are coming from – and rising. I do not want to take too much away from the next
debate, but that is just one of the issues.
We have a drug increase every year. We spend £20 million a year on drugs on the Isle of
Man – that is hospital and GP-prescribed drugs, I hasten to add – and the average inflationary
increase there is 5% to 7%, which is well above the Department’s budget.
But there are savings to be made, even though the Hon. Member of Council, Mr Henderson,
did point out that yes, we might not have the same spend that our UK counterpart has, but
there are still savings to be made. We can make improved efficiencies.
I thank the Hon. Member for Michael, Mr Cannan, for pointing out that in the adjacent isle
they are £2.4 billion overspent, so whilst I do not doubt and I do not want to belittle the
£9.9 million that we are asking for, we are not in a unique situation here. The increased demand,
the costs … As the Hon. Member of Council, Mr Coleman, has pointed out, with costs of £4,000
or £5,000 a week for a person to be off Island it only takes, I think, about nine extra referrals in a
year and that is the Mental Health budget overspend already explained – just nine cases when
you think of the hundreds and thousands of cases that they are dealing. As I say, we had an
exceptional year where we had a problem with the way someone had been treated in our
mental health facility: we took instant action, they were dismissed, but with all the rules and
regulations you are paying for new staff to come in and cover those vacancies whilst there is an
investigation, so you are paying locum fees and you are paying the existing salaries of the people
suspended, so a small instance is big money. I think the Mental Health Service had done a
fantastic job. There are lots of new changes and I think … I am disappointed with the Hon.
Member for Onchan saying he has not heard of what is happening. I have given numerous
speeches about what we are doing: early intervention – we are bringing people from the UK
back to the Isle of Man now; we are giving a 24/7 service for young people, and whilst that is an
additional cost we are able to reduce our costs of the off-Island referral. So there is an awful lot
happening in the Department, Madam President.
I appreciate the input from the Bishop. He has a historic item with me – and, I know, previous
Ministers – on the chaplaincy provision and the fact that we do not spend enough, and I will
happily look at his figures again. But the Bishop is after me for money; my good colleague and
friend, Mrs Beecroft, has hit me numerous times for 24/7 thrombolysis care and I am looking at
£½ million minimum to provide that; and all Hon. Members are after me to improve the
Accident and Emergency service. The waiting times there again are related, one could argue, to
the bed blocking, because if you have got effectively two wards full of people waiting to go into
a nursing home, you cannot then discharge people from A&E into a ward because you are having
to move beds around and that causes a significant amount of delay in moving people out, but
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equally we do need to put some extra staff in there to help with that facility because there is an
increased demand – and obviously Mr Cretney, Hon. Member of Council, raised that concern
too.
I thank Mr Quirk for his comments, and touching on the five-year plan, the five-year plan will
help plateau our costs, but health and social care is not something like a light switch that you fix
overnight. It takes years of building up foundations. You do not see foundations but they are
being worked on, Hon. Members, and I feel that we are getting there.
Mr Thomas said shared services were not working on the £4 million savings. All that had
happened was that the savings had already been taken before we started, and now that we
have got the management structure together on the catering side of things we look to make
those savings going forward.
What is stopping next year’s budget from being as bad? A fair point, and hopefully the items I
have just read out where we are making change will significantly reduce this. And having shown
you the increase from 812 to 3,126 just in two years, if we move on to the next Item shortly,
hopefully that will help reduce our costs even further – and quite a significant saving to be made
there.
I hope I have not missed anyone. I take exceedingly seriously an overspend. We had an
underspend last year – of a minutiae amount, I admit, Madam President, but we did have some
savings in other divisions which have disappeared now and are no longer available to us, and as
a result of that I suppose you see, maybe for the first time, what the true costs of health and
social care are.
I beg to move. Thank you.
The President: The motion before the Court is set out at Item 6, Hon. Members. Those in
favour, please say aye; against, no. The ayes have it. The ayes have it.
A division was called for and electronic voting resulted as follows:
In the Keys – Ayes 23, Noes 0
FOR
Mrs Beecroft
Mr Bell
Mr Boot
Mr Cannan
Mr Cregeen
Mr Gawne
Mr Hall
Mr Harmer
Mr Joughin
Mr Karran
Mr Malarkey
Mr Peake
Mr Quayle
Mr Quirk
Mr Robertshaw
Mr Ronan
Mr Shimmin
Mr Singer
Mr Skelly
Mr Teare
The Speaker
Mr Thomas
Mr Watterson
AGAINST
None
The Speaker: Madam President, in the Keys 23 for, none against.
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In the Council – Ayes 9, Noes 0
FOR
Mr Anderson
Mr Coleman
Mr Corkish
Mr Cretney
Mr Crookall
Mr Henderson
The Lord Bishop
Mr Turner
Mr Wild
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AGAINST
None
The President: In the Council, 9 votes for, none against. The motion therefore carries, Hon.
Members.
7. Salisbury Street Care Home –
Purchase by DHSC –
Expenditure approved
The Minister for Health and Social Care to move:
That Tynwald authorises the Treasury to provide a sum not exceeding £8,100,000 as a capital
vote to fund the purchase by the Department of Health and Social Care of Salisbury Street
Care Home.
The President: Item 7. I call on the Minister for Health and Social Care.
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The Minister for Health and Social Care (Mr Quayle): Thank you, Madam President, and I
thank Hon. Members of the Court for the previous vote.
The funding of care for a growing elderly population and how best to divide costs between
the public purse and private contributions is a problem across Western Europe. Whilst there are
clearly a number of important policies related to the future funding model for care that need the
consideration of this Hon. Court, the shortfall in financial support for nursing care
accommodation is a current and critical issue.
Nursing home care, which is provided only by private sector operators on the Isle of Man, is
currently funded through a combination of Social Security benefits – in particular, Income
Support for those who are eligible – and self-funding by those who have sufficient income and
releasable assets to meet their fees without state support. Around half of nursing home
residents are state funded and the other half pay for their own care.
Private nursing homes are able to charge what the market will bear and it is a matter of
highest concern that since May 2015 there has been no nursing home on the Isle of Man
offering beds at a rate fully covered by the maximum Social Security benefit which a person can
be awarded, an amount just under £820 per week. The average cost per week of nursing care
provision in the sector is up to £950 per week, and often more.
There has been a suggestion that by raising the benefit level by £100 per week this would be
less expensive than the proposal before you now. It certainly would not put additional capacity
in the market and it would also serve to increase the overall cost of care paid for by Government
by an additional £1.2 million a year – because you would not just increase it for the 20 beds that
someone had mentioned; you would have to increase it for just under 50% of the 490 people in
nursing home care, so you are looking at about 240 people who will be receiving support
towards their nursing home care.
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Over the next 20 years, the number of people on the Island aged 65 and over is projected to
grow from 17,000 to 26,500 – an increase of 55%. With our current model of care, up to
411 additional care beds will be required by 2036, the equivalent of one new care home every
18 months to two years for the next 20 years. An average-sized care home will provide between
55 and 60 beds, and that does not take into account, Hon. Members, the fact that if you analyse
the current stock, probably 10 or 11 of the current stock will need major investment or
replacement.
My Department, in conjunction with Treasury, has considered the most effective way to
begin to resolve this situation. Currently, there are no nursing home beds available at benefit
rates in the system and not enough generally to provide for those in hospital and in residential
accommodation requiring nursing home care. The existing provision for care on our Island is
logjammed, and this has a number of knock-on effects for individuals and their families who
desperately need to access care. This affects all of us, from those who need nursing care to
those in residential care, for people who require respite care allowing them to continue to look
after their loved ones at home and for those people currently located in Noble’s Hospital who
need to be discharged to more suitable care accommodation. And let us not forget the clinical
and care staff stretched to provide suitable care for people of this Island.
As a Government, we have not provided nursing care directly through the provision of a
nursing care facility since 2003, hoping that the private sector would grow to meet demand. But
we need to be honest and recognise that need is quite clearly outstripping capacity at this time
and we need to do something that will provide a viable solution urgently – and we can do this
through the proposal before you now for consideration.
There is a new privately funded care home which is due for completion next month. This is
the home being built by Salisbury Care Ltd and is located at Salisbury Street in Douglas. Purchase
of this home will provide the Island with a range of options to ensure that care is available to
those who need it without damaging the existing nursing home care market and without
expanding Government services.
Significant work has been undertaken to establish the value of the property as a fully
equipped and operational care home, including valuation by an off-island specialist, who has
valued it at more than we are paying for it. I know there has been much debate, both formally
and through social media, on whether the cost of the facility represents value for money. Let me
reassure the Hon. Court that, as part of the overall valuation process, comparisons were made
with appropriate sale prices of facilities across the United Kingdom and we have been advised
that the purchase does represent good value for money and provides the Government with an
asset that will retain its value over time.
It is my Department’s intention, with the support of this Court, to purchase this home as a
Government asset for a total not exceeding £8.1 million. However, I am cautiously optimistic,
Hon. Members, that the real cost of this facility will be £7.9 million, which is the price that has
been agreed with the caveat that Government completes the purchase within a timely manner.
The additional £200,000 is there to ensure that there is incentive for us to do so – and that is
something which I think is a reasonable business agreement.
If you agree with the proposal today, the Department will immediately start an open
procurement process to identify an operator for the facility on the basis that two-thirds of the
68 beds are available at a cost accessible to those reliant on support from Social Security. Should
this process fail to identify a suitable provider, my Department will seek to establish an arm’slength provider, separate to but wholly owned by Government, to deliver the service as a last
resort.
This measure will help to meet the Government aim of protecting the vulnerable on the Isle
of Man. It will also address some immediate issues of concern, including delayed discharges
from Noble’s Hospital, reducing risk in the community for older people, and lack of move-on and
respite facilities in the residential care sector, which leads to increased risk for individuals who
need a higher level of care.
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I know this is not an easy option and it will be difficult and challenging on many levels to
deliver the right outcomes, not only because of the sensitivity of cost but because we know
there will be challenges in resourcing this facility when we have a care market that is stretched
to cover what we do now.
Hon. Members, life is not easy and we as an Island face considerable challenges going
forward, but I stand before you today with a proposal that, in my view, makes sense and one we
would be foolish to reject. You all know I am keen to see evidence to support business cases,
and the reality of this one is that it will take us a minimum of three years to build a new facility
at Glenside – that is getting planning permission, probably a year, and then two years to build it
– and if we build it ourselves the cost estimate is in the region of £10.4 million.
We have, on average, over 30 people alone waiting in Noble’s Hospital for suitable care
accommodation at any one time, and this peaked this winter at 38 people, which is certainly not
good for them or their families, or us as an organisation dedicated to providing quality care. This
is currently costing us £2,000 per week. If we realistically do the maths on this we are paying
£3,120,000 per year to maintain the status quo with 30 people in Noble’s, all year round, who
need to be in a nursing home. Over the next three years we will have paid £9.36 million for the
status quo, which is £1.5 million more than buying this facility. This is just not an option we can
sustain or ignore.
Madam President, I beg to move that the purchase of Salisbury Street Care Home at a cost
not exceeding £8.1 million be approved.
The President: The Hon. Member, Mr Quirk.
Mr Quirk: Thank you, Madam President.
I beg to second and reserve my remarks.
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The President: The Hon. Member, Mr Cregeen.
Mr Cregeen: Thank you, Madam President.
Firstly, can I ask the Minister to confirm that no commitment for any finances has been given
already, so there has been no deposit put down on this property or any commitment to
purchase?
I know that he has mentioned that there is going to be an issue regarding the staffing of this
premises. Has he got a ballpark figure of what he considers the annual salary scales will be –
salary for the premises – and also if he has got Treasury approval for any funding, if there is a
shortfall between the occupancy level and his staffing costs?
Also, will he give a figure for what it is actually costing per night for each person to be kept in
Noble’s Hospital instead of in a nursing home, and give a commitment that in the future – he is
saying there are 30-odd beds that are being taken up at Noble’s Hospital by people who should
be in nursing care – these are not going to be backfilled by another 30-odd people, because then
I do not think he will be making the saving that he is hoping to make.
I understand that they are looking for possibly another nursing home to be brought online
every two to three years for the next decade or so. Is the private sector then, in the future, going
to be in dialogue with the Department, or is he going to be in dialogue with the private sector, to
ensure that need is met and we are not going to be put in a situation where the Department in
the future is going to have to provide that provision because they have gone in and unbalanced
the private sector?
If he can give me some clarification on those points, please.
The President: The Hon. Member for Onchan, Mr Karran.
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Mr Karran: Eaghtyrane, I fully understand the problems that the Minister has on the subject
of ageing population on this Island. It is a subject that has been dear to my heart for a long time.
Yes, that is something that we totally agree with.
This could be a way of dealing with the issue, but it just looks to me, again, as if we have got
some sort of moonshine salesman who has got the CoMin put under a spell and the taxpayer will
have to cough up for their stupidity and lack of strategic long-term policy directive on this most
important issue.
I can remember – I think it is relevant to this, because the reason we are here today is
because of the mistakes they have made – in utter disgust, when we still had a policy, maybe not
written, where we did not prosecute Departments, and again the taxpayer will pay for the
stupidity of the strategic long-term policy directive. I can remember the Department not
allowing the situation as far as the Reayrt ny Baie development. It was illegal before it even
opened its door, but that did not matter because the Minister at the time said it was acceptable.
If there had been any residential home that should have been knocked down, or closed down, it
should have been it instead of the one that it ended up being with the likes of Glenside,
particularly when you allow for the number of geriatric beds which were provided on the lower
ground floors of Glenside that could have addressed the issue of the 40-bed blockers at the
Hospital. I have written to the Public Accounts Committee about the whole Glenside affair, but
there seems to be no interest; and anyway, I suppose at least with the debate the other week it
has shown it is almost like being savaged by a dead sheep – maybe quoting famously the
description of a former Chancellor.
What I think Hon. Members need to realise is – like I said with the previous debate, where we
ended up spending £1.1 million in 2005, and in 2010 I am still complaining about the fact that
the facility had not been opened and operated – this is not an issue about you personally; this is
an issue about bringing about proper long-term strategic planning. But if we refuse …
I am fully aware of what the problems were with the Prison Service, as far as mental health
was concerned. We were concerned in the 1990s about the issues of prisoners becoming
addicted to prescribed drugs and we did bring in the issues about the first twilight nursing
service, so I need no lectures from the Hon. Member. What I am raising on these issues, like this
issue and the previous issue, are things that members of your own staff cannot say to the
Department Members – and one day we will be able to do that.
If we are going to learn from these mistakes we have got to stop repeating them, and
attacking and misrepresenting what people are saying in this Court does nothing to stop that
situation from continuing.
Today, here we have the issue of £8.1 million being requested from the taxpayer for the
purchase of Salisbury Street Care Home. The first question I have to ask is why aren’t we just
trying to get the owners to lease the property to another operator in order to help solve the
issue. Why is Government …? Maybe under the Government value system it sounds like good
value for money, the £8.1 million, but in the real world I am led to believe that this is a couple of
million heavy from what it should be. Not the Hon. Member for Onchan, Eaghtyrane. Like the
previous … people talk to me and they trust me. This is people from the industry saying to me
that this is a very expensive purchase as far as value for money for the taxpayer.
What is even worse is not just the access to the money and how we are going to develop a
strategic policy to try and create the environment to get people to invest in the long-term-care
industry … We will never get that sorted out if we have a situation of an in-out approach, where
we have different standards for accountancy, where we have different standards for inspection
between the criteria if the homes are owned by us or owned by the private sector. And that is
not the Hon. Member for Onchan speaking; that is actually people in the industry who bitterly
complain about the inconsistency in approach. And remember, I brought the piece of legislation
in for the 1988 Act.
So the situation has to be that we have to start looking not from a panicked knee-jerk
reaction. We will not sort out the problem of the bed blockers by trying to rewrite history … that
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we made a fundamental mistake in closing down Glenside and brushing it all under the carpet,
as usual. What we have got to try and do is develop a strategy that will work so that we can get
people to actually say how things work. I think today the reason we are here is because of the
issue of Glenside, and this idea that we can allow the mud-to-the-blanket routine … that the
absurdity of knocking down Glenside is the reason we are staring this issue in the face today.
And we are not addressing where those corporate decisions, those ministerial decisions, were
made, how they were made and how we are going to make sure we do not repeat that fiasco –
like the drugs centre that never opened, that cost us £1.1 million in 2006 and was still not open
in 2010, and, I am led to believe, never actually opened how it was designed because it was not
to the convenience of the management at the time.
I raise these issues because they need to be raised. We need to be working out, firstly, like
we did many years ago … Maybe the answer has to be like a grant and loan system, like we did
with the hotel industry. We have got a number of sites on the Island that are vacant and owned
by Government, that could be part of that grant scheme. We are into a different fiscal
environment. The idea of being able to buy things on the hoof and not have any good planning is
not the way forward.
If we are going to make a difference in the future, we have got to create the environment
where people will see a long-term investment opportunity in nursing and residential homes
provision and will break the cartel we have at the present time.
We have the problems at the present time … and I understand the ignorance of not
understanding these things by the new Members and the bushy-eyed and bushy-tailed ideas of
having to defend the indefensible, but some of us have been here for 30 years. We have to allow
for the fact, when we talk about developing strategy, of the crazy situation that where it is the
private sector all the capital costs are taken into account as far as the charging structures, but in
the state system they did not have to worry about the capital costs. Admittedly, we have
improved that in recent years, but it is still part of the Mickey Mouse economics that have been
allowed to last for the last 20 years in this Chamber. You have got to come up with a strategic
policy. You are going to have to start developing. If we are to protect the sacred vows of the
welfare state of a care system, we are going to have to look at new ways forward.
I do not want to attack the Minister, because I believe the Minister wants to do the best thing
he can, but you do not help yourself outside this Chamber when you tell us it is going to cost us
£3 million more and something like a 40% mark-up, and we own the land, if we were to build it,
to boot, and it is still 40% more than the private sector. Either we have complete and utter
incompetence in our capital way of us developing capital projects that most people now
recognise, or there is something fundamentally corrupt in the systems of government that allow
a situation where a piece of land that we own … and we still spend 40% more to provide the
same building.
So I think you need clarity on that point, Eaghtyrane. Questions need to be asked. You are
going into difficult times and I believe that Government cannot afford the La-La economics that
we have seen with the Brown and Bell administrations, and supporting this as it is at the present
time is not the way to break the way things are going.
I hope Hon. Members will have the good sense to reject this proposal. I understand all the
cries of crisis, all the cries of we have got to do something now. Well, I am sick of being in this
Court with this crony capitalism, where we end up with a situation where the taxpayer ends up
being fiscally robbed. What the Department needs to do, in my opinion, is develop the
environment to get the capital investment into the services in order that we have a level playing
field, fair accessibility and fair value for money for the people, instead of what we seem to end
up with time and time again: the ‘fiefdomism’ that seems to be allowed to flourish for the few at
the expense of the many.
Yes, I know we have a job, and actually trying to get control of this thing, as far as the
Minister is concerned, is not going to help but we have to get away from the situation where we
have, because of stupidity, because of lack of parliamentary process, we were allowed to knock
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down Glenside. My good friend in Council, Mr Henderson, who was worried about me having to
dig out the Hansard, leaving the Chamber, to prove that I am actually talking fact and others are
talking fiction in here about the … I have forgotten the name of the wing that was down there
that I used to visit on a regular basis for geriatric hospital beds, (A Member: Victoria Lodge.)
which was perfectly all right to be used for such a purpose for more high-dependency people.
Hon. Members, the easy way forward is to vote this through. I am a leftie around here, but
the fact is the easy way forward is to vote this through. We have ended up with another
engineered crisis and the taxpayer is staring us in the face. I understand there are 40 beds that
are being blocked in the Hospital. It broke my heart when I was down there having to see the
staff tied up with one particularly demented individual who should not have been in that
particular ward and how much time it takes. But I think you need to be looking at the issue of
why are we buying this property. Why are we not saying to these people, with the shortage of
finance we have got … The implications as far as revenue costs are put from capital costs. Why
are we actually purchasing this building? Why didn’t we encourage the owners to go and find an
operator to run this home and actually create that environment?
As members of the legislature … and many members of this legislature do not realise, and
most people outside do not realise there is a difference between Government and being a
member of a legislature. The problem has been, for far too long, there is no money in doing
what I do, and that has been the problem. But we create the environment, we put audit onto
Government, and what I believe you have got to get away from is the toxicity you have got at
the moment of the fact that by going down this road you will not help the situation to try and
get the private sector to actually run these homes. We have a public sector deficit. We have
recognised that there were other agendas, as far as Glenside was concerned, about the public
sector pension liabilities, but we cannot have this sort of schizophrenic situation where we are
supposed to be the champions of capitalism and then we fall back here.
I think you need to ask the fundamental question: why didn’t they leave the operator to find
an operator to run … [Inaudible] and why aren’t we trying to promote, in order to help the
dependency to be lessened by the public purse on the construction industry at the moment,
which soaks up our unemployment? Why aren’t we turning round and saying to developers that
we need to address the idea of some of these vital sites? We have got the prison site, we have
got the site at the old Park Road School – many of these sites could be addressed.
I am tired, Eaghtyrane, of seeing us engineered into a crisis and the situation ends up where
the taxpayer has to pick up the cost, and what happens is nothing is ever done about addressing
why we are in that mess.
I would like to know why the Minister is so silent, or is it the sacred rule: if you are part of the
club, no matter what you do, whatever you mess up will be covered up? I hope the Minister …
As in the previous debate, all I want is to help him to bring about the management changes that
will need to be happening in more austere times. With this, I believe if we support this we will
not actually be doing him or the people who come after him any service by supporting this
programme, because unless he comes up with some rabbit out of the hat, economically this is
not the right way forward.
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The President: The Hon. Member, Mrs Beecroft.
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Mrs Beecroft: Thank you, Madam President.
I do have a few queries on this. Unfortunately, I was not able to go to the presentation, and
the Minister has issued further explanations just recently but I still have some queries left.
Why didn’t Salisbury Care continue with the deal? There is obviously a gap in the market, or
they would not have commissioned this building to be built in the first place. If they are coming
out and leaving the developer in the lurch, then we should be getting it at a real knock-down
price, not at something that does appear to be … I am not an expert in the construction industry
at all, but it certainly appears to be well over what you would expect to pay. Even if the valuer
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has said that it is worth more than that, if a developer is left with a building because the
company which has asked him to develop that property has pulled out, then he would be
looking not to be making a profit on that, just to break even so that he did not suffer a loss.
When buildings are being done, you usually have a quantity surveyor and you get staged
payments, so I would like a bit more clarity on actually how this has come about.
Were we actually relying on this building being built and opened to solve some of the
problem of the lack of beds on the Island, because if there is such a shortage of beds there is a
gap in the market. I do not know why somebody would pull out and nobody else would be able
to take that place if there is this supposedly lucrative market and there is this huge demand for
the service. If we were not relying on that then I am afraid it is down to lack of planning, because
we keep getting told all the time about more people not wanting to be kept in hospital, they are
living longer, blah, blah, blah, and yet there has been no provision made: Glenside closed, ward
20 closed. Where was the fall-back plan, knowing all this was going to happen?
So it really does concern me, and particularly with the bed-blocking nights that the Minister
gave us: 800-odd, 800-odd, and then up to 3,000 in the last year. Is that because of ward 20? I
know he said that ward 20 is now used for the oncology department while new premises are
being built for that, but it did not have to be; it could have been made into a nursing ward to
free up the actual hospital beds until further accommodation could be found for those people.
There just does not seem to be any strategic planning gone into this: Glenside closed, nothing in
its place; ward 20 closed, nothing to take that capacity.
The Minister has gone on today about how much of the extra money that he has asked for,
for his Department, for his overspend, has come from having to use bank staff because we
cannot get sufficient medically qualified people – nurses and consultants, but particularly
nurses. I am delighted that he is training more on Island but there is a long way to go. Where
does he think he is going to get the people to actually staff another care home of this order? You
are going to need a lot of qualified people, and, if you are struggling to get enough for the
Hospital, where are they going to come from?
I have to say that the explanatory memorandum, on first reading it without the back-up
information that we have, rang alarm bells with me because it says:
The Department intends to seek expressions of interest for providers to run the home. If this is unsuccessful, as a
last resort the Department will seek to provide the services through an arm’s length operation.
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Why are we going to go into something when we are using terminology like ‘as a last resort’?
We do not need to do that. The developer will find another purchaser and somebody else will do
it, and those beds will get filled because there is the demand for it. I do not see that we have to
be doing things and making provision plans and saying ‘as a last resort we are going to do this if
this one fails’. It all seems a bit panicky to me. And I hate to say this, because I usually do try to
support the Minister because I know he does his best and he has not got an easy job, but I do
think he has got it wrong in this instance, and unless he can convince me otherwise in his
summing up I am afraid I will have to reject this motion.
The President: The Hon. Member for Peel, Mr Harmer.
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Mr Harmer: Thank you, Madam President.
Just a couple of points to support this motion – obviously, a Member of the Department. I
wanted to address a couple of issues that have come up.
One is mainly on the ‘why’ issue. In essence, the beds that we are talking about are
essentially Social Security beds. In a sense, at the moment, the market does not provide those
beds (Mr Cretney: Hear, hear.) and we are effectively bringing up supply. That is the essential
point. So, if we do not do this, or if somebody else takes over, there will be 68 beds but they will
not be Social Security beds. Without those Social Security beds freed, then what will happen is
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those beds will still be in there – we will have bed blocking within Noble’s. So this is about
supply. It is about actually improving the market.
The only other point I wanted to make was that there is a concept of saying this is knee-jerk.
Actually, nothing could be further from the truth, because certainly as I have joined the
Department, under excellent stewardship of Malcolm Crouch and the Minister, what is clear to
me is that a five-year plan has been developed. We are looking at lots and lots of different
issues: early intervention in Children Services; in the Hospital we are looking at certain issues to
do with efficiency – paperless and e-prescribing, all those kind of good things; in Mental Health
Services the Hon. Member of Council is looking at a whole load of step-up facilities, step-down
facilities, and all of the improvements that have been made there. We are working incredibly
hard, and some of the issues that we have talked about in terms of social care of the elderly we
are looking at, and, in terms of the Hospital, we are looking again at step-up, step-down facilities
in Ramsey and the south. The key thing here is that the budget … What is clear with the
supplementary vote is the fact that, in the past, the £9 million has been obscured by other
savings and it has always come under or within budget, but actually that £9 million overspend
has been there for a while in Noble’s and we have to address that. So, taking what the Member
for Onchan was saying – ‘Well, okay, we pass the supplementary vote, but then we do nothing
about it’ – does not solve the problem. So, what I am trying to say is that the Department and
the Members in the Department are working hard on a strategy, but this issue has come up to
actually solve a problem that has come up and we are dealing with it, and it is that kind of
reactive and responsive approach that we need as a Government, and that is why I will be
supporting this motion.
The President: The Hon. Member for Douglas West, Mr Thomas.
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Mr Thomas: Thank you, Madam President.
I come at this with an open mind and I will try and structure my remarks in terms of a series
of questions.
The first one is a bit stimulated by what the Hon. Member for Peel just said, which is that
obviously the proposals in the south and the north that were mentioned have been around for a
long time, but manuscripts do not burn and I took it upon myself to look into some of the
manuscripts in the past. The Hon. Minister himself, back in March 2012, stated:
… a replacement facility should have been planned for the Douglas and Braddan area, as sadly, senile dementia
and severe health problems mean that a Glenside-type facility will always be required?
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That is a matter of public record, so I am looking to the Minister to explain why things changed
so quickly between March 2012 and now, especially as in October 2014, when asked by the Hon.
Member, colleague from Council, Mr Henderson, about Glenside in particular and about
shortage of beds, the very clear answer the Minister gave to Mr Henderson – the man from
Treasury perhaps has looked at this … When he was asked about what the implications were of
Glenside, the Minister answered:
On 13th October there were 29 beds with private providers across the Island and the Department would need
their permission to disclose where those beds were.
The Department’s information clearly indicates that any delay in discharge from Noble’s Hospital is not as a result
of a shortage of beds.
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And so on. So things have changed very quickly and I look to the Minister to provide an
explanation in the context of that information I have just provided.
Another important aspect of the Minister’s case and the Treasury’s case and the case that is
being made for this is about value. I approached this with a completely open mind, just looking
for the evidence, and now I am going to present the evidence back to the Minister. I just ask him
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in his remarks, which will persuade me which way to vote on this, to explain the evidence that I
am about to give him in terms of my questions.
The first piece of evidence is that there has been – unusually perhaps in the Isle of Man,
because when I look back at the Office of Fair Trading investigations into this type of market in
2006-07 there is not a great market in the Isle of Man in residential and nursing care homes, but
there has actually been a transaction in Saddle Mews Nursing Home in 2014-15-16, depending
on whether the registration or the publication, or whatever it is of the deeds that counts. And a
home that once traded, apparently, for £3.5 million – Saddle Mews Nursing Home in 2005 –
traded recently at £440,000. That is all a matter of public record in the Deeds Registry. That
nursing home is not the most modern, it is 1988, but it does have 22 or 23 beds, some of which
are double – they are large beds. I do not know, I have not looked at it, but it was marketed at
much more than £440,000, so I wonder why the Department did not actually consider
purchasing that facility and renovating it.
Then I look across and I also look at some evidence that seems to be available from building
costs in the public domain. I think the site that this facility is on traded for about £900,000,
nearly £1 million. Across, in May 2016, there was a similar size facility available on the market
for more like £5 million to £5½ million in Bedfordshire, where the market seems to be much
more developed, and that seemed to be the value when the land is much more expensive. I
found another example where the price in the market seems to be approach £7 million or
£7.8 million, or something like that. And just to avoid any confusion, these are turnkey projects,
fully completed. This is not just construction cost; this is a turnkey project that is actually being
marketed in the public domain for us to take evidence from.
Of course, we have already been told that an international, properly professional valuer has
told us it is worth the money, but the crucial thing in Manx prices is always the premium that is
added in for it being on the Isle of Man. That valuation that says this is a fair value could have
said it would cost 30% less in the UK, but because it is the Isle of Man it is worth 30% more.
The only evidence I have got is the evidence from the procurement review that the Tolson
report did about housing and construction costs back in July 2013, their procurement view, and
the conclusion of that is whilst making comparisons is not straightforward, the report concludes
that the evidence collected suggests that there are significant opportunities for reducing costs
without impacting on the quality of service, and then it goes into various suggestions about how
that could be done.
Talking to a few quantity surveyors and chartered surveyors and the like, the £120,000 per
bed turnkey price does seem rather high for some comparable schemes that are going on for
comparable places. I have been sent so much information from Savills, public reports from all
sorts of people, which seems to suggest that. So a question to the Minister, then, is: in summary,
please explain why this is really value, given that evidence that has just been presented.
The third area of questions is about what impact this transaction might have on a number of
excellent processes that are going on in the Minister’s Department and in other parts of
Government. So, for instance, we are actually in the process of looking at how we go about
caring for older people in general and extra care facilities, and that is work in progress. We are
actually going on, trying to drive down the costs of construction projects, addressing the point
that the Hon. Member for Onchan made, which is that it is ridiculous to say just because
Government does it, it is £3 million more, which is what the Minister said a couple of days ago. It
got down to £2 million more in today’s presentation. I think we were told that if Government did
it on Glenside, for land that we already own already, it would be £10 million. It was £11 million a
few days ago. I have got £12 million here. As far as I can see, that is work in progress.
Before you can cost something, you have got to know exactly what it is you are trying to do. If
the private builders can build it in a year, why can’t we build it in a year? Why is it going to take
us three years? I was there in the Planning Committee when the Salisbury Street building went
through, and the Planning Committee worked very efficiently and passed it first time, as far as I
remember. (A Member: Correct.) I cannot see why it is imagined that it would take so long.
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Therefore, what I am saying is … It is suggested to me that it would take so long, but the fire
station that you are about to hear at the next Item went through in one Planning Committee,
and it was a very quick process once it finally got the green light from Treasury after a couple of
years of arguments in Treasury. We have to be realistic. It is no good saying Government is bad.
We have got to make Government better and I think this could be detrimental to some of the
processes that we have got going on in estates, in housing, in project management, in
procurement and the like.
That comes on to the point that the Hon. Member for South Douglas, Mrs Beecroft,
mentioned. I understand from Royal College of Nursing sources that we are 50 nurses short. I am
looking to the Minister to tell me how many staff are involved in running this type of facility, but
it has been estimated to me 50 or 60. I do not know, but could the Minister tell us how many
people we are talking about and how we are going to find those people to operate it; and, if we
do not find those people, how much it is going to cost us to have a building – turnkey, beautiful,
and everything like that – sitting empty because we have not … That difficult problem … The
Minister can solve all sorts of problems – he is assisted by some excellent departmental
Members; he will cope – but how much will it cost for every week, every month, every six
months that we do not manage to get involved with the actual operation of this facility because
we bit off more than we can chew and we have upset the providers who could have come in and
done a deal to operate it on our behalf?
Then, finally, as this significant capital transaction is not in the Pink Book, for some reason,
and it is not even hinted at, I just wanted to make sure from the Minister that he is absolutely
convinced that the financing can be obtained without using the bonds that we are going to
debate later on. It is hard for me to keep up with: one minute we are short of money, the next
minute we have got lots of money and we are going to put it into a fund to make more money –
the next minute we are short of money and we do not need the £50 million but we are
borrowing £50 million. It seems to me £8.1 million is a lot of money, even though it is now down
to £7.9 million because of good trading, and if we deal quickly we can have it probably … I do not
know, it all sounded … £7.9 million now, not really £8.1 million, but where does that money
come from? Is it dependent on the issuance of a bond? And if so, how long is the bond going to
take?
In conclusion, I think it is worth going back to the Office of Trading Report on Nursing Care
Homes 2007, because this is good news for the Minister. Back in 2007, the Office of Fair Trading
really looked into the cost per bed for nursing and residential homes, really studied it and came
up with pages of analysis about how to get good value and how to get the £60,000 that they
estimated each residential care bed should cost in 2007, and their recommendation was actually
more or less the way that we are doing it now, after some planning and after all the other work
that is going at the minute. So we will be ready for what they recommended in 2007 by about
2018, it seems to me.
At 7.7 the OFT recommends:
The OFT recommends that the DHSS urgently reviews its policy of funding nursing home care through the
payment of benefits. Options identified in this report and the 2006 Report include the direct purchasing of beds
from operators and the provision of a Department owned nursing home, with this latter option being
recommended solely on the basis that the home is not operated by the Department … Whatever policy direction
is selected, the DHSS should determine and publish a method for calculating the amount that it is willing to pay for
private sector nursing care that addresses the needs of the individual, the needs of the operators and the
resources of the Department.
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So we have finally got there but we have not got the underpinning in place, and this seems to
me to be an excessive price, unless the Minister comes back with very good answers.
The President: The Hon. Member for Douglas South, Mr Malarkey.
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Mr Malarkey: Thank you, Madam President.
I was not really going to talk to the debate today; I thought we had a very good presentation
last week. What I will add to the debate is a constituent of mine, on the Thursday before the
bank holiday weekend at the beginning of May, rang me quite distressed. This lady, in her 80s, a
very independent lady living on her own in a bungalow, suddenly could not cope. Due to family
situations, the family could not help her either because they had other health problems going on
at the time. She contacted her doctor: her doctor said, ‘You need respite, you are not coping,
you cannot be left on your own.’ So the family then immediately started ringing just about every
home on the Island. Personally, I thought they were exaggerating when they contacted me on
the Saturday morning. She contacted me in distress and said, ‘Bill, is there anything you can do,
because I cannot cope anymore. I need respite. I am happy to pay for it.’ The lady has got the
money, she wanted to pay for it – the issue was there was not a bed available for her in any
private nursing home on the Island that the family contacted.
So I busily that morning started ringing round all the nursing homes I know on the Island,
saying I needed respite for this constituent of mine, a dear friend who would not be complaining
unless it really was serious. I visited her. I spotted the fact that she was not capable of getting
out of the chair, she had got so weak. She needed help. I ended up having to get in touch with
Mr Quirk. Mr Quirk then got a Social Services social worker in touch with me. I managed, by late
afternoon, to get a social worker out and this lady got the only emergency bed on the Island. It
was a bank holiday weekend. On Tuesday, after the bank holiday, after having respite and a lot
of hard work, they finally found somewhere for her to go, and to this day she is still in that home
and she is paying privately. I do not think Members realise in here just what a critical state we
are at in having nursing accommodation for our elderly.
Madam President, I was in charge of Social Services in 2009-10 when we lost all of that
financial money going forward, and at that time Social Care had to find big budget costs. I will
stand here and say in 2010 Glenside was only half full. We had room in Peel, we had room down
at Southlands, we had room in various places around the Island. When we added up how many
people we had in Glenside and how many empty beds there were round the Island at the time,
there was enough to fill the beds round the Island without using Glenside. Glenside was one of
the oldest homes on the Island. Very few of them had en-suite facilities. It was in a very poor
state of repair, the building was very old and needed replacing, so the decision was made at the
time, because we were in great financial hardship because we had lost £170 million at the stroke
of a pen, that Glenside had to go. But it was a prime site for redevelopment.
The decision was made by Social Services that stay at home was the answer going forward, so
more and more people were encouraged to stay at home. We had more private businesses
coming out helping people to stay at home, and that was the way forward. But another seven
years have elapsed since then, and some of these people who are staying at home now or have
stayed at home for the last seven years have now got to the stage where they can no longer stay
at home, (A Member: Hear, hear.) so we need now to look at facilities.
I am quite amazed at how long it has taken for Glenside to be closed and pulled down – and
why it has not been redeveloped, I must say, at this stage … (Mrs Beecroft: Hear, hear.) I was
always in favour of it being pulled down because it was not really in very good condition. But
now we find ourselves in a position where we have colossal bed blocking at the Hospital. We
have not got any spare beds whatsoever on the Island for our elderly if they need it in a hurry –
and I have proof of that – so I do not honestly think we have any option moving forward than to
support this today, because we need this unit open. We need it open before Christmas, before
we go into another winter of more bed blocking, more elderly people needing to go into care,
and we responsible politicians here should be able to supply that by supplying this home moving
forward. I do not think we have any options today. It is a need and it is an emergency.
I would urge Members today to support this, because I can tell you first hand there are no
spare beds available and there will be a lot less come this winter when the elderly living at home
do not cope going forward.
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Thank you, Madam President.
The President: The Hon. Member, Mr Quirk.
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Mr Quirk: Thank you, Madam President.
I just want to echo the sentiments that my friend and colleague, Mr Malarkey, has just said. I
would ask any Member … and I was one of the ones who did not want Glenside knocked down
at all. I was standing there with other individuals saying it should stand. There was a different
Minister at the time, and I remember saying, ‘No, this is not going to happen.’
We do have the likes of Reayrt ny Baie and we also have Cummal Mooar in Ramsey, and I
would encourage any Member who has not visited those facilities, the ones that are still in
existence … and look at some of the homes we have got round the Island. If you want your loved
ones to go to … Most of them are Victorian houses, most of them need a real upgrade, and I
would not want to put some of my friends, colleagues or relations into those particular homes
for the last four or five years of their lives. And that is where they go when they get to that point
in time where people cannot cope, like Mr Malarkey said – it is a dramatic situation.
I would say to Hon. Members here today that the Members and the Minister, and Treasury,
we looked out of the box. There was an opportunity, and do not degrade that opportunity which
we have taken. We want to take that opportunity. It definitely will fill a need, and when my good
friend from West Douglas, Mr Thomas, says it is a large facility with a lot of beds, you can phase
it in. There is recruitment happening now. There are individuals who want to train in adult
services. We want to bring that generation forward. Instead of being nurses … They do not all
want to be nurses; some of them want to be in social care, to go outside and go to people’s
homes. We have got to do all these things for the future.
Do not kick this out at all, Members. It is no ego trip for the Department. We need to satisfy a
need, and, Hon. Members here today, we will still have Glenside. Glenside is still in our pocket.
As the Minister has indicated, we will have to start looking at them but we cannot build them
within a year or seven days. That need is going to be coming just before Christmas and we have
got to have that need for the people we care about on this Island.
Support the motion today, Members.
The President: The Hon. Member, Mr Speaker.
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The Speaker: Madam President, just very briefly, I shall certainly be supporting the motion. I
think actually the Department has moved very astutely in this matter. (A Member: Hear, hear.)
The fact that there was nothing in the Pink Book at all demonstrates in fact that advantage has
been taken of an opportunity that has arisen. Quite clearly this facility was not commissioned by
the Department; circumstances have made it become available. It would have been very easy to
let this slip through Government’s fingers by slowness of action or inertia. Certainly that has
happened in the past when opportunities have been missed. I think for legitimate questions to
be asked about this, about the costing of alternative ways of doing it short of Government
involvement … Those have been answered, and I think answered quite effectively, and I would
just like to congratulate the Department on seizing this particular opportunity and giving us the
opportunity to support it this afternoon.
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Mr Robertshaw: Hear, hear.
The President: The Minister to reply.
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The Minister: Thank you, Madam President.
I thank all Hon. Members who have taken part in this debate because this is a very serious
issue and I think it needed plenty of scrutiny.
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I will take it on first person first. The Hon. Member for Malew and Santon, Mr Cregeen,
wanted some assurances that the deposit had not been paid. I can assure the Hon. Court the
person we are looking to buy the property off was told nothing would happen without Tynwald
approval. Having said that, we have already got Treasury approval and we have already got full
Departmental support. We have taken it to Tynwald Court to get support. So nothing has been
paid up front, nothing has been done earlier on it. I think this is one of his key issues.
He wanted to know what the costs were of a bed at Noble’s Hospital and I think I gave in my
speech on the overspend it was £2,000 per week, so on very fag-packet calculations it is £280£290 a day for that.
Will there be an imbalance on nursing homes on the Isle of Man? I think that was his last
point. Mr Malarkey has already pointed out he has personally rung round: there is no spare
nursing home capacity on the Isle of Man. Noble’s Hospital has become a nursing home, Hon.
Members, and as a result of that all we are trying to do is to provide a facility for people who are
living in an eight-bed ward for months and months on end because there is nowhere for them to
go. This nursing home is not going to compete or suddenly put everyone out of business,
because the demand is there. I have already give a speech saying there will be a 10,000 increase
in people over the age of 65. Had some of the Hon. Members who have been critical of this
proposal bothered to turn up to the Department’s five roadshows, two of which were held in
Douglas, and listened to the presentation we gave the public, we explained then about the
nursing home situation and the seriousness of the situation – and I am glad to say Mr Cregeen
was one of those Members who turned up (Mr Corkish: Good lad!) and I am counting on his
support because he understands the issue, along with all the Rushen Members etc.
(Interjections) So I hope I have answered the Hon. Member, Mr Cregeen’s thoughts on this one.
Mr Karran is complimentary about some things that we are doing as a Department, but is
very critical about this. I am afraid I am going to upset my friend, Mr Karran, because he has
upset me by the fact that we gave a presentation on this where all Members had the
opportunity to come along. I know it is a curve ball – we have had to act fast because an
opportunity has come along. Sadly, he stayed in his office, he did not come up and see the
presentation. I could have personally answered any of the concerns that he had on this issue,
but he chose not to come up. (Interjection by Mr Karran) He was the only one in the Chambers –
I nipped down straight after.
We have just had a discussion where Mr Karran was concerned about vulnerable people,
during his Question to me this morning, in nursing homes. He wanted to know what was I doing
to protect them and look after them. One minute he is playing the knight in shining armour for
looking after vulnerable people who are not being looked after well enough, and the next
minute he is happy for me to have eight elderly people in a nursing ward, having to share toilet
facilities for months on end because there is no nursing home space for them. He must think
that is acceptable. For me it is not. Having our elderly in our Hospital – it is a fantastic place if
you are sick and you need looking after, but if you are needing nursing care, living in a ward of
eight people with people coming in and emergency operations in the middle of the night,
disturbing your sleep, you have not got your own en-suite facility … It is the last year or so of
your life: you want a nice facility, you want en-suite, you want to be not disturbed by families of
other people coming in and interrupting your sleep or thought process, your privacy. And yet
here we are – he is happy for that situation to continue for a number of years until the situation
is fixed. (Interjection by Mr Karran)
He then says he has been advised by people in the nursing home fraternity who say that the
property is too expensive, (Interjection by Mr Karran) and then in the same sentence he went on
to describe that there is a cartel in the nursing homes who have just been advising him that this
property is too expensive.
Mr Karran: I said a member in the building industry, I think you will find, on that subject.
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The Minister: Well, we will double check there, Hon. Member.
Mr Karran: Yes, do, and come back and apologise later … [Inaudible]
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The Minister: Had the Hon. Member for Onchan bothered to attend the presentation, and
had he read the fact sheet that was sent to him answering all the questions … We have had an
off-Island nursing home valuer come over and look at our facility. They have compared the
facility at Salisbury Street with other sales on Island and off Island. They are comparing apples
with apples. They have given us examples of a 60-bed turnkey located in Hertfordshire, and that
sold in mid-2015 for £120,000 per bed; a number of homes of between 60 and 66 beds located
across England and Scotland that are currently on the market or have been sold in the last two
years at prices broadly in the region of £90,000 to £100,000 per bed. These are second-hand
nursing home beds. These transactions typically reflect markets within the average fee
achievable in excess of £750 but no higher than £900 per week, and we are being charged a
minimum of £950 on the Isle of Man for people of the Isle of Man. Turnkey values in excess of
£135,000 per bed are achievable in the market across England and Scotland; however, these are
predominantly within the southeast of England, where average fees rate in the region of £1,000
per week or more. And that, sadly, is where we are going on the Isle of Man.
He raised a valid point about why didn’t we say to the providers of Salisbury Street, ‘Let’s
block book at the payment level of £820,’ and again, had he been there he would have heard the
answer: they would not accept it. They had done their business case on £1,000-£1,100 a week:
that is the way the market is going; this is arguably the best nursing home on the Island – it is
the most recent, the size of the rooms is 14.5 m2 to 16.5 m2, a fantastic facility for the people of
the Isle of Man. Therefore they would not accept the benefit levels. Because there is not any
spare capacity on the Isle of Man, why would you accept £820 a week when you can make
£1,000-£1,100 per week? That is the reality of the situation we are living in. And Mr Malarkey
has independently rung around – I do not know if the Hon. Member for Onchan has rung around
to see what the nursing home capacity is on the Isle of Man. He has not, he just – (Interjection by
Mr Karran) I thought I had the floor, sir.
Mr Karran: Yes, well, you just asked a question.
The President: Hon. Members, come on, we are getting tetchy. Let’s settle down to proper
debate, please.
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The Minister: This nursing home is going to have 40 beds for people who are unable to pay
the full market price. It will enable us to get people out of Noble’s Hospital. We have already
mentioned the fact that it is £2,000 a week in Noble’s Hospital. When you look at the cost of the
facility, sadly, whilst it is a lot of money at £7.9 million, what we are faced with as a Department
having to pay, as taxpayers, to keep people in Noble’s Hospital, it is a very cheap option and it
puts people where they should be, not where they want to be.
The Hon. Member is right about the design. Designing Government projects going forward, I
hope that we will look at it, because at the moment, paying an architect a percentage to design
a building and a percentage of the cost, I am not sure we do get good value for money and I
think design and build is something that we are going to have to look at going forward. The
Department has already done this with a home for adults with disabilities at Leece Lodge and it
has turned out to be a very good facility.
If we move on to my hon. colleague, Mrs Beecroft, who was sadly off sick and I fully accept
she could not make the presentation, though she did not make any of my roadshows and she did
not come to me to ask. I value her opinion and I would have happily given her the support. She
asked the valid question: why did they not continue to run it? Well, if they had run it, it would
have been at full market price. We were faced with the fact that we have got in the Pink Book
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going forward costs to replace Glenside. I put a year down for planning because it would have to
go to an independent inspector. There are a lot of wealthy houses in the area and I think we
might have had some objections to that, so I allowed a year for planning. It has taken 16 months,
I think, and counting, to build Salisbury Street, so I do not think it has been done in 12 months,
but I stand corrected if the Hon. Member … I think Mr Karran felt … or Mr Thomas, I think, said it
could be built in a year. He would be doing well. If he can give me examples of a nursing home
built from start to finish and kitted out in a year, then I would like to know the company that has
done that so we can have a word with them.
I think it was Mrs Beecroft … about could it be mothballed, the development, if they cannot
find it. And I think Mr Thomas raised the issue of whether or not we, as a Department, are going
to have problems getting staff to run it. I did specifically state in my speech that it is not going to
be easy. However, we are not talking of 50 nurses to run this, which … whether I misheard … It is
nurses plus care assistants. The Department has recently advertised for 14 care staff and we
have received 26 applications, so I would hope that would give reassurance that whilst I know it
is not going to be easy, first of all we hope that, should it be approved by Tynwald, we will go
straight out for expressions of interest, and we have been working on that contract for some …
The minute we thought we were going to go ahead with this we have been working already on
all the paperwork to go out for expressions of interest so we can hit the ground running. It is
only as a worst-case scenario, if no one contacts us to run the nursing home for us, that we will
then set up an arm’s-length company, though I am led to believe we have already had interest
and it is just by the publicity generated.
If we move on to Mr Harmer, I thank him for his support. Obviously, he has been involved in
the Department discussions. He will know all the details and has had a few weeks’ notice on this,
because this has not been something we have been working on for a year. An opportunity came
along, we were in negotiations to try and block book benefit beds, we could not find anyone
who would accept it, so we took the decision that if we were going to have to design and build
and get Tynwald approval for a nursing home … How long would that take? Two to three years –
and then we have got a hospital with 38 people and peaked at the wintertime. Do we want to
have another two to three years of winters of our elderly people having to go through that? Or
would it be cheaper to buy this facility and ease the situation at Noble’s Hospital whilst we go
out to conversations with nursing home providers to try and encourage them to build more
nursing homes on the Island – because obviously with the figures I have given time and time
again there is a demand for it.
Now if I can move on to Mr Thomas, and again, had he attended any of the Department’s
roadshows – there were two excellent ones in Douglas, one standing room only – then he would
have heard the comments about the nursing home. He mentioned something I said in 2012 as
Minister – I do not think I was Minister in 2012; it was 2014 before I had the honour to be made
Health and Social Care Minister – but he did mention that in October 2014 I gave an Answer
about numbers, and if he had listened to my previous answer on the overspend, I gave the
number of bed blocking needing nursing homes for the last three years, and in that period I
think I gave, off the top of my head, 828, 830 nights, and then, the following year, 2015-16, after
we had had the conversation on the floor of Tynwald or Keys – I do not know when he was
quoting me from – it shot up to three thousand one hundred and something, and that is where
the sudden increase has happened.
He then goes on to the comparisons on cost of nursing homes, and it has been a theme which
I have had quite a lot, which is why we got off-Island experts in nursing home valuations to
compare like with like, not a 30 or 40-year-old building with 20 beds that has come to the end of
its life, not something in Wales or wherever at different prices. We do not know whether the
size of the rooms is big enough, do they comply with the standards or not, and therefore … I do
not have the technical expertise of comparing building costs for nursing homes on and off the
Island; I am sure the Hon. Member, Mr Thomas – and Mr Cregeen, who also raised it with me –
do not have these skills. And yes, people will come along and say, ‘Oh, you’re paying too much
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for that,’ which is why we went out and took expert, professional advice in the field from people
who understand this valuation, just to make sure that we were not paying over the odds –
because, trust me, Madam President, no, I do not want to be paying over the odds for a nursing
home if I can get it cheaper. I am very keen on making sure that the taxpayer gets value for
money.
He was concerned about staffing it. I have been totally honest with Members, I addressed it
in my opening speech: this is not going to be easy, but it must be done because those people
living in Noble’s Hospital, in wards of eight, waiting to go in, those people who want respite care
for their loved ones but the residential homes are full because they have got people waiting to
go into nursing homes and there are no nursing home beds … We have to get the solution
through and we have to make it work, and that is why we have been working flat out as a
Department. When you see a problem you have got to try and fix it as quickly as possible, and
there is no way I or any Members of our Department, and the Council of Ministers, want elderly
vulnerable people having to live either in hospital in wards of eight beds, or having to stay at
home because they cannot get anywhere else. This is a solution. It is an unusual solution, I know.
It is not something you would want to do every day of the week, and trust me, it has taken an
awful lot of officer time and departmental time with all my political colleagues working hard to
try and come up with a solution to help those vulnerable people.
Mr Thomas said also he was concerned about the fact that it was not in the Pink Book. If I
could point out that the cost for a redesign of Glenside, a rebuild of Glenside, was in the Pink
Book – there were architects’ fees of, I think, about circa £300,000 (Mr Thomas: Three hundred
thousand, yes.) for the design, which showed the Department’s proposal to go head. Glenside
was shut, we have had provisional plans drawn up to replace it, we had had provisional costings
of a new care home on the Isle of Man. We were working through all that and we had a business
case going to Treasury, when all of a sudden a situation presents itself where a nursing home
that we can buy cheaper than we were going to build ourselves solves the problems three years
in advance, or maybe two and a half years. Or maybe two years, if Mr Thomas can find a builder
who can do the lot in 12 months and key-turn it – then it still solves the issue significantly
quicker and saves … I have given the figures of over £3 million a year for 30 people living in
Noble’s Hospital, who should be in a nursing home. That is millions, not tens of thousands,
hundreds of thousands. It is a big cost. It has not been an easy decision, it is not something we
have taken lightly; this is a serious situation.
Mr Malarkey – I thank him very much for his support. He has rung round and seen for himself
the concerns that his constituents in Douglas are experiencing – a little bit critical of why
Glenside was not replaced earlier, but I would say we as a Department were working on a
strategy to replace it. We were hopefully going to go to Tynwald next month to ask for the
support to go ahead with it, but that would have taken a much longer period to do. This is a
quicker solution and suits all.
Mr Speaker – I would like to thank him very much for his support.
I am sorry I have taken so long, Madam President, but it is an incredibly important issue and I
wanted all the facts to get out to all Hon. Members.
I beg to move.
The President: The motion before the Court is set out at Item 7. Those in favour, please say
aye; against, no. The ayes have it.
A division was called for and electronic voting resulted as follows:
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In the Keys – Ayes 20, Noes 3
FOR
Mr Bell
Mr Boot
Mr Cannan
Mr Cregeen
Mr Gawne
Mr Hall
Mr Harmer
Mr Joughin
Mr Malarkey
Mr Peake
Mr Quayle
Mr Quirk
Mr Robertshaw
Mr Ronan
Mr Shimmin
Mr Singer
Mr Skelly
Mr Teare
The Speaker
Mr Watterson
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AGAINST
Mrs Beecroft
Mr Karran
Mr Thomas
The Speaker: Madam President, in the Keys, 20 votes for, 3 against.
In the Council – Ayes 9, Noes 0
FOR
Mr Anderson
Mr Coleman
Mr Corkish
Mr Cretney
Mr Crookall
Mr Henderson
The Lord Bishop
Mr Turner
Mr Wild
AGAINST
None
The President: In the Council, 9 votes for, no votes against. The motion therefore carries,
Hon. Members.
At this point we will take a break, and the break will be until 5.25.
The Court adjourned at 4.59 p.m.
and resumed its sitting at 5.27 p.m.
Announcement of Royal Assent
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The President: Please be seated, Hon. Members.
I can announce that Royal Assent has been given to the Concessionary Travel Schemes Act
2016, the Police (Amendment) Act 2016, the Preferential Payments (Amendment) Act 2016 and
the Road Races Act 2016.
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8. Castletown and Port Erin Fire Stations –
Replacement –
Expenditure approved
The Minister for Home Affairs to move:
That Tynwald approves of the Department of Home Affairs incurring expenditure not
exceeding £1,458,000 in respect of the replacement for Castletown and Port Erin Fire Stations.
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The President: We continue now at Item 8, Hon. Members. I call on the Minister for Home
Affairs.
The Minister for Home Affairs (Mr Watterson): Madam President, the purpose of this
motion is to seek the approval of the Hon. Court to the expenditure of a sum not exceeding
£1,458,000 for the construction of a combined fire and ambulance station opposite Ronaldsway
Airport and the conversion of the Southern Ambulance Station to replace Port Erin Fire Station.
In 2014, a business case for the scheme was submitted by the DHA and Treasury concurrence
was given in April this year.
In terms of justification, the present Castletown Fire Station, located at Farrant’s Way,
Castletown, was built in 1964 and is over 50 years old. The station has served the community of
Castletown and the Isle of Man well throughout this period of time. However, the decaying
structure, the present inadequate facilities, together with the operational requirements of a
modern-day fire and rescue service mean that it is no longer fit for purpose. There is only one
toilet at Port Erin and neither station has shower facilities or facilities for female officers.
The present Port Erin station located at Droghadfayle Road, Port Erin, was built in 1957 and is
nearly 60 years old. The station has served the community of Rushen and the Isle of Man well
throughout this period of time. However, it is in a similar if not worse state and condition than
Castletown Fire Station. The chosen site at the land in Government ownership located in front of
the Sefton Express was deemed to be the most suitable for the combined fire and ambulance
station. It was appropriately zoned, Government-owned, has good access to the Douglas Road,
was big enough to accommodate the proposed building and has the right topography and
drainage. The aspiration of the Department by combining premises between the Fire and
Ambulance Services will provide an excellent example of collaborative blue-light working
between two key emergency services. It will allow for the sharing of one purpose-built facility. It
will present an opportunity for an effective joint emergency blue-light response when required
and for the development of training between the staff.
A training ground is incorporated into the Ronaldsway scheme with a tower that will allow
for other Isle of Man Government Departments to use, such as the Department of
Infrastructure, for line rescue work. The current and future risks to the community will be better
served from this premises. Also recruitment for retained firefighters will be widened to
encompass Ballasalla, because they will fall within the catchment area.
As part of the project to combine the existing Southern Ambulance Station with the new fire
and ambulance station, the present site and premises currently located near Southlands will
become available to relocate the existing Port Erin Fire Station from its current location.
The relocation of Port Erin Fire Station to the existing ambulance station provides a further
excellent example of utilising existing premises with minor investment to create a fire station
with improved facilities. The station will be located in a slightly better geographical position to
serve Port St Mary, Port Erin, Colby, Ballabeg and will also provide for more effective response
to support the staff at Castletown Fire Station when it is operationally necessary. The potential
to recruit retained firefighters in the future from nearby villages will widen by its new site
location.
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Joint training opportunities by the use of the training tower in areas that the new combined
fire station will provide a further enhancement for the safety of our Island’s firefighters.
Finally, while the motion is to spend £1.458 million on building at these two sites, preliminary
estimates are that the land values could fetch around £1 million, should they be sold on the
open market, reducing the overall cost to Government.
I would like to thank Members who came along to the presentation last week, as well as to
Kevin Groom and Geoff Quayle who have put a lot of hard work and energy into seeing this
concept through to this stage and I beg to move, Madam President.
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The President: The Hon. Member, Mr Thomas.
Mr Thomas: Thank you, Madam President.
I beg leave to second.
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The President: The Hon. Member, Mr Cregeen.
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Mr Cregeen: Thank you, Madam President,.
I am sure it is going to be a much welcome facility in the Ronaldsway area, which will serve
both Castletown and Malew.
Will the Minister give a commitment that the existing site in Castletown, if it is still available
after the construction of the new fire station site, will be available for public parking whilst they
are trying to shop in Castletown – it is not going to be fenced off, so it will be available for
people in the area to use?
Has he approached the local authority to see whether they would be interested in purchasing
this to assist with the regeneration programme in Castletown?
The President: The Hon. Member, Mr Karran.
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Mr Karran: Eaghtyrane, I have no issues. It looks like, with the change of population, that
there have to be changes, as far as the construction of a new fire station is concerned.
I have no issue about the fact that with modern standards of hygiene and employment laws,
if we are not providing the equal opportunities of the staff requirements for female staff, then
we have to address this.
So I have no problem, when we come up with logical sensible ways forward as far as the issue
is concerned. That is in the environment of remembering being on one's own, when we had the
absurdity of the lower Douglas police station site, where we paid £1 million to develop it from a
from an office development to a police station, and we did not even have a brick on the site; and
here we are finding ourselves having to close.
So, if there is a strategic reason for why we develop these things, then we should not be
objecting. It is the lack of coming up with clear strategy on many of these capital projects that
worry me.
So, I am not objecting to this, like I was not objecting to the one of the over-vote by the
Health and Social Care Department, but it does mean about coming up with a clear strategy and
long-term policies of how far we are going to go.
If we do not address these issues on that basis, there is £1 million-worth of capital costs plus
the revenue charges that have to come out of that Department, so it cannot be placed on the
likes of paying for firemen or the likes of policemen.
What I am concerned about is still the fact about the pound in our pocket. We see the
building costs are £1.1 million. The professional fees are £129,605 but on top of those
professional fees, we have got another £13,000 for building regulations; another £15,000 for site
supervision; another £50,000 for investigations, surveys and feasibility studies; and air tightness
and testing works.
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I do think that we need to be asking ourselves … I will not be here after the next election.
What we will need to be realising is that the fact is that we have got to make sure we have
effective, efficient spending.
We have had the good argument of the population changes as far as the Fire Service is
concerned, and the argument as far as the issue of the standards just cannot be incorporated
into the existing ambulance building at the bottom – the one in Port Erin. But I do think the
Minister needs to clarify. We are still paying out well over 10% to 15%-plus in administration
costs, for the capital costs, (Interjection) if the building costs are £1.1 million and we end up
paying out something like £200,000 – in that region – as far as site tests, building regulations,
supervision. (The Minister: It’s normal.) We need to be looking at how we going to address that
issue of getting good return for our capital outlay, as far as the construction industry is
concerned.
So I will not be objecting to this proposal, like I did not with the other, and I do believe there
are legitimate arguments on this case, but we really need this issue to be addressed by these
Departments and by the likes of the Treasury, as to why are we talking about something in the
region of 18% to 20% of the costs of the project is on design costs. Something is desperately
wrong there, particularly when we see the issues of revenue cuts, as far as this Department and
other Departments are concerned.
I would just like him to explain, what is the great complication on that issue, and will the
Minister be considering in the future the idea of putting ambulance and fire services together? If
we want to keep the principles of a welfare state, of health services, we have got to start looking
more keenly as far as how we provide them to create the effectiveness, so that we keep to the
principles of Bevin on other issues and the principles of what we want for high standards as far
as our Fire and Rescue Services are concerned.
The President: The Hon. Member, Mr Ronan.
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Mr Ronan: Thank you, Madam President.
Obviously, I will stand to support the motion in front of us today.
Madam President, if I may just touch on Port Erin first, I think this is a very sensible proposal
and way forward. I think using a modern facility like you have, and utilising it into a modern fire
services and blue-light service, as you say is highly commendable.
May I touch on Mr Karran’s comments about capital costs? Being an ex-builder yourself, Mr
Karran, you should understand that you do not just chuck your builders on site and they start
the work. There are a lot of professional works that need to be done. If I was an architect or part
of professional services now, I would be quite insulted actually. Every time we seem to come
through here with a capital project, they get a kicking!
Well, it is part of the building process, and I think we all know that. Whereas I understand you
talk about percentages, what I will say, certainly in regard to Port Erin, is that I would imagine
there has been an immense amount of detailed work to amend that building, and saving the
taxpayer multiple hundreds of thousands of pounds. So I applaud you on that. Again, I think the
location at the Four Roads is excellent, and brings the port of Port St Mary and the parishes of
Rushen more into play, which is good.
That brings us on to the Castletown station. I will say, Madam President – most Members
know here – I am an ex-retained fireman at Castletown. That building certainly is due for
replacement and I have been totally supportive of this proposal right the way through. I think, as
well, touching what Mr Cregeen said, he is right: the location is right, because we have got to
acknowledge, Castletown, something which I have fought long and hard to address – its
population has stayed stagnant for well over 30 years and where Ballasalla has grown. It is only
fair that the location is there.
That brings us to the site in Castletown. This is, I would suggest as someone who knows the
area extremely well, having lived there all my life, Castletown in the centre of town, Madam
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President, is running out of land. What I will say is that that land, I would arguably say, is very,
very precious to the town. Whether it is car parking, whether it is another usage for the town,
but it has to be right.
What I will say is that it is all well and good going to the highest bidder, but sometimes the
highest bidder might not be right for an area, or might not be right for Castletown.
I think there was a planning application put through, not so long ago – a couple of years ago
now – to perhaps turn it into residential. I think we have to acknowledge that the change in the
central development which has been going on for the past decade, which is Callow’s Yard, now is
predominantly residential. I think we have got to be careful that we do not do an overkill in the
centre of town, certainly on that piece of land. I would please urge caution – and Mr Cregeen is
absolutely right – engagement with the local authority is key at this point as well, because they
are the people with their feet on the ground.
Finally Madam President, just on the location itself, where the new fire station is going in
Castletown and Malew, which is the Ronaldsway Business Park. As we all know, there is a Master
Plan going on now. I had discussions with the Minister for Economic Development and the
Minister for Home Affairs about the balance of that very important site for the future economy
of the Isle of Man. I think what we have to do is work with the people in Economic Development
who are doing the plan, and make sure that that fire station does not hinder and prohibit future
investment and growth, which I know … and in fairness to the Minister for Home Affairs, he has
already come up with good solutions to make it part of the new development and the new
Master Plan, but do not prohibit investment.
Madam President, I totally support this proposal. It is long overdue and I congratulate the
Chief Fire Officer and his officers for doing these proposals. It is going to be of great benefit to
the south of the Isle of Man.
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The President: The Hon. Member for Onchan, Mr Quirk.
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Mr Quirk: Thank you, Madam President.
I too will be supporting the issue at the Ronaldsway industrial estate. If I could say that I do
support the officers who in my time – my short period with the Home Affairs service – in doing
the Fire Service after another Member … It is nice to see all these issues coming to fruition and
from the drawing board, Madam President, getting it to a construction phase. I think it will
strengthen the Ronaldsway industrial estate and park there, because over the few years now we
have had some major fires in that particular area.
So my concern is not to the fire brigade really; it is just a plea to the Chief Fire Officer who is
here today. We need to strengthen up to … I was amazed really that industrial factory units are
not aware all time what is actually in them. So there is a plea to the Home Affairs Minister and
his colleague there who looks after the Fire Service, that in a planning term now, I would love to
see something in the future to make sure that we know that oxygen cylinders are in there,
acetylene cylinders in there, gas cylinders in there or whatever, and what sort of chemicals,
because at the end of the day, if we do not have a good Fire Service, we lose the lot and we do
not want to lose any lives.
But I will be supporting it 100%. As it is in the Ronaldsway area, I am sure it will be called the
Ronaldsway Fire Station. (Interjections)
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The President: The Minister to reply.
4225
The Minister: I would like to thank the Members for their support in replacing these two old
time-expired sites, with facilities that are fit for our firefighters, who put themselves in harm's
way for our community.
Mr Cregeen, in terms of the existing site – and a number of people have mentioned the
existing site and whether it will be available for car parking – not the local authority have not yet
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been approached. I think that would be premature before this Court had agreed to the future of
the Castletown Fire Station.
In terms of going forward, what would be our plan is that once the fire station had migrated
out to the Ronaldsway site, it would really be … it is not something that the Department of
Home Affairs has an active interest in, so it will probably be handed over the Strategic Asset
Management Unit, in terms of then deciding within the greater piece of Government what the
right use for that space was, whether that was inside Government or outside. (Interjection)
In terms of Mr Karran, thanking him for his support for our strategy and our well-thoughtthrough policies. I will take that as an endorsement. The detailed breakdown that is put before
the Court represents our commitment to openness and transparency, to make sure that
everything is there and it has been put before you. Of course over the loan charges, because
these are capital costs, rather than revenue costs, these will be paid back over the life of the
buildings, so that can be 30 to 60 years, so they are negligible in that context.
But they have been subject to Treasury scrutiny. They have been subject to scrutiny within
the Department. Ian Notman who is responsible for the estates in our Department has a lot of
experience in this area and I was remiss in thanking him earlier for his part in this project as well.
Interestingly, though, in terms of some of the fees that the Hon. Member has picked out –
the £13,000 for building regulation and the £50,000 for site investigations – some of that will
actually be done by Government, so they are costs imposed by other parts of Government for
our work. Such is the way of things.
Mr Ronan’s support for collaborative working: again about the future of the site and the
interests of Castletown. I do appreciate these comments about making sure that the site is used
wisely to help develop Castletown as a thriving detailed commercial centre. I think that is what
we all want to see and that is something that we need to take in the round when it comes to
that Government decision further down the line.
In terms of comments from Mr Quirk, again, yes, there in the early days; it is nice to see these
things through. It think the people are going to be most glad to see these things through are the
firefighters, who I think had promises as long ago as 20 years ago, that their facilities were out of
date and needed modernising so it is really for them. They have waited a long time for this.
To conclude, Madam President, the innovative thinking for a combined Fire and Ambulance
Station, together with the relocation of Port Erin Fire Station will provide for much-needed
improved facilities, evolve collaborative blue-light working, and provide value for money for our
two key emergency services that serve our community.
I beg to move.
The President: The motion before the Court is set out at Item 8. Those in favour, please say
aye; against, no. The ayes have it. The ayes have it.
9. Supplementary Capital Authorities –
Expenditure approved
The Minister for the Treasury to move:
That Tynwald authorises the Treasury to expend from the Capital Transactions Account in
respect of the year ended 31st March 2016:
Sums not exceeding £8,041,174 in payment of the items set out in Column 6 of the Schedule
hereto (incurred mainly due to timing differences in the capital programme).
Sums not exceeding £3,289,381 incurred in respect of the items set out in Column 7 of the
Schedule hereto (of which £3,020,209 is included within the amounts in Column 6).
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Schedule – supplementary capital authorities for 2015-16
Notes:
1. Column 6 shows the Supplementary Capital Vote required to authorise the additional
expenditure compared to the Vote in the Budget for the last Financial Year. Exceeding the
Vote for the year does not necessarily imply that the total cost of the project approved by
Tynwald has been exceeded and it can arise simply because a project proceeds faster than
originally estimated.
2. These items are very minor and could be funded from revenue if required.
3. A further £200,000 was approved for the Residential Accommodation Scheme by Tynwald
in the February 2016 budget, therefore this additional expenditure is covered by that
additional vote.
4. The DSC planned maintenance scheme is funded by the Housing Reserve Fund. A further
£1,600,000 was approved by Tynwald in the February 2016 budget, therefore this additional
expenditure is covered by that additional vote.
5. A further £1,600,000 was approved for the Strategic Highway Refurbishment Scheme by
Tynwald in the February 2016 budget, therefore this additional expenditure is covered by that
additional vote.
6. The Strategic Structural Maintenance Scheme was accelerated in agreement with Treasury.
A further £1,540,000 was approved for this scheme by Tynwald in the February 2016 budget,
therefore this additional expenditure is covered by that additional vote.
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7. Treasury agreed that up to £250,000 of the scheme for the Liverpool Landing Stage could
be funded by the Treasury Contingency Budget (£1,000,000), therefore this additional
expenditure is covered by that vote.
8. Treasury agreed that, due to the emergency nature of the works, up to £630,000 of the
scheme for the Snaefell Mountain Railway Storm Recovery project could be funded by the
Treasury Contingency Budget, therefore this additional expenditure is covered by that vote.
9. During the year the DHA acquired the former Drill Hall, Tromode from the MUA for a
notional sum of £1,650,000. No cash was exchanged but instead the MUA outstanding capital
loans have been reduced by this amount. Treasury agreed that any future proceeds from the
sale of the former DHA HQ, Homefield, would be set aside for the Land and Property
Acquisition Reserve.
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The President: Item 9. The Minister for the Treasury.
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The Minister for the Treasury (Mr Teare): Thank you, Madam President.
The need for the supplementary authorities arises from those items of capital expenditure
where the amount spent last financial year exceeded the capital votes approved by this Hon.
Court for that period and is, in the most part, due to timing differences.
Timing differences arise when capital schemes proceed at a different pace than anticipated
when the budget was prepared. This motion is basically an account reconciliation exercise.
I would like to make it very clear that this does not imply that the projects are overspent.
Merely there are timing issues. I am aware that this can cause confusion and I have asked
Treasury officers to review the way in which capital approvals are granted in the future.
The sum of expenditure to be approved under part one of this motion is £8,041,174 and this
includes the amount to be approved under part two of the motion which is £3,289,381.
Within column 7, there are four schemes which received the necessary approvals by Tynwald
in this year’s Budget at the February 2016 sitting. These are schemes 10, 15, 25 and 32 within
the schedule and total £1,530,533. There were two schemes which were considered to be of an
emergency nature and Treasury therefore approved spending from the capital contingency
budget. These are schemes 33 and 34 of the schedule and total £108,242.
One scheme was not budgeted but was an internal Government transaction. That is the sale
of former Water and Sewerage Headquarters by the Manx Utilities Authority to the Department
of Home Affairs for £1,650,000.
The remaining schemes in column 7 are minor in nature, and total £606.
The rest of the approvals within column 6 represent timing differences only: mostly
payments that were expected to be made in 2014-15 but were delayed and therefore paid in
2015-16 so had adequate budget, but it was just in the wrong year.
It is often difficult for a Department to forecast the value of payments to be made in a
particular year on a scheme which overlaps several financial years. There will always be some
schemes which proceed more slowly than planned, and therefore it is appropriate that other
schemes that are able to proceed more quickly than intended are allowed to do so in order to
support the local construction industry and the wider economy.
The purpose of this motion is to approve the accounting treatment of expenditure that has
been funded from the capital transactions account. I will leave any detailed comment if
necessary or appropriate to the Minister responsible for that particular scheme.
Madam President, I beg to move the resolution standing on the Order Paper in my name.
Thank you.
The President: Hon. Member, Mr Anderson.
Mr Anderson: Madam President, I beg to second and reserve my remarks.
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The President: The Hon. Member, Mrs Beecroft.
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Mrs Beecroft: Thank you, Madam President.
For a change, I am just going to stand up and thank the Treasury Minister for altering the way
that it is displayed this year. It is a huge improvement on previous years and gives us the
information that we actually need this time. So I would like to thank him for that, and he has my
support for the motion.
The President: Does the Minister wish to reply?
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The Minister: Yes … ! (Laughter and interjections) (Several Members: Shock!) I am almost
speechless, but I would just like to thank the Hon. Member who has resumed her seat for her
support.
Yes, we are working towards, in effect, presenting all our financial information as easy to
assimilate and understand as possible, because what we have found out is that it does reduce
the number of Questions that are asked of us.
Thank you.
Mrs Beecroft: Openness and transparency always works.
4325
The President: The motion is set out at Item 9, Hon. Members. Those in favour, please say
aye; against, no. The ayes have it. The ayes have it.
10. Treasury Bonds Issue –
Motion carried
The Minister for the Treasury to move:
That Tynwald approves that Treasury can issue Bonds up to a total of £50,000,000 with
interest payments and capital repayments being made from general revenue.
The President: Item 10. I call on the Minister for the Treasury.
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The Minister for the Treasury (Mr Teare): Thank you, Madam President.
Under the Isle of Man Loans Act 1974, Tynwald approval is required before Treasury
undertakes any borrowing. This motion is seeking to provide approval to enable Treasury to
issue bonds to a value of £50 million.
Treasury wishes to have the approval in principle in place before undertaking the tender
process to appoint an agent to manage this on our behalf. As the procurement process will take
some time, it is unlikely that any bonds will be issued before the autumn at the earliest.
Hon. Members should also note that we will not be issuing any bonds unless the interest rate
payable is realistic, and the associated costs and ongoing management fees are reasonable. In
effect, it has be a viable exercise.
The schemes contained in the information paper are only examples. The actual schemes
funded by bond issuing may be different. However, no scheme will be undertaken or developed
without prior Tynwald approval where required.
Funding by issuing of bonds enables the spreading of the capital costs over five to ten years,
thus protecting the balance in the capital fund and the general reserve. The bonds will be issued
into the local market, which should provide an alternative savings option for Manx tax residents
and local charities.
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It is proposed that the term of the bonds will be between five and ten years. This timescale
enables the spreading of the cost whilst being attractive to investors. It also helps Treasury
manage the refinancing on maturity. I believe the issuing of these bonds will add benefits for
local economy by taxation receipts from the interest being received by Treasury, interest being
spent locally and encouraging capital to be invested locally. The appointment of an Isle of Man
Financial Services Authority regulated agent should also help local spend and the economy.
I also wish to take this opportunity to provide Members with some background on the Isle of
Man Loans Act 1974. This is outdated legislation which covers not only the issuing bonds but the
procedures for capital transactions. Treasury hope during the next administration to bring
forward new primary legislation to streamline the borrowing process and to reduce the
bureaucracy involved with undertaking spend, whilst maintaining appropriate Tynwald
oversight.
I hope Hon. Members will see the benefits for both Government and the taxpaying public in
the issuance of bonds and will accordingly support this motion.
Madam President, I beg to move the motion standing in my name.
The President: The Hon. Member, Mr Anderson.
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Mr Anderson: Thank you, Madam President.
I beg to second and reserve my remarks.
The President: The Hon. Member, Mrs Beecroft.
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Mrs Beecroft: Thank you, Madam President.
I do have a few queries on this one. If the Treasury Minister could clarify some points, I would
be grateful.
The motion says that Tynwald approves that Treasury can issue bonds up to the total of
£50 million. It does not say anything about it coming back to Tynwald in the motion as it is on
the paper. The Treasury Minister just said that any scheme or bond would be coming back prior
to Tynwald for approval where required. Where is it going to be required? I would have thought
every single instance should be coming back to us first for approval. I could not just give a
blanket authority that Tynwald approves that Treasury can do this, which is what it says on the
paper. That is my real big concern. Okay, it might have an FSA-regulated agency looking at it, but
that is not the same as scrutiny in Tynwald.
The Isle of Man Loans Act 1974, at the beginning, says, ‘the Government may from time to
time, with the approval of Tynwald’. So is this motion giving that Tynwald approval for
everything going forward, unless it is where required?
It is just very ambiguous and all a little bit woolly. I would certainly like more clarification, and
if necessary, if one of his Members would like to issue an amendment that could be supported,
because it would have to say in the motion, ‘with Tynwald approval’ before I could support it.
The President: The Hon. Member for Michael, Mr Cannan.
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Mr Cannan: Thank you, Madam President.
I find this a very weak motion, I have to say, in general terms, because I am afraid that we are
not being given enough information here as to what this is likely to result in in the long term. It
seems to me, now, that we are changing our policy, that we do not have the money any more to
pay for capital funding from revenue. So there is an admission there that we have really failed, I
think, in our rebalancing plans because this was never laid out at the beginning of the five-year
term.
Secondly, the general framework around this, in terms of the purpose of the borrowing, what
type of borrowing is going to be relevant to this type of funding, the length of any investment
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programme – although put down, five to ten years is very vague. The general case for
borrowing, I think, has not really been made particularly well here. We are simply being told that
effectively, the Government no longer has the money to do internal financing of capital projects
and we are going to have to go and borrow the money. But what is our borrowing limit? Have
we set that out clearly in terms of how much we are going to borrow? If it is a year-on-year
borrowing, within four or five years then clearly we are going to be up at around £250 million
plus on the market. We have already got, internally, the Capital Loans Fund is running at about
£830 million to £840 million. We have already got bonds issued from the Manx Utilities
Authority and there is almost £500 million of debt in that context, and now in the next motion
we are going to be talking about the liabilities that this Island has in respect of our pensions, our
Public Sector Pensions. Indeed, on the Government motion, you will see that we have got a
paragraph in there about further funding options that, basically, the PSPN, the Treasury, in
conjunction with Tynwald Members will look at how we can manage the legacy position.
So, what strikes me here, Madam President, is that we are in danger of getting ourselves
engaged in exactly the same problem that we have got with pensions, and we are just taking
everything in isolation: ‘Oh look, we have run out of money for capital expenditure, that means
we are going to have to go and borrow.’ ‘Oh look, we have run out of money for pensions, we
will have to deal with that issue in isolation.’ ‘Oh look, we have run out of money for sewerage
funding, we better deal with that issue by raising sewerage charges.’
We are not taking our spending commitments, our priorities and our responsibilities as a
whole. What is being signalled to me today is that once again we are dealing with a problem in
isolation and what it worryingly signals to me is that the future for the Treasury in terms of its
funding is now through borrowing.
If we are going to do that, we need to clearly set out the frameworks, the context, and the
regulations, if you like, around what that is going to look like. Because otherwise we are in
danger that we are going to end up in a huge mess on this Island. If the Government was going
to have our way, we are going to start going to the market for this £50 million, we have got
borrowings from the MUA through bond issues, we are going to add another £60 million to the
revenue account, and Tynwald is going to get itself in a real mess.
Now, my view is that given what we have got to discuss at the next agenda Item, we say to
the Treasury, whilst we are not going to necessarily reject the idea of going to the market and
raising money, we need to know, in much more detail, the frameworks that you are operating
here. How much money is going to be borrowed over the long-term? This is a change of policy:
every year we are going to go to the market and ask for £50 million or so to fund our capital
borrowings. Is that so that every single item will now be funded? Or is it certain items, is it just
revenue-generating items? And what the impact is going to be in terms of departmental
repayments, and also what the impact is going to be on our own finances.
It is quite concerning that we have reached a stage now where we have effectively admitted
defeat in terms of our ability to run our own budgets, because that is what we are saying today:
we have run out of money, effectively; we cannot fund capital projects now from our income,
and we are going to have to go to the market to borrow this money to continue to protect our
financing of public services. Well fine, I have got no issue in general with the context of that, but
we have got to have a few more plans, we have got to have a bit more context, we have got to
have a framework in my view, in order to be able to put in place this type of policy and to be
going to the market.
And also, as we start to increase our borrowing, which is what the proposition is here, we
also need to know what the impact is going to be on a number of other areas, including our
ratings from people like Moody's, whether that is going to affect it. We have already had a
decrease in our rating over the last few years, and we also need to be clear, I think, from a public
perspective that we are publicly funding the right sort of projects and that we are not getting
ourselves engaged in funding projects that we do not see any return from or any revenue return
from, and I think that that has got to be an important aspect of this.
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So I will not be supporting this, on the basis that we do not have enough information, Madam
President, that we do not have enough context, we do not have enough framework, we have
not set ourselves the parameters, we do not have the regulations in place and we have not
necessarily taken this, it would appear, in the context of Government's overall spending
commitments; and because this was not something that was outlined at the beginning of the
term of this government as a way of dealing with the deficit. We were told that we were going
to rebalance the budgets and at no stage did anybody ever say to me or Tynwald that in order to
do that we are going to have to go out to the market and borrow, and do bond issues to
effectively borrow the money.
Thank you, Madam President.
The President: Hon. Member, Mr Thomas.
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Mr Thomas: Thank you, Madam President.
Bonds can provide financing in a very useful way for Governments, and in principle I am
supportive of that. At the moment, there is an incredible opportunity to borrow for a long term,
because interest rates are so low. They have been for five or six years, they might be for a few
more years, but they are, historically, very low, and that might be part of the solution to the
financial situation that we are in.
But like the Hon. Member for Michael, this opportunity, as it is being presented, is not quite
presented fully enough for me to be satisfied at the minute, and I have got some questions for
the Treasury Minister that I hope he can address and persuade me.
The first one is: it is obvious that the intention is to borrow on the most expensive part of the
yield curve, and I am just trying to get my head around that, because I thought governments
were in the business of borrowing money cheaply, but 10 years is the most expensive place to
borrow on the yield curve at the minute and has been for some time. We could borrow much
more cheaply if we borrowed 50 years or 60 years, as we are allowed to do under the Isle of
Man Loans Act, because we are allowed to go up to 60 years already, so why aren’t we
borrowing for 60 years?
I got even more confused when the Treasury Minister offered the explanation for that,
because it would help our refinancing risk, because as I understand it if we borrow 10 years, we
have to refinance in 10 years, and therefore it will increase our refinancing risk by borrowing for
10 years, rather than for 20 years or 30 years or 40 years. Therefore I am a bit confused about
the logic, and I hope that the Treasury Minister can explain that a bit more.
I also note that the purpose and the use of these funds is very different now from what it was
in the February Budget. In the February Budget we were told very clearly it was for the housing
market, and there were three very specific projects inside the housing market that were going to
be used. One or two of those are sort of hinted at in the text but we have got lots of other issues
that could include Salisbury Street House, that could include the capital opportunities that come
up. I am beginning to think we do need an explanation, because it could be that we are running
out of money, like the Hon. Member for Michael is suggesting, and that this is the new way of
getting money to fund capital projects.
I also note from the Isle of Man Loans Act, which is a very old Act and does need replacing,
that we could actually revisit that legislation, and we should revisit that legislation without this
motion. This motion is about giving us borrowing authority for £50 million, and I could not help
but notice that the Minister on the radio was talking about the purpose of this motion was to
encourage us to get consultants, to revisit the Loan Act and to appoint an agent, but we could do
all of those things without this motion.
This motion does not deal with the fact that bonds are now securitised. It has still got a
physical register as far as I can read it. We could issue bearer bonds which are very much against
the spirit of International tax co-operation and avoidance. So there are all sorts of gaps in this
legislation that we need to address and it seems to me we would be in a much better place if we
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had a very specific borrowing project that needed long-term financing and we came back with
long-term financing to provide that very specific asset with appropriate interest rates and
financing for that asset.
So I need persuading, Madam President, from the Treasury Minister on each of those points.
The President: Hon. Member, Mr Karran.
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Mr Karran: Eaghtyrane, when I first saw this I was absolutely amazed because when the
Minister talks about a viable exercise, surely the viable exercise should have been done before
you come to this Court. The meat on the bone should have been there.
It concerns me about not ending up with a situation of seeing the repeats in history that I
have seen over the 30 years of being in this Court. I am the first one to recognise that
Government is going to have to change. But it does seem to me, once again, that we have got
another moonshine salesman, who has come along with some half-thought-out idea, no longterm strategic plans as far as it is concerned, that wants to do this.
Eaghtyrane, I was the one who issued the bond which was to do with the Water Authority
when executive Government wanted me either to play the tune of IRIS, or sit as the Chairman of
the Water Authority, where we did not even know where the plans for the pipes were for the
last 50 years, because the man did not get the job with the Water and Gas Authority so he
burned all the plans of where the pipes were. Fact. Not fiction – reality.
So I am not averse to the idea of bonds. I see this as two things, premature: I believe that
what we should be doing is that they should have had this viable exercise of the costs, the
implications of this done to this Court. Remember, I can remember the illegal loans; I can
remember having a fight with the Chief Executive, who was telling me about how I did not
understand, after we had successfully done the bond for the Water Authority, on a basis of
proper level playing field capitalism – not crony capitalism, but that went out to tender and
everyone had the freedom to flourish. We ended up with the illegal bonds, as far as the MEA is
concerned, that people in this Court illegally legalised, in my opinion.
So I am not averse to the idea. I am not saying there will be times when we should not have a
bond. But there needs to be a strategic reason for clear financial control. I know under the
present system where … and I use the word about opposition. It is not opposition for the sake of
opposition. It is about bringing about audit into the system of government: proper scrutiny.
I believe that if we support this, as it is, I can see the next administration being railroaded,
like they were so many times, that we could start our own tram service with the amount of
white elephants that have come home to roost on the back of half thought out ideas that are
now facing being one of the biggest costs to our citizens through rates having to be charged,
where many of them will be paying more in rates than they will be paying in taxes.
If we do not deal with this issue right, I see this ending up being a declaration of deficit
spending, because that is what will happen. The easy option will be is we will have everybody
patting everybody on the back and we will end up not addressing the good management,
strategic planning process that has been so wilfully lacking. And when we see some of our star
boys in executive Government with the abortions on the taxpayer as far as publicly developed
schemes, turned into an art form as far as they are concerned, because of this present dishonest
party system that we have that basically we are all in it together so we do not expose oneanother.
So I believe that if we support this today, I think you will slip and sleepwalk into a deficit
spending policy, and I think you do not want that. As I say, we need to get the good governance
sorted out. There will be times, in my opinion, where a bond will be an important factor. But if
we use that flexibility up prematurely, my concern is that when we want to re-float the
economy, and we want to stop the haemorrhaging of finance off the Island and take control of
some of the major factors, not through nationalisation, but through the likes of corporatisation
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or co-operatisation in order to stop the toxicity that we have got in the Manx economy, that
opportunity will have been squandered, instead of having us face the hard decisions.
So, I just would like the Minister … I know he can get anything through and we have seen that
for years: IRIS, MEA, we have got different tax agreements which should never have been and
we have ended up with the implications of different things. But as a person who is supposed to
be a right-winger and somebody who believes in good fiscal control, doesn’t he feel that it
serves a purpose to us that he should have done a strategic policy statement now, as far as the
viable exercise now, rather than doing something later? And at the end of the day, Eaghtyrane, it
is two lines and one word, as far as a fundamental change in direction as far as these £50 million
bonds.
I am aware that we have had bonds before. I am aware that, because it was done right and it
can be done right, we ended up with the AAA rating, because of the fact that the issue of
insurance companies needing to invest money on a AAA rating basis, but I just think that once
again, there seems to be a situation where we are making decisions that are premature, as far as
this issue is concerned, because what we need is strategic policy of why we need this bond, how
we are going to use it, how we are going to manage to not fritter this money away and not add it
to the woeful, scandalous way we have allowed this place to operate on behalf of the taxpayers
of the Isle of Man Government with this administration, and the Brown administration before.
So I cannot see how one can really support this, and that might seem rather strange, in that it
was the bond that managed to get the issue of trying to sort out the long-term financial
positions as far as the water rate is concerned. So, I am not averse to the issue, but I think this is
premature. I think it is important and the points of the Hon. Member for West Douglas about
the length of bonds, particularly with people who are looking for a secure, long-term consistent
thing, are important.
But there was an equally important thing that when we were arguing against the £185
million – and I am not sure, I think it was two of us who voted against that on that basis – was
the issue that when we raise with the Chief Financial Officer and he was telling us, ‘Oh Pete, you
don’t understand. You’re from Pully, you don't understand these things. It’s a rollover bond. It’s
a rollover bond.’
I said, ‘It’s not a lottery win advert – it has got to be paid and if you end up with an
experience like Japan, where you had negative inflation, you have got serious issues as far as the
liabilities on future generations.’
So I just feel that this is premature. This needs to be well thought out. We must not be
burning all our bridges because there will be a time that there will be a need for some sort of
bond for the reinvestment, as far as economic base of this Island, and I just remind Hon.
Members, when I hear the art form of trying to misquote Hansard and misrepresent what I am
on about, being in the forefront of many of the things are today seen as normal, seen as part of
a system, that I had the same reactions 20 or 30 years ago.
The MEA: who was right and who was wrong? For the all fact it might have been the lad from
Pully, just like the User Agreement that was sold off for another £180 million, or put another
£180 million on the capital value, which has effect on the toxicity.
If the Minister was coming back to me and saying he wanted a bond in order to bring the
Steam Packet to heel and say we were going to try and develop what we suggested in Liberal
Vannin as far as a two scenario share basis, where we have these shares of articles of
association, being of control, being the A shares that Government own and the investment
money in the other bond, I would be sitting up and interested. But just to do this on a two-line,
one-word motion here – £50 million which develops, which is in danger of being what the Hon.
Member for Michael is saying, and I do not always agree with the Hon. Member for Michael on
lots of issues, but I do agree with him that this could become a Pandora's box. I think that this is
premature, and what I hope the Minister would do is take this back, work on it, put the evidence
to the next administration – not just the next administration, but to the next Tynwald that is
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supposed to hold you lot to account that we wilfully neglected for so long. We would not even
be here today if we had done our job right in this Court.
So Hon. Members, bear these issues in mind. I am not against the idea, but I think you will
have another legacy that you would have a problem looking the eyes of your grandkids, if you
just nod this through today.
The President: The Hon. Member, Mr Peake.
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Mr Peake: Thank you, Madam President.
I too can see benefit for bonds and for borrowing money for particular projects, where there
is an investment and you can see where the return is coming from, and it too can help people
put money in and they get a better return. So there are good things there.
But I do feel this just feels to me like we are slipping to a deficit balance. It feels like a general
bond for general things, and I just feel a bit uncomfortable with that. Certainly a number of my
constituents have contacted me to say that they really do want to see us living within our
means. This just feels one step too far for the Isle of Man, having so long been proud of trying to
run a non-deficit budget.
Thank you.
The President: The Hon. Member, Mr Watterson.
The Minister for Home Affairs (Mr Watterson): Thank you, Madam President.
Just to perhaps try and redress some of the balance in this debate, you are kind of ‘damned if
you do and damned if you don’t’, aren’t you? (A Member: Hear, hear.) If you come in and ask for
Tynwald approval on a general principle, then you have not provided enough detail, you do not
know what you are talking about and you have not done enough research; then if you come in
with the detail, it is a fait accompli, you should have had this ages ago, and you have wasted a
load of time and effort because it should have been done differently.
So this is very much seeking what in planning terms would be called ‘approval in principle’ I
think, and to pick up on Mrs Beecroft’s point, I absolutely agree with that: this should be coming
back in detail further down the line. This is something that will get Tynwald approval further
down the line.
Mrs Beecroft: It doesn’t say that.
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Mr Watterson: I appreciate that is not in the motion, but I am sure that is something that the
Treasury Minister will be able to say during his summing up.
I would also agree with some of the points that Mr Thomas made about the antiquity of the
Loans Act and the way that the Consolidated Loans Fund is written in terms of making it
something that is a little bit more receptive in the modern market. I think that you are right,
there is something that we can do there, but I do not think that that stops us with the project
today.
I do also take the point about the yield curve and where 10 years sit, but we have to balance
off a couple of competing interests here, not least of all – and we are going to come on to this in
the next Item, aren’t we? – about making sure that we are not sitting there burdening the next
generation. It has to be something with a foreseeable and realistic time horizon.
So taking money out and borrowing it for 60 years: I would like to think we had learnt a few
lessons from the MEA over long-term borrowing without really seeing how it is going to be
repaid, so looking at revenue streams is key. Actually matching it to what is a meaningful
revenue stream as well is also important.
I think we are also missing out – and it has not been mentioned much yet – about the
benefits that this will have in the wider Island. (A Member: Hear, hear.) Some of the people who
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could really benefit from this, not just in terms of Government – and Mr Cannan did seem to
think that we maybe had not thought about seeing how this was going to sit with the credit
reference agencies. I can assure you, the Treasury Minister would have had that very high in his
mind, as an experienced banker, as to how Moody’s would have been considering this, and it
certainly has been something that has been worked on. They would be content with the level
that we are proposing here.
But we look at the sort of projects that this could support: we are talking about
accommodation rationalisation. Now, even in the DHA, which is a relatively small Department in
Government terms, we have seen enormous advantages and enormous savings in relative terms
by rationalising our estate, bringing things together and saving money. Now, that can happen on
a far larger scale around Government. We have seen already today on our Order Paper about
how asset purchases can come out of the blue, can represent an opportunity for Government –
Salisbury Street being an example there – and where it might also generate a revenue stream
going down the line as well.
So that these opportunities can come along and perhaps most of all from a social
perspective, some of our ambitions around public sector housing, around assisting people in the
midmarket rent area, where there is a desperate need for housing, for people to try and climb
that ladder in housing. Again, associated with a revenue stream, and this can be put into the
detail and brought back, but we are looking for approval in principle today. These are some of
our ambitions about smaller, simpler Government, and about protecting the vulnerable that we
are looking to use this money for, to fund going forward.
I think the final thing that I would mention, in terms of other benefits that we have not really
heard about in the debate so far, is that yes, this is cheap money for Government. This is also
potentially an opportunity for savers in the Isle of Man to invest in our economy. (A Member:
Hear, hear.) to take a stake in the Isle of Man and to get money that is slightly better than they
are getting with the banks. The banks in the Isle of Man (Interjection) have got woeful interest
rates. Now, I am not saying we go and offer a big bonanza to people who have already got
money, but if we can just make that offering that is slightly better, somewhere that they can put
their savings, knowing that they are investing in the infrastructure in our Island, in opportunities
in housing, in opportunities to grow the economy and protect the vulnerable, I think that is an
absolutely compelling offer. I think that is something that we should be supporting in principle
today and we can come back on the detail later.
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The President: Hon. Member, Mr Anderson.
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Mr Anderson: Thank you, Madam President.
I was not going to speak on this Item, but there seems to be quite a lot of negativity in the
Court about this. It has been well trailed. It was trailed in the Budget earlier this year, and there
was quite a lot of positive support for it. So I am quite surprised at the negativity in the Court
this afternoon.
It does, as the last speaker who has just resumed his seat said, give opportunities to our local
population. There are fewer opportunities for our local population to invest now. Here is a rock,
a solid investment company, if you like – Isle of Man Government – to invest in. It also gives
them the opportunity to invest in the Isle of Man, rather than just in a bank somewhere offIsland.
So I am sure that the Treasury Minister will confirm that he will come back with the detail,
and I am not surprised that people need to know the detail, but we are talking about in
principle. We need to get somebody on board to handle this for us and we need to do that now,
before we bring back the principle.
It is a very positive opportunity and I think we should grasp this with both hands. I am sure
the Minister will confirm that it will not actually affect our AAA rating. If we are going to borrow
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from anywhere, we borrow from our own residents, and I am sure that will not compromise our
credit rating. But I am sure he will confirm that anyway.
I just ask people to be more confident in this motion. I am sure that we can come back with
the detail that people are looking for, but just give us the opportunity to bring something back.
The President: The Hon. Member, Mr Quirk.
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Mr Quirk: Thank you, Madam President.
Although the motion is fairly bland, it is a general principle. The explanatory note, as far as I
am concerned, gives me the comfort to me to look at it.
I, like many others on the Island, was looking forward to the bond for people of the Isle of
Man to invest in, and as it does say in the explanatory note charities, organisations and so forth
could put their money into a bond in the Island.
And further on it does give an indication of what the money could be spent on or used for,
the bond issued for. It was for the potential purchase of land, which Government may require;
local authorities may require it or a Department itself. It also goes on regarding DEFA for
improvement works. We do not have many schemes at all for those individuals who want to
improve their properties, and we all want people to live to a modern standard of dwelling. Some
of us may live in more modern houses than others; there may be more advantages for solar
panels on the roof and so forth. But those individuals who are stuck in a traditionally stone built
dwelling in the major towns, the likes of Peel and Douglas, why can’t they have an opportunity
to improve their properties? That is where they live. And these schemes are put forward for
that – the way I am reading it, Treasury Minister.
It does say, also, that there is a requirement for Tynwald approval for the schemes coming
forward, if they are not a normal scheme. So there will be some input from this Hon. Court
putting this forward.
Can I say, there are a lot of people out there looking to invest in their own Island instead of
investing offshore. (A Member: Hear, hear.) They want to invest in their own country – why not
given them an opportunity to do that?
The President: The Hon. Member, Mr Coleman.
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Mr Coleman: Thank you, Madam President.
I am quite happy to support this in principle but when we get the detail back I would like to
see certain information.
I support it basically because, as the Hon. Member for Council, Mr Anderson, has said, we
have banks leaving the Island, deposit-taking institutions, and we do not want our population
consolidating too many of their assets in one place because we have a very limited deposit
protection scheme. This gives another option. It gives us another option for people to put
money in, and also benefit the Island.
The things I would like to get some information on when you do come back: obviously it
would be the cost of the launch and the cost annually of paying the interest, the interest rate. Of
course, as you are the tax receiver you could actually make the interest rate 20% higher and
then it would actually be neutral to Treasury. It would be interesting to know such simple things
with bonds: the day/year base, one presumes it will be 365/365 or you could make it 360/360, if
you wanted to.
I suppose the last thing is that we are possible speaking about some people who have not
dealt in bonds before, and I would like to see a third party market maker on these bonds. I can
remember when I chaired the Investment Committee at the Water Authority and we wanted to
buy back our own bonds, with Treasury permission. It was the devil’s own job to try and find
anyone who wanted to sell them. I think if you are going to get into this type of retail bond you
need a market maker that you can go to and say, ‘I want to sell these, what can I get for them?’
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or ‘I want to buy some more.’ That is assuming that the issue has been fully subscribed from
Treasury.
So, I am happy to support this. I think you also need to remember that legally the two bonds
that are issued are Treasury bonds anyway: the MEA and the Water Authority are actually
Treasury bonds.
I await the detail with interest.
The President: The Hon. Member, Mr Harmer.
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Mr Harmer: Thank you, Madam President.
In principle, I support this because I know in local authorities and elsewhere that people do
want to invest in the Island.
I just want to be absolutely certain that this is not a blank cheque; if the Treasury Minister
can confirm that every loan will still need to come back and the detail will still need to come
back to this Court.
The motion does not need to be amended in any way; it is just that we are establishing a
principle that can go forward because obviously, if we can invest in our Island it is a good thing.
But, as my understanding, this is not a blank cheque, this is just approving in principle.
The President: The mover to reply.
The Minister for the Treasury: A very interesting debate, Madam President.
I must admit, until a couple of minutes ago I was tempted to pull the motion, with the
negativity of the debate. I think really that there are none as blind as those who do not see, or
indeed will not read … What we were looking for was agreement in principle, nothing more,
nothing less.
Just let us take the next step down the road so that we at least know the principle has been
accepted. Then we can work on the details, and come back to this Hon. Court, albeit at another
time, with the details so that we can get the specific approval to specific proposals. Not only the
terms of the bonds but also what the funding would be used for.
If I can just go to the individual contributions. The Hon. Member for South Douglas, Mrs
Beecroft: yes, we will be coming back to Tynwald with specific proposals for use of the money.
This is not, as somebody else said, Mr Harmer I think it was, ‘a blank cheque’. It is not, so I am
quite happy to give that assurance. The projects will be individually approved so that where the
money is spent will have to be approved by this Hon. Court.
The Hon. Member for Michael, Mr Cannan, accused the proposal as being weak, not enough
information, an admission we do not have the money, an admission of failure to rebalance. Well,
he is true to his form – his negativity is consistent. He asked for the length of the investment
programme, the borrowing limits. He was trying to make out we are going to borrow £50 million
a year. Once again, read the motion: £50 million in principle, nothing more. Not every year; £50
million, full stop. But it does not make good radio – let’s egg it up a bit – and that is exactly what
the Hon. Member for Michael is trying to do. He is trying to say that – well, in fact he did say –
every year we are going to borrow £50 million. I have to say, at the risk of being somewhat
unparliamentary, that is a load of kibosh.
Let’s set the record straight: look at the motion again. He was asking whether this would
support general revenue or any items now. Have a look again at the 1974 Loans Act. We are not
allowed to borrow to support general revenue; it has to be for capital items. So we are already
working within the constraints of the Loans Act.
He feels that we have admitted defeat. Far from it, we do not have to do this; our backs are
not against the wall. And if this Hon. Court says, ‘No, thank you very much,’ that is fine. What we
will do is, as the projects develop, we will have to, in effect sell down some of our reserves. The
reserves are there, they can be used. But it gives us more flexibility. It also gives us more
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liquidity and at times, when we need the money, we may think it is not a good time to liquidate
the investments. So they are good commercial decisions.
The ratings issue: as some Hon. Members would expect, but not the Hon. Member for
Michael, we did check with the rating agency and they have confirmed there will be no change
to the rating agencies. Not only did we check with the rating agencies, we checked with the
banks who provide us with our own liquidity funding as well, to see whether that would affect
our interest rates. So we have done a considerable amount of research on this, but we were not
going to take it further, incur external costs, without having at least a measure of comfort that in
principle the project was supported by this Hon. Court.
Moving on to the Hon. Member for West Douglas, Mr Thomas, he, like others, wanted
details. But I have explained, this is agreement in principle, nothing more than that, to enable us
to take the next step down the road.
He was pointing out, quite rightly, that we are going to borrow at the most expensive part of
the yield curve and he was suggesting that we borrow on a 50- or 60-year term. We would have
to have a secondary market for that because, basically, whilst there are projections that people
born now will live to 120, I do not think people who have the money to invest are going to see a
60- or 50-year term out. I think, really, what we need to do is just have a look at a secondary
market, but I have had an approach from a market maker who would be prepared in principle to
make a secondary market, but that is not the issue at the moment.
The Hon. Member for Onchan, Mr Karran, said do the work first. Well actually, as my hon.
friend, the Member for Rushen, Mr Watterson, said, what we are trying to do is we are trying to
involve you in the decision; we are trying to work forward with you, to move forward with you.
We have been criticised in the past for coming back with a fully worked up scheme, and you
can see the hackles on the back of the Hon. Members’ necks rise, Madam President, ‘We are
being taken for a ride, we are being taken for granted, we are being presented with a fait
accompli.’ But, and but again, when we actually try to do it on an incremental basis, then we
have not got enough detail! What do you want, Hon. Members? Do you want us to bring you
along or do you want us to say, ‘That’s it take it or leave it’? Your choice, nothing more than
that.
There was another comment too, in general, that we should have a larger bond. My hon.
friend, the Member for Middle, Mr Quayle, has just pointed out that Guernsey are doing a
£250 million bond, and I do remember that Jersey did a much bigger bond, about six months
ago. The trouble is with these big bonds, which are in effect tradeable on the London market,
they tend to be for the institutional investor. There are two difficulties with that: the first is that
the minimum investment in one case was £200,000, and in the other case was £100,000. What
we are looking for is the retail investor, the local investor. (A Member: Hear, hear.) And the
other thing is, too, that the interest paid to institutional investors goes off the Island, goes off
tax free, and that is the last we see of it, so it does not support our economy, the interest paid.
What we are giving here is an opportunity for local investors to support the local economy.
And from our point of view it helps – as the Hon. Member for Council said – to keep the overall
costs of issuing the bond down.
The Hon. Member, Mr Peake, was not supportive, we should not be borrowing but … that
was the impression I got from you contribution, sir, and if I took it wrong, I apologise.
Nevertheless, I think this is a good opportunity to provide a facility for local investors, help
our liquidity and it is a pragmatic solution. It is not essential; I have made that abundantly clear.
Our backs are not against the wall, we do not need this money.
I would like to thank the Hon. Member for Rushen, Mr Watterson, for his support and once
again point out and reiterate it is an opportunity for local investors to invest in the Isle of Man,
and to invest in their own futures as well.
My colleague in Treasury, the Hon. Member for the Legislative Council, Mr Anderson, pointed
out it has been well trailed. It has. It was trailed in the Budget and it does provide, it helps to
deal with the fewer investment opportunities. In fact I had a potential investor on the phone last
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night asking when would this go ahead, what were we doing because they feel that with the
number of deposit taking institutions reducing, the number of opportunities are reducing as
well. And as the Hon. Member for Council, Mr Coleman said, it helps to spread the risk, the
investment risk as well, from the investors’ opportunities.
Everything that we are doing here will require specific Tynwald approval. This is to enable us
to take the next step. I think, really, we will come back with full details, as Mr Coleman said, we
will come back with details of the cost of administration, the rates, and also investigate whether
we can get a third party market maker in as well to create a market in it.
I would like to thank the Hon. Member for Peel, Mr Harmer, who was supportive in principle,
and I would like to give him an assurance that this is not a blank cheque, far from it. This is just
the next step on the road.
So, Hon. Members, please let us take the next step on the road. If you do not want to do it,
that is fine, I am not going to die in a ditch. With that, Madam President, I would like to move
the motion standing in my name.
Mrs Beecroft: Point of clarification, Madam President, if I may.
When we vote we are actually voting for what is on the Order Paper, aren’t we?
The President: Yes.
4885
Mrs Beecroft: Thank you.
The President: The motion before the Court stands at Item 10 on your Order Paper. Those in
favour, please say aye; against, no. The ayes have it.
A division was called for and electronic voting resulted as follows:
In the Keys – Ayes 19, Noes 3
FOR
Mr Bell
Mr Cregeen
Mr Gawne
Mr Hall
Mr Harmer
Mr Joughin
Mr Malarkey
Mr Peake
Mr Quayle
Mr Quirk
Mr Robertshaw
Mr Ronan
Mr Shimmin
Mr Singer
Mr Skelly
Mr Teare
The Speaker
Mr Thomas
Mr Watterson
AGAINST
Mrs Beecroft
Mr Cannan
Mr Karran
The Speaker: Madam President, in the Keys, 19 for, 3 against.
In the Council – Ayes 9, Noes 0
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FOR
Mr Anderson
Mr Coleman
Mr Corkish
Mr Cretney
Mr Crookall
Mr Henderson
The Lord Bishop
Mr Turner
Mr Wild
4890
AGAINST
None
The President: In the Council 9 votes for, no votes against. The motion therefore carries,
Hon. Members.
11. Public Sector Pension Schemes –
Report on Revised Proposals –
Debate commenced
The Vice-Chairman of the Public Sector Pensions Authority (Mr Shimmin) to move:
That Tynwald:
(a) Receives the report of the Public Sector Pensions Authority entitled Fairness and
Sustainability of Public Sector Pension Schemes – Revised Proposals [GD No 2016/0033];
(b) Endorses the proposals for reform of the Government Unified Scheme through the
adoption of a cost envelope approach as recommended by the PSPA’s Technical Advisory
Group (parts 4.1 and 4.2 of the report);
(c) Endorses the proposals for reform of the Tynwald Members Scheme (part 5.1 of the
report);
(d) Endorses the continued process for negotiating reforms of the Teachers and Police
Schemes with a view to consulting on detailed scheme changes and thereafter, preparing
formal amendments to be laid before Tynwald for approval (parts 5.2 and 5.3 of the report);
(e) Requests the PSPA to commence reform negotiations with members of the Judicial Pension
Scheme once the outcome of the UK judicial review is known (part 5.4 of the report);
(f) Requests the Public Sector Pensions Authority to consult on detailed scheme changes with
a view to formal amendments to all schemes being laid before Tynwald for approval by
February 2017; and
(g) Agrees that the options for managing the legacy position in the longer term will be subject
to further investigation by the PSPA and the Treasury in conjunction with Tynwald Members
and a further report will be submitted to Tynwald for consideration after the General Election.
The President: We move on now to Item 11, the Public Sector Pension Reforms Report. I call
on the Vice-Chairman of the Public Sector Pensions Authority, Mr Shimmin.
4895
The Vice-Chairman of the Public Sector Pensions Authority (Mr Shimmin): Thank you,
Madam President.
Initially, Madam President, would it be acceptable to the Court were we to, as was originally
intended, have each sentence or recommendation lettered (a) to (g) and to be voted upon
separately?
4900
The President: I am happy with that, if the Court is happy with that. The items are not
numbered or indicated in the printed motion. It would clarify matters if we consider them as (a)
to (g) or (1) to whatever, I will leave it with you, sir, as you proceed.
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And I understand you wish to move them all separately.
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The Vice-Chairman: Thank you, Madam President.
I will talk to the whole motion and then we would vote on them separately, but I believe
there are amendments coming, so we will see how the evening goes, Madam President.
(Laughter)
At the January 2014 sitting, Tynwald called upon the Public Sector Pensions Authority to
undertake a full and comprehensive valuation of the Government Unified Scheme and other
relevant schemes including the Tynwald Members’ Pension Scheme and then with the Pensions
Working Group, to report to Tynwald by December 2014 on the feasibility of implementing
further cost-sharing and other measures to reduce the long-term liabilities and to provide for
sustainable and fair public sector pension schemes.
At the December 2014 sitting the report was considered. At that time Tynwald noted the
report and further called upon the PSPA to consult on the proposed reforms, to have the
actuarial figures independently verified and to negotiate with staff sides if reforms were
required. Madam President, this was the instruction of Tynwald to which the later reports refer.
At the July 2015 sitting of Tynwald, it was further resolved that the PSPA should conclude the
consultation and negotiation process by 31st December 2015 and submit final proposals to
Tynwald for approval in February 2016.
The PSPA’s report was submitted to the Council of Ministers at the end of January 2016.
Whilst Council was relatively satisfied with the findings of the report in relation to sustainability
of current schemes for existing members, it decided that further work was required to examine
the options for managing the legacy funding issues which were associated with public sector
pensions. Council noted that the cost of funding public sector pensions was due to rise
substantially in the coming years. And whilst the reforms proposed by the PSPA would aim to
bring about long-term sustainability for future service costs, it was noted that they would not,
and could not, address the current and expected expenditure on benefits accrued to date by
current and former members of schemes, including existing pensioners.
Since then, Madam President, an enormous amount of work has been undertaken. In the
intervening period we have updated Hon. Members on the issues and options and listened to
the views on how sustainability reforms should or could be progressed. Presentations have also
been undertaken with the general public and the Chamber of Commerce to listen to wider
views. It has, however, become apparent that the legacy funding issue is the most difficult part
of the reform process to get to grips with and that to some extent, this has hindered the move
towards making the sustainable changes to the unified scheme that are required now to stem
the bleeding.
Therefore today, Madam President, only the PSPA report entitled, ‘Fairness and Sustainability
of Public Sector Pension Schemes – Revised Proposals’ is under consideration.
The legacy funding issue has been removed from the debate until further work has been
undertaken by the PSPA and Treasury, in conjunction with Hon. Members, to further consider in
more detail the options that have already been discussed.
It has been difficult to be able to explain to the general public that the position we are in has
built up right from the inception of our schemes in the 1960s. Like most jurisdictions which
operate pay-as-you-go pension schemes, we chose to put money into developing the economy
and the Island’s infrastructure at a time when no one anticipated how significantly the pensions
landscape would change. The position was greatly exacerbated in the 1990s with the growth of
the public service and provision of higher wages, which attracted more people into public
service on very good pensions. Many of these people have now had long careers and are about
to retire on their very good pensions which will continue to be paid for many more years than
was ever expected. Therefore a problem which built up over many years will be impossible to
resolve overnight. There is no single change that we can make now which would address the
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problems created over the last 50 years. So we need to consider how to resolve the issue in two
distinct parts:
Firstly, how do we make our schemes sustainable going forward? The proposals provided in
the PSPA report have been drawn up with the full input by the trade unions’ UK pensions
specialists and therefore have the support of the majority of the Island’s trade unions.
Both the proposals and the methodology around the actuarial work in the PSPA report have
been verified by an independent actuary well versed in UK public sector pensions change. His
considered opinion is that the methodology is sound and that the proposals are fair, reasonable
and justifiable.
The proposals involve a further increase in member contributions of 2.5% of pay, taking the
average contribution for our current members to over 10% of pay. This is an average 35%
increase in contributions for some and a 50% increase for many. The proposals also involve a
reduction in future benefits of the order of 6% carrying through to a reduced cost envelope, or
cost ceiling, of 26.8% in the short-term and 22.5% in the long-term, when the current members
are fully replaced by new members. Employers will also now be required to pay a 15%
contribution towards pensions, rising in stages to 20%. This is how schemes are funded in the
private sector with explicit, budgeted employer contributions.
These recommendations for change should also be rolled out to those other schemes not
currently a part of GUS, for Tynwald Members, police, teachers and the judiciary. What this
means in practical terms is that the future cost of pensions will be adequately covered by the
levels of employee and employer contributions such that in around 40 years’ time, based on
current actuarial assumptions, the Unified Scheme and other schemes will be self-supporting, a
position we have always strived to achieve. Any changes in the meantime will be picked up by
the regular actuarial and cost sharing reviews undertaken by the PSPA which will occur every
three years. Therefore, a process of regular review, assessment and change where necessary is
in place to ensure our schemes be made sustainable long into the future.
Madam President, I hope that the Court will feel able to support the changes recommended
in the PSPA report at parts (b) to (f) of the motion.
Secondly, is how do we address the issue of the legacy funding gap – the difference between
contribution income and expenditure which has grown over many years? This is the subject of
further work by the PSPA and Treasury in conjunction with Members and a further report will be
submitted after the General Election, for the next administration to consider. Therefore it is my
hope that you could support the proposal at part (g) of the motion.
Madam President, the public sector pensions issue is one of the most significant issues facing
the Island. Given the report before you today, and the series of presentations and workshops
made to Members on the matter, I now hope you will see that there is no simple solution to the
problem.
We have to make changes for the future which seek to retain our current public servants,
attract new professionals to our Island but overall, achieve a position of true sustainability for
our pension schemes in the long-term.
Of course, Madam President, we cannot and should not ignore the legacy funding gap which
has built up over many years, and we will therefore continue to explore the various options to
manage the issue with a view to reporting back to Tynwald after the election in September. But
this delay should not stop from us from making the changes we know are needed to our current
schemes to make them sustainable on a long-term basis.
The reality is that future sustainability can only be achieved via the imposition of a cost
envelope and a process of ongoing monitoring in line with future cost-sharing reviews. The
recommendations for further reforms in the PSPA report are therefore another step in the
process of changes which started with the Unified Scheme and which are designed to achieve
future long-term sustainability.
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Madam President, I would like to thank my two immediate predecessors, the Member for
East Douglas, Mr Robertshaw and the Member for Michael, Mr Cannan, for the work they put in
on the Government Unified Scheme.
I would also like to, at this stage, thank a number of other people, because it is my duty to
stand here today, with the amount of work that has been put in over the last 18 months. It has
been one of the most challenging that I have experienced in 20 years in politics. I am enormously
grateful for Ian Murray and his team at the PSPA, and to Jon Callister and the Technical Advisory
Group (TAG) team; the PSPA board, especially the Chairman, Jerry Carter, who is currently
incapacitated and we send him our best wishes; the sub-committee reps from the unions and
my co-chair Eric Holmes; latterly, the Treasury officers and the Cabinet Office; to the members
of the public and the media who have spent many hours talking and listening to this debate;
particularly to the members of the GUS schemes and our staff, past and present. They have
experienced an enormous amount of pressure and every one of the people that I speak to finds
that this is an issue that has been raised with them on a regular basis by family, friends and
people outside of service.
Madam President, there is only one body of people that can vote today and that is the
Members of Tynwald. I am enormously grateful for the amount of time and effort all of you
Members have put in to try and get your heads around what is a very complex issue, which I
have spent 18 months trying to understand. We have professional advice, we have independent
assessment. I believe that what is put forward to you today will stem the bleeding of an issue
that will be with us for decades, and to fail to take that action today, I believe would be a
mistake. (A Member: Hear, hear.)
Madam President, I beg to move.
The President: The Hon. Member for Council, Mr Wild.
5030
Mr Wild: Thank you, Madam President.
I beg to second and reserve my remarks.
The President: The Hon. Member, Mr Cannan.
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Mr Cannan: Thank you, Madam President.
Perhaps I should start too by paying tribute to the Minister who has moved this, the ViceChairman of the Public Sector Pensions Authority, Mr Shimmin, because he too has put in a
considerable amount of work over the last couple of years. Knowing from experience how
arduous and how long negotiations with the unions and other interested parties can be, I do
accept that he has made a tremendous effort to bring forward all these proposals today, as have
the staff that he has been working with.
But unfortunately, Madam President, we have ended up, I think, going down the route – and
a very dangerous route at that – that, I am afraid, treats the public sector pensions issue in
isolation, without a proper consideration of the impact on public services and public finances.
If we just look at where we were two months ago, on 19th April: we know that the public
sector pensions motion was deferred and a news release was issued at the time:
A motion on reform of public sector pensions … has been deferred until the June sitting to allow Members more
time to consider the issues.
[John Shimmin MHK] vice chair of the Public Sector Pensions Authority, explained: 'It has become apparent that
some Members are uncomfortable with Government's proposals to address the sustainability of the Island's
public sector pension schemes.
'Deferring the matter until the June sitting of Tynwald will allow further opportunities, on top of the extensive
discussions that have already taken place, for Members to clarify their concerns and any additional or alternative
approaches they may have.'
Mr Shimmin added: 'This is a huge and difficult issue – the most important domestic challenge facing our Island –
and it is essential that we move forward on the basis of clarity and consensus across the Tynwald Membership.'
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Madam President, I cannot fault the lack of trying from the Minister and from the Council of
Ministers, to try and sway me and others on this issue. Unfortunately you have heard, but you
have not listened to the concerns that I and others have been raising, and I am afraid that the
motion before us today changes very little from the motion that was, in fact, before us in April.
The Treasury Minister has just questioned whether we want to be brought along, or do we
want to take it or leave it; and given the fact that the motion has hardly changed in two months,
I would suggest that we are being told to take it or leave it here when we talk about public
sector pensions reform.
The motion has been split into five … sorry, six different parts – (a), (b), (c), (d), (e), (f) and
(g) – seven. (Interjections)
Mr Watterson: That’s the Treasury job gone!
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Mr Cannan: Seven different parts.
But what I am going to say to you now, today, is that you should not be fooled by this
because in many ways the majority of this motion hinges on part (b), endorsing the proposals of
the cost envelope approach – that is the fundamental part of the motion, that seeks to isolate
part of the problem and leave the other part of the problem to be managed at a later date.
If you accept that part, then you are basically accepting that public finances will have to deal
with a significant challenge in terms of meeting £60 million of additional financing by the end of
the next parliamentary term; because that is what we are doing – we are basically accepting one
part of it, we are shoving the other part off to the taxpayer, and we are basically saying the
liabilities are now the taxpayers’ problem. And that is it. We are going to wash our hands of it,
effectively, from this parliament's perspective and we are going to dump it on the next
Government.
Those Members who are standing for election and may be re-elected, will then have to
explain and justify to their constituents why they are supporting substantial cuts and changes to
Government services and to Government funding; because, in order to find that sort of money –
that £60 million – the Government is going to face a huge challenge on a deficit that, on top of a
deficit, already exists.
So I would urge Members to think very carefully about what they do today. It is a critical
decision and, if nothing else, I think we need to take a positive step in the right direction. We do
not just need to take a step, we need to take a positive step in the right direction and endorsing
that proposal at (b) will send us down one direction and one direction only – and that is the
taxpayer managing the liabilities on the revenue account.
Madam President, over recent weeks Members of Tynwald have received a stream of
consistent emails and letters from public sector workers and union representatives urging us to
accept and vote through the latest reform proposals. Many of these emails and letters have
used, at their heart, the leverage of recruitment and retention of staff as the critical factor for a
‘yes’ vote but, interestingly enough, almost none of those emails mentioned the cost to the
public purse, or indeed the implications of finding the money from the growing liabilities on
their own jobs or the services that are being provided.
Ironically, in pushing for Tynwald acceptance of these reforms, those very same people may
well end up having to face the consequences of severe cuts to public services, or alternatively
unsustainable rises in public taxes and charges.
In April, Madam President, Government withdrew its proposals – I think, almost facing
certain defeat in the Keys; and now they are back on the agenda, this time slightly amended so
that the proposals around the cost envelope – which basically alters employees’ terms to pay
more and receive less – are accepted, and that the proposals for managing the liabilities are
postponed until after the general election.
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So in my view, it changes absolutely nothing from where we were in April and, if anything, it
potentially makes the situation more complicated by accepting the proposals as they stand.
Let’s be clear: the next Government is already facing a budget deficit of around £75 million.
The current pension proposals add another £60 million to this problem over the period to 2022
which, in effect, would give the Government an estimated £135 million to find in savings over
the course of the next parliament. This is compounded by the fact that the available cash
reserves are running out and will be depleted within the next four years if no action is taken to
address the deficit.
Looking at the public sector pensions bill in isolation, the liabilities have soared from
£1 billion in £2007 to £3 billion in 2016. The revenue cost to the taxpayer has risen year on year
and will rise, as outlined in these proposals, from £40 million to £100 million by 2022, due to the
depletion of the Public Sector Pensions Reserve.
So the net impact of finding £135 million of savings will be significant, although ameliorated a
little by potential economic growth; but the problem is not one that ceases, because pension
liabilities continue to grow after 2022.
Let’s put £135 million in context: it is just shy of half the annual salary bill for the Isle of Man
Government workforce of 7,000 people, or a net cost to the Island of around £3,000 per
household. And no one, to date, has any explanation how this is going to be afforded – except
assertions that economic growth will be a major contributor to paying for this huge bill.
I would argue that economic growth alone cannot be relied upon to solve our problems and,
quite frankly, it is irresponsible to place the fate of public finances and public services on this
one outcome. Plus, it could be interpreted that the message is that the private sector should do
all the work to grow the economy and the public sector should get all the rewards to pay
pensions. I do not think so, because we need the money from economic growth to pay for our
growing costs in healthcare, our growing costs in education, our growing costs of infrastructure
– and, of course, to protect the jobs of those very people who are urging us to accept the motion
today and to vote for that cost envelope.
I am deeply concerned, Madam President, that the scale of the problem will mean the Isle of
Man will not be able to afford to run via health and educational services, let alone deliver the
spectrum of other essential services that we have available, without raising taxes or making
unsustainable cuts to jobs and services. Not only that, but we do not actually have the final
details of the cost envelope; but, in outline, what we have been informed is that the pension
scheme will be reviewed every three years and that, if necessary, terms for employees will
change as liabilities change.
Now, the taxpayer does seem somewhat protected from the figures that we have been given,
but I will be surprised if younger members of the workforce in any case accept the terms that
their pensions will be reviewed every three years, and that possibly they may be asked to
contribute more every three years and work for longer.
This type of scheme may not be so applicable for older workers and senior union officials, but
there is a significant danger that contribution rates and retirement ages, being subject to change
and review every three years, will ultimately lead to increased workforce uncertainty and
possibly even industrial unrest. To me, it smacks of desperation and that we potentially may end
up creating a two-tier workforce and we might even end up making the situation worse.
Madam President, I think the Minister himself, in moving this, has mentioned the private
sector and of course we know that the private sector has now, effectively, closed these schemes
to new entrants. This solution has been implemented across the private sector and I think must
be something that should be supported in the public sector if we are going to get any finality to
this problem.
KPMG reported in 2015 that only five FTSE 100 companies had a defined benefit scheme
open to new entrants, but there were no schemes providing a guaranteed pension based on
final salary open to new entrants. I do not understand why any Government, particularly one as
small and financially restricted as the Isle of Man Government, can consider that public sector
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final salary schemes are any more sustainable than those in the private sector – even with
solutions like the cost envelope being put in front of us today.
In the UK, the cost of public sector pensions has jumped by hundreds of billions of pounds in
just four years. Bear in mind it was only five or six years ago that the public sector pensions
report from Lord Hutton actually appeared and that, too, promoted a number of significant
changes including career averages and trying to move staff on to a similar solution. But in the
intervening period since those recommendations were received – and some implemented – the
liabilities rose from £961 billion to £1,500 billion between 2010 and 2015.
‘A dangerously unsustainable position’, said the chief executive of the Chartered Institute of
Public Finance and Accountancy, who also said that without reform the system would collapse in
decades to come.
Madam President, the problem that we are facing here today is that the pensions issue has
been taken in isolation. Look back at what the motion said in April and you see there what was
paragraph (h), which said:
Notes that the Medium Term Financial Strategy has identified that the Public Sector Pension Reserve will soon be
depleted and by controlling expenditure on public services, Treasury has accommodated the legacy funding
requirements within the revenue account
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To me, and to others, what we are saying is that funding public sector pensions has become
the absolute focus here and everything else has been built around that; and that is not an
acceptable situation. What we must do is take our responsibilities as a government to look at
the whole, to look at our priorities, to look at the actual delivery and funding of public services
first, and then we build in on top of that what our requirements are in terms of meeting the
pension liabilities.
Pension liabilities do not dictate how we run our budgets; we run our budgets and they
dictate how we manage the pension liabilities. I think we are in danger of letting the pensions
liabilities overtake us.
So, Madam President, what I have done today is, I have brought forward a series of
amendments under Item 11 and I am just going to run through that with you because I think
what these amendments are going to do is help us take the next positive step down the road in
order for us to reach a proper conclusion here. As it stands at the moment my intuition, my
feeling, is that dumping the liabilities like this, cutting them off and just chucking them on to the
taxpayer will not be an appropriate solution; does not demonstrate good financial management
from the Government to the taxpayer; does not demonstrate to the taxpayer that the
Government has looked first and foremost at the services that are being provided; how the
budgets for that are being managed; what we have done to manage the public sector pensions
liabilities; and how that is reflected overall in terms of how their money is being spent.
If we go down this route we are setting ourselves up for a very dangerous situation where we
will be telling the taxpayer that we are making cuts to their services, cuts to budgets and cuts to
jobs – to fund pensions. That is how we have set out the course today, by just dismantling and
cutting the problem in half and saying, ‘Well, don't worry about the old liabilities that we have
built up, the taxpayer can look after those; but heigh-ho, look, we have got a manageable
scheme going forward.’
I do not think that is going to be acceptable and I think it is going to cause huge problems.
The amendment that I have brought forward effectively leaves section (a) as the Minister has
asked us to vote on it, as it was; but I have added the Legacy Funding Gap Report because I think
it is absolutely important that Members today accept the argument that we treat this as a whole
and not in isolation. We should not just accept the report entitled Fairness and Sustainability, we
must also accept the report around the legacy funding gap as well, if we are going to truly take
this and start to treat this as a whole rather than in isolation.
Paragraph (b) disappears. I am suggesting we do not support the cost envelope approach;
that we do not even go down that route because that is setting us straight up into a massive
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liability problem without considering the whole problem of what the Government is going to be
delivering over the next five, or even 10, years. I would urge Members not to vote for (b) today –
irrespective of whether you support my motion – do not support paragraph (b) because, if you
do, you have automatically put those liabilities on to the revenue account for us to sort out, and
the consequences of doing so are going to be significant.
We have endorsed the reform of the Tynwald Members’ Scheme and we have endorsed the
process for negotiating reforms of the Teachers’ and Police Schemes. We have asked the PSPA
to commence reform negotiations with members for the Judicial Pension Scheme. So we have
supported (c), (d) and (e) in the Government's motion.
Now we come to the crunch. What we say here is:
That Tynwald:
Acknowledges the expectation of meeting public liabilities to current and former members of the workforce, but
notes that the Medium Term Financial Strategy has identified that the Public Sector Pension Reserve will soon be
depleted and considers the reports as failing to recognise the potential detrimental impact to public services and
public finances of the proposals
5210
In other words, Madam President, those reports took the pensions situation in isolation and
failed to deliver for Tynwald the recognition and understanding of what detrimental impact to
public services and public finances would result from that legacy situation – a legacy situation
that you are going to support if you vote through the cost envelope proposals.
The next paragraph states:
That Tynwald:
Requests therefore that the options for managing the liabilities and future funding of Public Sector Pensions be
subject to assessment and scrutiny by a professional advisory firm of standing and recognition, who should
consider the future of Public Sector Pensions, by taking into account our obligations to provide public services and
related spending commitments, that in doing so evidence be taken from any interested party and that
recommended options for change be reported by November 2016
5215
Madam President, what we are not asking for here is another actuarial report. What we are
asking for is that a professional advisory firm, with experience, is appointed to assess, scrutinise
and take evidence from interested parties as to the current situation and the future financing of
public sector pensions, and to deliver an informed set of recommendations that we can act on.
Then the next paragraph is:
That detailed government revenue and expenditure plans are required before any changes to the public sector
schemes can be considered and agreed
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And that really encompasses the key part of why this is even happening, because we do not
know or understand what we are about to let ourselves in for by just accepting the liabilities as
proposed. We need to properly explain to the public what the implications will be on services,
what the implications may be for revenue raising, what the implications may be on jobs – and
we need to do that as a whole and not in isolation.
And, of course, that paragraph will necessarily complement and move on from the
recommendations that are brought forward – or will be part of those recommendations.
Finally, Madam President, the concluding paragraph in this set of amendments says that:
… in the interim period and until matters are concluded, the Employers contribution to meeting Pension liabilities
from revenue is limited to 15% of the Public Sector Salary Bill with the funding gap being met from the Public
Sector Pension Reserve.
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In other words, we are going to put pressure on ourselves, on Tynwald, to perform to reach a
conclusion on this, because what we are saying to the taxpayer – and to the unions and to the
staff – is that we reasonably think that we should meet 15% of pension costs from the salary bill.
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So 15% of the public sector salary bill should be met from revenue and the rest should be met
from the reserve.
Clearly, if we have got a salary bill of £300 million, then we are expecting to pay out
£45 million fixed, until this problem has actually resolved and we have reached some proper
conclusions. I suggest to the Hon. Court that that is good financial management to put in a
paragraph like that.
So that is really all I have to say, Madam President. Of course I have my own ideas – strong
ideas as many of you have read about – that the scheme should be closed to new entrants, that
we should put in career average calculations, that we should cap lump sums and that we should
cap the salary calculation applicable to pensions for certain jobs of £75,000, or whatever people
see fit.
But don’t believe me, let’s put this now to the next positive step forward; let’s put it to a
professional advisory firm and give them the evidence. We do not need any more actuarial
calculations; we have got all the facts and figures in terms of the costs and other information.
We need this put to the professional advisory firm, we need the recommendations and we need
a proper financial plan that the public can have confidence in and which demonstrates to the
taxpayer that we have taken a sustainable and fair – a sustainable and fair – approach to dealing
with this problem.
To me, if we vote through the cost envelope, which is the critical element of today's vote, you
have told the taxpayer they are getting the liabilities no matter what – and that is unacceptable.
I beg to move.
Amendment
To leave out all the words after ‘Fairness and Sustainability of Public Sector Pension Schemes’
and insert the words ‘and the report entitled Public Sector Pensions Addressing the Legacy
Funding Gap;
Endorses the proposals for reform of the Tynwald Members Scheme (part 5.1 of the report);
Endorses the continued process for negotiating reforms of the Teachers and Police Schemes
with a view to consulting on detailed scheme changes and thereafter, preparing formal
amendments to be laid before Tynwald for approval (parts 5.2 and 5.3 of the report);
Requests the PSPA to commence reform negotiations with members of the Judicial Pension
Scheme once the outcome of the UK judicial review is known (part 5.4 of the report);
Acknowledges the expectation of meeting public liabilities to current and former members of
the workforce, but notes that the Medium-Term Financial Strategy has identified that the
Public Sector Pension Reserve will soon be depleted and considers the reports as failing to
recognise the potential detrimental impact to public services and public finances of the
proposals;
Requests therefore that the options for managing the liabilities and future funding of Public
Sector Pensions be subject to assessment and scrutiny by a professional advisory firm of
standing and recognition, who should consider the future of Public Sector Pensions, by taking
into account our obligations to provide public services and related spending commitments,
that in doing so evidence be taken from any interested party and that recommended options
for change be reported by November 2016;
That detailed government revenue and expenditure plans are required before any changes to
the public sector pension schemes can be considered and agreed;
And that in the interim period and until matters are concluded, the Employers’ contribution to
meeting pension liabilities from revenue is limited to 15% of the Public Sector Salary Bill with
the funding gap being met from the Public Sector Pension Reserve.’
The President: The Hon. Member for Douglas North, Mr Peake.
Mr Peake: Thank you, Madam President.
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I would like to second this amendment.
This pension is too good – that is what Members were told in March. And what has happened
since the proposed debate in April?
We have not seen any sustainable solutions presented to Members, although I have taken
the time to listen to Government employees. I have sought expert advice locally and the opinion
of the local business community. I believe that over 70% of businesses who took part in the
Chamber of Commerce consultation said that the number one issue facing the Island was this
pension issue. Similarly, Treasury states this is placing a significant amount of pressure on
Government’s finances and this represents the single largest risk to sustainability.
So why are we not looking at the sustainable solutions so we can make a decision? This year,
public sector pensions’ expenditure will be £107 million – that is 10% of our total revenue
spending. If we are not careful we will be an organisation centred around providing a pension
rather than public services.
The taxpayer is presently funding £89 million towards the pension – the same as the budget
for Noble's Hospital; within 19 years the predicted £155 million is like the taxpayer paying for
almost two Noble's Hospitals.
How many warnings do we need?
We have to confront reality and make tough decisions; what is the fairest and most
sustainable for the Isle of Man? This has to be our priority; it is our responsibility. Kicking it down
the road with a decision on a small percentage of the problem is no longer good enough. It is
worse than no decision; it is not even half an answer.
The figures produced by the Pension department are based on the same size of
Government – and this concerns me. We are meant to be working towards a smaller, smarter
Government, embracing technology and benefiting from efficiencies and effectiveness – which is
one of the reasons why the proposal is worse than no decision. Pressure to make a bad decision
only leads to a bad decision.
This is what is keeping me up at night: how can we attract businesses and entrepreneurs
when creating the very conditions needed to grow the economy, when it is being overshadowed
by an inability to find a sustainable solution? Government wants the economy to pay for the tax
rises, yet is not giving out the right message. It may acknowledge the size of the problem but it
has failed to present a sustainable solution alongside other proposals.
Madam President, this is the issue I have with this motion. The public will be continuing to
underwrite and pay for a pension which is too good; and if local businesses are not encouraged
or allowed to grow enough to pay for that annual rise in Treasury taxation receipts, this will
require more from general revenue, leading to higher taxation.
Therefore I support the amendment, which includes options for managing the liabilities.
Future funding of the public sector pensions would be subject to further assessment and
scrutiny by a professional firm of standing and recognition. A report with recommendations will
be back to us by the end of the year, so we can make a decision. If that professional firm comes
back with a solution that shows you what hell looks like, alongside a range of other solutions,
then at least Members will be in a position to make an informed decision and begin that road to
sustainability.
The Public Sector Pension Reserve Account presently stands at around £180 million and is
due to be exhausted in about five years at the current rate of withdrawal. I believe that in the
interim period and until matters are concluded, the employers’ contribution to meeting the
pension liabilities from the revenue is limited to that 15% of the public sector salary bill, with the
funding gap being met by the Public Sector Pension Reserve. This will focus the mind on finding
a solution.
The decision we face is not just for present stakeholders of the Public Sector Pension but it is
for our future generations, for our health, our social care and education services; and this is why
I am seconding the amendment.
Thank you.
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The President: Hon. Member of Council, Mr Henderson.
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Mr Henderson: Gura mie eu, Eaghtyrane.
I have listened to the initial submissions to this debate with what can only be described as
incredulous disbelief, I am afraid. I would ask Hon. Members just to take a steely nerve here
when we are discussing this very important situation. Do not be scared off by the shroudwaving; look at the detail that has been presented on your Order Papers by way of the main
motion; take stock of what the Hon. Member for West Douglas, Minister Shimmin, has put to
you in his opening gambit; and reflect on the situation we find ourselves in – which is almost an
urgent situation, where we have to address this issue in the best way possible.
It might not be the most perfect solution but it is certainly, to me, the best solution or the
most pragmatic solution that we can manage in these current times and within the timescale
that we have got.
This debate is exactly the same, to all intents and purposes, as we had in December 2014, if I
have got my dates correct, when a different Minister brought broadly similar proposals to this
Hon. Chamber and it caused an absolute uproar at that time. The staff sides were almost at
breaking point with it; my phone was certainly almost at breaking point with the calls I was
receiving; my email box was full, and so on, with panicked and worried public sector service
staff – and the hue and cry went up.
In the end, I took it upon myself to meet with that particular Minister at that time, advise him
of the situation and thought maybe withdraw the motion or at least try and amend it. I had
further behind-the-scenes conversations with other Ministers and Hon. Members and in the end
what I did was, as many of you will remember, I moved an amendment which was successful
and supported by nearly everybody, Eaghtyrane.
That did exactly what Mr Cannan, the Hon. Member for Michael, has just asked you all to do
all over again. I asked this Hon. Court to back me in a move that would allow for further
consultation to take place, engage all the unions involved with the public service sector staff,
and it compelled the Government side to allow the unions – or the staff sides and professional
bodies – to appoint their own professional advice, their own independent adviser, to look at the
figures as presented to us from the debate and either validate them, kick them into the long
grass or say they were rubbish. In essence, what my amendment did, Hon. Members, are the
main planks of what you are being asked to vote on via an amendment here tonight.
I spent some considerable effort in constructing that, as has the Hon. Member for Michael,
no doubt, in the past few weeks in progressing this here. We have both recognised the urgency
of the situation and the gravity of the situation, except kicking it further into the long grass now,
after I kicked it into the long grass for over 12 months to have the very same effect as the Hon.
Member is now requesting, I think will not do us any good. It will do us a great disservice and it
is only going to magnify the issue that is now well within our sight. It is not just on the horizon, it
is coming forward off the horizon right at us. I think we need to just be a little realistic here in
what we are trying to do.
The cost envelope model as part of the solution, I think has a good chance of working. It has
been independently assessed and by independent professionals who not only just give you facts
and figures, they have given us a whole lot more and I am sure the Hon. Minister, Mr Shimmin,
will reiterate that when he sums up.
This holding back for another six months to get further advice on top of the independent
advice we have already had is a ruse in a way. I think there is an element of panic in here when
what is being proposed is a considered, pragmatic way forward to try and manage an element of
this situation.
I have to say that I have always looked at this particular problem as two parallel issues: there
is the immediate issue which the cost envelope model proposes to address; then there is the
legacy issue which I note is now not forming part of this motion – fair enough to the Minister
and fair enough because it says there is going to be further consideration into that and it is going
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to have to be brought back. But, Eaghtyrane, I can assure Hon. Members that whatever we do,
there is going to be an impact on the taxpayer to try and sort this out and manage our way
through the situation; there is no doubt about that. Whichever model you pick, whichever
avenue you go down, whichever amendment you wish to follow, there is a cost issue at the end
of it and it is trying to find the best pragmatic approach through this and in a considered,
measured way rather than ultimately ending up with making urgent measures to try and solve
the situation. The last thing we want to do is get to a position where we have to take urgent
measures to try and resolve the situation, such as that which happened in the Republic of
Ireland and maybe one or two other places.
Eaghtyrane, we have been round this debate in December 2014; all the arguments were put
then, or similar, and it has been professionally assessed. That is the message I want to get out
tonight: we have had that.
Also, Eaghtyrane, of paramount importance is the fact that the effect of my amendment at
that time: not only delaying the whole operation for over 12 months, it also caused the
Technical Advisory Group to be set up – which was one of the things that was concerning
Members at the time of the launch of the original motion. The Technical Advisory Group involves
all staff sides in unison with the management side, working up an agreed technical way forward
to try and solve some of the issues and certainly the short-term issue.
It was them that generated the cost envelope initiative, or agreed it, in consultation and
input from independent professional advice, not only from the staff-side-picked independent
professional device, but also the members of the Technical Advisory Group themselves who
were being advised by their own actuarial experts from their own staff sides: people brought in
to advise them, and that included the BMA in that also.
That is what drove the cost envelope to be here on our desks tonight, Eaghtyrane. It is not
something Minister Shimmin has plucked out of the air – or the Pensions Authority. This has
been carefully and painstakingly worked up; the numbers crunched and all the rest of it. To say it
has not received the review and assessment it should have done, or not enough of, I think is
disingenuous, Eaghtyrane, when a huge and enormous amount of work has gone into this to get
us here to this point tonight, where at least – whether the Hon. Member for North Douglas likes
it or not – we might get half a decision on half of it, which to me is a lot better position to be in
than what we were a couple of hours ago. At least we have got a platform to move forward on
that bit.
Hopefully, the Hon. Member for West Douglas will come back with some further news next
month that we can work on that bit as well. I agree that is critical as well and it is an extremely
difficult situation to try and grapple with and resolve one way or another, and ultimately it is still
going to impact on the taxpayer in some shape, form or other.
Eaghtyrane, I would say this to the Hon. Member for Michael: what I will be telling people, if
this motion is successful tonight, and what I would urge Hon. Members to tell their constituents
on the doorstep, is that we took a pragmatic sensible way forward in trying to resolve the issue
that it has been going on for too long and this is the time really that we have to have the
strength and say, ‘Right, we have got something here; it is workable; we will try and initiate it
and see where we go with it.’ I think people will be more accepting of that than if we just walk
away tonight and they know it is buried in the long grass until November.
I can also say to Hon. Members that I met with Eric Holmes of Unite the other week in special
reference to this issue and, as far as he is concerned and as far as Unite members are concerned,
this is worth going for because at least you get something back out of it at the end – to put it
bluntly – and that something is there and it addresses some of the situation.
I would ask Hon. Members to think very carefully about what is being promoted and just go
on what is being presented, and I would strongly urge you to support as a part one initiative. You
are not being tied into all these other terrible scenarios that are going to befall the Isle of Man; I
do not see it like that. From the information I have had and the meetings I have had with
Mr Callister himself and others and the BMA, I see this as it may not be a perfect solution, but it
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is a better way forward and it gives us some sort of answer to this conundrum that we have
found ourselves in.
Eaghtyrane, I would urge Hon. Members to think very carefully. Do not become confused
with the issues being tangled up; look at what is on the Order Paper; remember the information
that we have been circulated with previously from other briefings, and I think that is the way to
go.
Gura mie eu.
The President: The Hon. Member, Mr Robertshaw.
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Mr Robertshaw: Thank you, Madam President.
I am not sure, when I was listening to Mr Henderson, the Member for Council, whether I was
listening to somebody with a singularly union background or somebody who was actually a
Member of Treasury, because the fact that those of us who have deep concerns about this are
somehow ‘shroud-waving’ I find absolutely astonishing from a Member of Treasury.
Mr Henderson, Madam President, has tried to get this Hon. Court to focus just on the
pension issue. That is wrong; that is completely wrong.
I want to take Hon. Members a few steps back to the important step forward that the
Treasury Minister himself introduced at the last Budget, which is the medium-term financial – he
now accepts a ‘forecast’ rather than a ‘strategy’. Looking back at that from this position, more
and more, that forecast seemed intent on trying to assemble a set of numbers which justified
the current or the future cost of public sector pensions. It was an optimistic forecast on the
revenue side and I have to say to Hon. Members it was extraordinarily optimistic on the cost
side.
Let us just go back a few hours to when the Minister for Health and Social Care was on his
feet: how he said to us that he had overspent this year by £9 million and that actually it is
something that Health has almost continuously done now for a long period of time. I remind
Members of the parallel situation in the UK – I think I have probably said this before – where just
before the last election, the head of the health service in the UK was saying, ‘Actually, there was
going to be a shortfall of £16 billion that we have got to find.’ And the politicians shushed it
down and all declared that they would go for an additional £8 million.
The fact of the matter is that Health and Social Care, if we are going to deliver the services to
the people of the Isle of Man in the coming years, is going to go one way. However much the
Minister – whoever that is – of that very, very important Department works extremely hard with
the Members of that Department to keep costs down and find other ways of finding income, it is
going to be a significant increase in cost for both those areas. We know why, so I will not visit
the reasons why that is the case, because I think we understand that.
If you accept that principle as being correct, factor that into the medium-term financial
forecast and it starts to fall apart, literally in front of your eyes. You do not have to be a financier
or an accountant to realise that, once you start breaking down those cost forecasts, you have
got big black holes starting to appear all over the place. The big black holes, once identified, are
actually currently hidden in the forecast because that is the only way you are going to pay for
the public sector pension spend as the fund runs out.
We are talking about a number of things here. We are talking about the rights of public
sector staff to have a decent pension. When the current Minister for Policy and Reform took up
the reins as Vice-Chair of the PSPA, his attitude was very much along the lines of
Mr Henderson’s, that is focusing on unions, and I started talking about the empty chair. To give
the Minister his due, he went a long way and presented us with the concept of the legacy cost
issue separate to the cost envelope.
At that stage, we asked for further delays because we wanted more information. We did not
want more information about pensions! We have got information about pensions way above
our heads – great credit to PSPA for all the tremendous work they have done. What we need to
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understand, what faces the next House, is how we deal with all these conflicting issues, and the
only way we can do it is to get an honest analysis of cost by Department. What is Social Care
going to cost us in the coming years, when you have got this significant increase in the elderly
population? What is the Health area going to cost us, with all these huge increases in demand:
for the elderly, for drugs, for huge increase in the number of services deliverable? They are all
escalations in cost.
All we asked for was supporting departmental analysis that supported the original mediumterm financial forecast, which we never received. So, actually, Madam President, what we are
being asked to do now is to decide an element of that, a very significant element, an element
which is going to increase costs during the next five or six years by millions and millions of
pounds and yet we are ignorant of all the other issues that sit there. We have got this bland
forecast which predicts a continued balance. I absolutely cannot accept that until I see the
numbers.
My big issue is not necessarily with the cost envelope. It is the fact that we have to see these
things – and a number of Members have touched upon it already – this issue of trying to deal
with things holistically. We seem, in this Hon. Court, in our Government, not to be able to do
this. We seem to be only able, as eloquently dealt with by Mr Henderson, to deal with things in
little boxes. Hon. Members, we have got to do an awful lot better than that in the near future
and the Members who want to be here in the next House have got to face that squarely right at
the beginning, not continue with this business of grabbing at incremental adjustments and, ‘Yes,
that is right.’ You have got to get the big picture and the big picture looks difficult. It is not
shroud-waving; it is facing the challenges before us honestly and openly. Only when you
understand what the problem is can you start to solve it.
That is what this amendment by the Member for Michael is trying to do. The concept of
bringing in an external, reputable body is not to look at pensions per se at all. It is to help
Government, because clearly it needs that help to get an analysis of departmental forecast costs
over the next five years. We have not had it and yet we have got the assembled figures, en
masse, in bulk, and we do not understand the breakdowns.
How much more is Health going to get by 2020? I do not know; I have not got a clue; nobody
has told me! How much additional costs are there going to be for the significant increase in
social care cost for the elderly in the next five years? I do not know; nobody has told me! Yet, I
am supposed to, as a responsible Member of this Court, as we all are, sign up to some
arrangement now on one element.
I finish with this: the teachers wrote to a number of us and said, ‘Where do you stand on
pensions? You are going to support our pensions.’ Apparently only three of us wrote back and
explained our situation. I was one of them. I said, ‘Like any reasonable person, I want to do the
very best I can for public sector workers with regard to their pensions, but unless we see’ – and
this was in my letter – ‘it holistically, then’ – I said to the head teachers – ‘you are going to be
writing back to whoever is in this Court in four or five years’ time saying, “We need more money
for education”’ And Health are going to be saying, ‘We need more money for Health’; and Social
Care are going to say, ‘We need more money for that’; and we are going to say, ‘We have not
got it, because we did not get it together in the first place and understand it holistically!’
What this amendment tries to do is to help Government to get the breakdown and forecasts
in more detail over the next five years so we can understand can we or can we not support these
public sector pension issues? It is quite wrong to deal with one bit now and then post the
difficult stuff that we cannot get after the election. Surely Hon. Members are not going to sign
up to that!
With that, Madam President, I strongly support the amendment as submitted to the Court by
the Member for Michael.
Thank you, Madam President.
The President: The Hon. Member for Ramsey, Mr Singer.
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Mr Singer: Thank you, Madam President.
The proposals before us from Government are actually adding little to the previous debate.
This urgency to accept the cost envelope approach in isolation, to me, just hamstrings the
development of a fully viable long-term solution. To be able to say, ‘We have done something’ is
not the object of this critical appraisal of the long-term pension viability in the public sector. The
cost envelope may or may not be the answer, but it has to be considered as only one possible
element of a complete package of identified proposals to ensure sustainability into the future,
so as to ensure that the legacy position is clear and the positon of present and past employees is
clear: that they receive a pension, but also that those who are going to be working for
Government in the future also receive a pension. The Government’s proposals do seem to say,
‘Let us accept something now and the long-term will be sorted later.’ That cannot be the
answer. Taking a decision in isolation, not knowing as much as we can as to what comes next is
irresponsible.
I have to disagree with my long-term friend, Mr Henderson. Nothing has been added since
the last debate. Mr Henderson seems, again, to be saying, ‘We must be doing something within
the timescale we have got.’ I am not sure what he means by ‘the timescale we have got’. Does
he mean we have got to do something before July so that there is something on the table for the
General Election? If that is not the case, then what is this timescale?
I also have to agree with the comments of the Hon. Member for Douglas East that
Mr Henderson, continually in his speech, referred to the unions. He did not once mention the
liabilities being placed on the taxpayers of this Island. (Interjection by Mr Henderson) Of course
the unions’ advisers will say what is best for the union: they pay for that advice. But this
amendment is calling for what is best for unions, yes, but also what is best for the taxpayer.
The report that Mr Henderson called for, I think, was an actuary’s report – this is the one he
was referring to – and that was actually kicking it into the long grass. We do not need another
actuary’s report. What we are asking for is a conclusive report based on the evidence. We have
to be as sure as possible that we can support the workforce long-term to ensure their future
pensions, not approach the problem piecemeal.
The Hon. Member for Michael, in the amendment, has set out a pathway. It is a long
pathway, but there is a good percentage chance that a viable solution will be reached, and
taking the workforce with us. The proposals on the Order Paper have ignored the questions
previously posed to the Government and the PSPA asking for many matters to be considered,
costed, put together as a whole package of measures. What this is doing is putting a plaster on
the cut, but a plaster does not stop heavy bleeding. The amendment sensibly limits the
employer’s contribution to meeting the liabilities from revenue whilst formulating Government’s
revenue and expenditure plans.
I fully support the amendment which calls for scrutiny by a professional advisory firm in
regard to the management of all our liabilities and future funding of the public sector pensions
which must take into account future Departments’ spending and affordability: facing facts that
the pension provision in the UK is a mess and that we are in desperate need of a solution that
will work. I hope Members will support the proposal to have an independent view of our
situation and consider any recommendations from that independent source to enable us to have
a reasoned and positive view of the way forward.
Thank you, Madam President.
The President: The Hon. Member for Malew and Santon, Mr Cregeen.
Mr Cregeen: Thank you, Madam President.
We attended a number of meetings. The unions were there; proposals were put forward. As
a union rep would you recommend this proposal to your members? The answer is ‘Yes’ because
it could be a lot worse. If you look at a pay negotiation, you go in and you look for what you are
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going to get out that is best for your members. That is their job: to see that they are going to get
the best deal for their members.
Previous changes were brought in and most of the members thought, ‘Well this is going to
last until 2020.’ So we are justifiably upset when told further changes were coming. Can we
honestly say no more changes for ten years? I do not think so.
Of course, some members of the Scheme will accept this change. If they have only a few
years left until their retirement, who of us would not? Your contributions are only going to be a
little bit more, but you are still going to protect what you have got, so of course you are going to
support it. The question is: is the Scheme sustainable? The answer is no.
In a meeting with the unions, I asked a representative of the BMA, would he support careeraverage pensions? The answer was no, they would fight us on it. Yet, in the UK they have careeraverage pensions across the NHS; they have career-average across teaching, yet we do not have
that here. We constantly get told that our pensions are a big issue on the Isle of Man, because, if
we do not do this, they will go back to the UK. Yet, they will not support the changes that are in
the UK, so it must be a good deal for those people paying in.
One of the other points that they put over was regarding a consultant. A consultant works for
many years. The last three years are the best earning they are going to get, so why would they
go for a career-average? How is that fair on the taxpayer and everybody else who has paid in? As
I mentioned in the previous debate on the pensions, the Institute of Fiscal Studies was saying
that a career-average is more sustainable. Now, the actuarial permutations of it, they got slightly
wrong in the UK and they made it over-generous, so it does not give them the benefit that they
thought they were going to have.
These studies regarding career-average: we have had no answers to them. We have been
told that these are going to be further down the line. Surely this should be part of what we are
actually looking for. We are looking for something sustainable.
If you approve the cost envelope, you should put a health warning on it and it will be saying,
‘We will be coming back for more – caution!’ We have to be honest with the members of the
pension scheme regarding the sustainability of this.
For all those Members who are going to go out knocking on doors, can you honestly say to
any of the public servants that this is going to be the final hit for you for the next ten years? We
cannot honestly say that we are not going to be coming back. Let’s be honest with them; let’s
have a proper think and give some sustainability to the pension scheme. The rest of the
taxpayers on the Isle of Man … As Mr Robertshaw said, the Department of Health, if they
suddenly have an outbreak of Bird Flu or something else – Ebola – how are they going to cope?
It might solve your pensions issue for a while! But the cost to the Isle of Man for these pensions
is going to be unsustainable.
I hope the Minister, in his reply, will actually give us a bit more information regarding where
you are up to on negotiating career-average; what the benefits are, because, from the
discussions, your officers did not want to discuss that sort of area of it. Now, whether they had
not looked at it properly … These are all areas that we should be looking at now.
I do not want this Court to be going back in three or four years, having the same fight over
and over again that we are having to change pensions because what we have put in place has
not been sustainable. If we do it properly, we may get more time out of it, and that is being
honest with the people of the Isle of Man, to say that we have to get this right. Making a
decision – and the pressures that people are saying that we should be under just to agree
something. And, as the Member for Ramsey said, a sticking plaster over this – is that what we
really want: to put yet another sticking plaster over the finances of the Isle of Man? Let’s make
sure that we put the finances on a sustainable footing for all those people into the future.
Thank you, Madam President.
5615
The President: Hon. Members, it is the witching hour of eight o’clock.
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1627 T133
TYNWALD COURT, TUESDAY, 21st JUNE 2016
Suspension of Standing Orders to complete Item 11 –
Motion lost
Mr Cregeen: Madam President, can I move that we continue to the end of this Item?
5620
Mr Cannan: I second that, Madam President.
The President: I have a proposal that we continue, Hon. Members.
5625
Mr Watterson: Can I suggest, on this one, Madam President, that this is a marathon, not a
sprint and it will be waiting for us in the morning – just as part of the contribution to this.
Several Members: Hear, hear.
5630
5635
5640
The President: Well, you can vote against the proposal which is going to be before us.
We have a proposal that we continue until this Item is finished.
The Chief Minister (Mr Bell): Madam President, could I just make one suggestion: as it is
eight o’clock, this might be an opportune moment to adjourn until tomorrow morning to give us
all chance to fully appreciate the implications of the amendment before us, rather than be
taking the amendment on the hoof. It gives us chance to think through the implications rather
than be bounced into something late on at night which you might actually live to regret in the
morning.
This at least will give us, overnight, chance to consider the implications of this. (A Member:
Hear, hear.) Ordinarily, I would support going on late – and this is to support the mover of the
amendment as much as Government’s resolution. I think it would be beneficial to everyone to
have a chance just to reflect on it for an hour or two rather than –
Mr Malarkey: I second that proposal.
5645
5650
The President: Can I then suggest to you, Hon. Members – we have a motion to continue –
on the basis that you want to continue tomorrow, you vote against that proposal; if you want to
finish tonight, you vote for it.
Could we have an electronic vote, Hon. Members, please.
A Member: The motion is …?
The President: The motion is that we continue until this Item is finished. I think that was
what the Hon. Member said.
5655
Electronic voting resulted as follows:
In Tynwald – Ayes 4, Noes 26
FOR
Mr Cannan
Mr Cregeen
Mr Hall
Mr Singer
AGAINST
Mr Anderson
Mrs Beecroft
Mr Bell
Mr Coleman
Mr Corkish
Mr Cretney
Mr Crookall
Mr Harmer
Mr Henderson
________________________________________________________________________
1628 T133
TYNWALD COURT, TUESDAY, 21st JUNE 2016
Mr Joughin
Mr Karran
Mr Malarkey
Mr Peake
Mr Quayle
Mr Quirk
Mr Robertshaw
Mr Ronan
Mr Shimmin
Mr Skelly
Mr Teare
The Lord Bishop
The Speaker
Mr Thomas
Mr Turner
Mr Watterson
Mr Wild
5660
The President: There are 4 votes for and 26 against. The motion, therefore, fails, Hon.
Members.
We will now adjourn and reconvene at 10.30 tomorrow morning.
The Court adjourned at 8.02 p.m.
________________________________________________________________________
1629 T133