15 September 2021
An interim perspective
Introduction
Thank you for inviting me to join you today. Speaking to this audience, I am reminded of President Ronald Reagan's remark that the 9 most terrifying words in the English language are – "I'm from the Government and I'm here to help". Mindful of his advice, my presentation is more by way of an interrogation into what the Island has gone through during Covid, what we have learned and what we should do next.
In his time in post, Charlie Parker spoke twice at Chamber events upon his arrival in February 2018 and again in October 2019. Reading these speeches after a passage of time is interesting in terms of our reform journey, especially now after the experience of Covid and all that we have learned during the pandemic. I'm going to talk about what we have learnt, our shared prospects between us all and some of the challenges we need to face up to going forward.
Stranger comes to town
When I arrived in Jersey, I was reminded so much of Tolstoy's observation that all great literature truly consists of two basic stories. The first is 'a stranger comes to town'. It's such a powerful framework for how we make sense of events. A stranger came to town – and then what happened? What happened next? What did he – or she - do? What did people think? How did it work out? Did the stranger stay or leave?
This is a powerful narrative everywhere, but in no place so much as an island. Many of you may have initially arrived as strangers. For my part, it has been an exhilarating and a wholly positive experience. I have met a lot of people, and found all elements of human life is here. Jersey seems to me to be the world in a single island. I initially asked many people I met – "what advice do you have for me?" Many people emphasised the importance of listening. Perhaps if he would not mind, I would like to single out the Bailiff's reply to me at our first meeting. He said, "be careful not to impose your own agenda too much".
As it happens, this has been advice I can follow because the Chief Minister, Senator Le Fondre, gave me a very clear brief in taking on the role – he explained to me , the Government Plan is there, a lot of change is already underway, we just need you to keep up the momentum and progress, and not to allow the change in Chief Executive to slow down delivery.
This is what I am trying to achieve, at the same time as inevitably bringing a different personality and character to the role of Chief Executive. I am very interested in organisational culture and would happily talk about this as a topic in its on right. However, and in summary, I believe that the nurturing of a performance culture in which every employee is valued, supported and inspired and is able to give of their best is at the centre of a Chief Executive's job. Alongside a constant, creative challenge to the organisation to be more resident focussed, innovative and efficient. The pandemic has seen the unleashing of wholly new ways of working – in particular, remote and agile working – which I think can be very positive for any workforce, for their life/work balance and especially for productivity. I say productivity because as work moves from a place you travel to into a thing that you do, it helps us focus more exclusively on the outcomes we wish to achieve. At the same time as reducing the lost productive time involved in travelling into the office, and potentially stimulating more digitally enabled processes.
It's important for me to say that one of the first things that struck me coming into post here in March is how incredibly hard working the people I joined are – from the Chief Minister downwards, there is a huge work ethic and I am very struck by the dedication and long hours worked by civil servants, especially during Covid. I believe the island is well served by this genuine and deep seated public service ethic.
Societal changes during Covid
Covid has accelerated and intensified change that was inevitably going to take place and is now happening faster as a consequence of the pandemic.
The role of businesses in being at the heart of our prosperity and economic viability has come to the forefront during the pandemic. This has obviously been a very difficult time for many businesses, especially those in particularly impacted industries like hospitality and events. I know that Ministers have done everything they could to support businesses through our various interventions and support schemes. The economic evidence that we have is that Jersey businesses and employment levels are recovering at a far better rate than we could ever have envisaged, and that the innovation and adaptations that you have made to your businesses have been incredibly successful in sustaining business and employment levels. This has already been recorded by the Fiscal Policy Panel in its last report and will be further evidenced in the Government Plan 2022 which will be lodged with the States Assembly later this month and will show a more positive account of the public finances than would have been thought possible even a few months ago.
What other changes are accelerating as a consequence of the last 18 months? A relentless increase in online shopping including deliveries to the front door is one clear trend. For all those who like me have been subject to self isolation earlier in the year, the development of choice and quality in online shopping was a lifetime. Tim Brown tells me that at Jersey Post while letter delivery is in continuous decline, parcel delivery continues to grow exponentially. But what will this mean for Island businesses, growing or making high-quality local products, for sale in our local retail centres? It seems to me that the development of local supply chains is an important feature of the pandemic period.
Linked to this, Jersey is well on the way to being a cashless society. When I arrived in February, I had a £5 note in my wallet. The ubiquity of contactless payments meant that this £5 was untouched until, in July, I found myself in the awkward position at the Prince of Wales pub of discovering at least one establishment that remains cash only. Thankfully, this is now very much an isolated exception and I have even seen roadside vegetables stalls promoting their use of Revolut as a form of payment.
The Government's management of the pandemic also saw changes to the way that we work. Greatly improved use of data analytics is one crucial example. Rapid decision making is a second. Streamlined procurement processes is a third. Many people – inside and outside the civil service – have described to me the construction of the Nightingale hospital as a stand-out example of a more agile Government in practice. Unhelpful rigid separations between the civil service and Arms Length Bodies were dissolved as the pandemic compelled better teamwork and the utilisation of expertise wherever it existed – whether in the private sector, voluntary organisations, arms length bodies or elsewhere.
Can we sustain the positive learning from the pandemic as we emerge into this post-pandemic era? If we are to do so, we need first to discuss and agree what these positive changes were, and identify and seek to continue them. I think I detect broad support for a more data informed approach to public services, a more collaborative approach and a more outcome focussed approach. Many of the Government reforms in recent years have supported and enabled that direction of travel. The pandemic has enabled the Government to demonstrate clearly the benefits of a more strategic approach to policy making, in which one over riding objective can unite our public services and community in a central endeavour. I wonder if as we emerge from the pandemic, there might be an appetite to sustain this sense of a uniting mission which galvanises the Island – the north star to which the Economic Council referred in its report towards the end of last year? Many Islanders told me about their heightened awareness of how fortunate we are to live in such a beautiful place and that therefore environmental protection, preserving and enhancing natural beauty, promoting liveability and addressing climate change are fundamental assets that provide the basis for quality of life here and future quality of life for our children.
I therefore see the opportunities of the coming period as a growing confidence that in the aftermath of Covid, we know the Island can be resilient, agile, data driven and outcome orientated when we put our minds to the task. And we have a heightened awareness of what we value as an island and a community. But the pandemic has also identified some major challenges.
Societal challenges following Covid
First is the growth in the size and cost of Government and our public services, and the future commitments that the States Assembly is currently assessing. Across the globe, Covid has compelled governments to increase spending dramatically to protect lives and livelihoods. Jersey is more fortunate than most jurisdictions in its Covid debt level, but beyond this the cost and size of Government has increased in recent years as can be seen here. This growth is of course planned investment in areas like Children's services, schools funding and ensuring cyber security. We have simultaneously identified and implemented over £100 million of efficiency or rebalancing savings to fund the growth. The island should take pride in these achievements, which are possibly under recognised. However, the net growth in headcount is clearly unsustainable and I am certain that in the months and years ahead the civil service will focus on the still considerable opportunities for improved efficiency and value for money. . The crucial thing for the civil service is to see improvement and efficiency as a constant process of evolution. This needs further work and attention, to reboot how we can achieve the maximum public outcomes for the lowest possible tax dollar. My 23 years of experience as a Chief Executive in English local government has taught me at least one thing – that there is little correlation between the size of government and its effectiveness or outcomes.
Second, Covid has intensified inequalities starkly. This is seen most clearly in unaffordable housing. The gap between the asset rich and the asset poor has grown, and is at risk of doing great damage to the island's economy and future growth. These real and pressing challenges are seen in successful economies and attractive locations right across the world. Every jurisdiction is searching for its own solutions, which correlate to local circumstances and ambition. These are, of course, political judgements to make and hopefully the upcoming election and political campaigning will add clarity and definition to the debate over the island's approach to tackling housing affordability. Of course, increased housing supply is the crucial response to this challenge, but there are others that I will touch upon today including the island's population policy and also the need for us to adopt a more strategic approach to the usage of capital gains from selling public owned land as well as capturing planning gain more generally. At present, we have a tangled approach to priorities including social housing, other forms of affordable housing, investment in new services and improvements to local neighbourhood regeneration. An incremental approach to decision making risks losing the benefits of a longer term and more strategic approach which is evidence based on where islanders feel that need is most pronounced.
Whatever the balance between tax and spend, and the desired level of public services, I expect that all of us will agree that our goal must be to improve productivity and reduce waste in all parts of the economy, including in the public sector. This is a third major area of challenge. In all parts of the Jersey economy, we need to focus on skills and technology, and having a concerted effort to encourage training, support and career pathways at every level to reduce reliance on employing off island. Average earnings have been essentially flat since 2001 and in particular public sector earnings in Jersey have fallen by 3.8% over this period. It seems to me that the future will be a smaller number of better paid staff.
As a Government we need to understand as fully as we can what we can do to encourage a strong and diverse economy that will generate the employment and prosperity on which the island depends. We are greatly aided in this task by the work of the Economic Council and the associated work on Future Economy that is being undertaken. The challenges posed by both Brexit and then Covid have been formidable, and in the case of Brexit, for businesses importing from the EU there are further changes ahead as UK easements are due to end in January 2022 – so businesses should familiarise themselves with these changes to avoid delays to their supply. Customs & Immigration will be engaging with trade bodies on this. But it is the reduction in availability of labour supply which is perhaps the biggest challenge facing businesses in all areas. I know this is a huge challenge for many of you, and it looks likely that given the very high cost of living in Jersey this is set to continue. It also impacts on the civil service, and so although I don't of course know about your particular situations, in our public services I envisage accessing skilled staff will be one of our principal challenges in the coming years. This may not entirely be a negative thing, as it can help spur our efforts to invest in technology as well as existing staff skills, and encouraging the talent pipeline that is already here in the island. The Chamber should be an active voice in the population debate that will be considered by the Assembly in December. I'm pleased we were able to work with the hospitality industry earlier this summer to quickly make changes to employ migrant staff already on the island. And we need to help back into work the 1,000 islanders who remain actively seeking work after the spike in worklessness during the pandemic.
We are of course undergoing the 4th industrial revolution, a digital revolution that blurs the lines between the physical, digital and biological spheres – an exponential rather than incremental change. A particular area of opportunity is the very encouraging development of our digital and Artificial Intelligence industry – for example in JTs successfully incubated Internet of Things company which remains Jersey based. The case for investment in green energy is overwhelming, and I know that colleagues at Jersey Electricity are at the centre of building this case. The innovation and creativity in our arms length organisations is one of the most impressive features of working in Jersey.
And finally, the impact of the pandemic on mental health services, and especially child and adolescent mental health services remains a huge challenge. The Government has rightly invested in these services and yet we still face significant challenges. Jersey should be incredibly proud that the Island's schools were closed for a shorter period than most other jurisdictions in the world. However, it is clear that the impact on mental health and educational outcomes has been significant and wide ranging, especially on those young people who have lower levels of access to opportunities for learning, culture, sport and family support. As we emerge from the pandemic, we need to fully understand, as a community, where the highest levels of harm have been felt and what more we need to do to ensure that longer term life chances are not eroded.
Business prospects
I appreciate that for many of you here, this has been and remains a most challenging period. This Business Activity indicator shows just how hard it has been, and although many businesses are now recovering well this is not necessarily the case for hotels, restaurants and bars. And this index of business sentiment shows a similar picture – that business sentiment in hotels, restaurants and bars is much more negative than for all other sectors. I recognise how frustrating it must have been during the pandemic that decisions that impacted so profoundly on your businesses and livelihoods were taken when you weren't in the room. However, you need to know that with the Minister for Economic Development, Senator Farnham as one of the ministerial decision makers, even though you were not in the room your views and interests always were.
I believe that in the context of this island, our future challenges and prospects between the public and private sectors are tied together intimately in common challenges – how can we become more productive, be less dependent on external labour and invest more in technology and skills? How can we develop a spirit of innovation and enterprise, one in which entrepreneurs get their chance and where we value experimentation and change? How can we build upon the island's experience of the pandemic that demonstrates the value of working together towards outcomes, agility, innovation and collaborative working?
History will record that Jersey has managed this crisis with great humanity, courage and enormous dedication. Leadership is about outcomes. Good process is essential – and in the pandemic we have seen high standards of governance and process, operating under pressure. But Jersey seems to me to have an appetite for getting things done. The Island will emerge from the pandemic as a resilient, optimistic and progressive jurisdiction. This sets the scene for the June 2022 elections and a new States Assembly which will have so much to build on and look forward to.
The challenges in Jersey, while real, are ones that almost every other jurisdiction in the world would readily exchange for their own. The States Assembly's finances are in positive shape; we are emerging from Covid in good order; most islanders enjoy a high standard of living within an area of great beauty; our economy is in a better position than we could have thought possible 12 months ago; Jersey's reputation for stable government, high standards and the predictable rule of law underpins the island's reputation. In an uncertain world, there are surely few jurisdictions that are better placed for the future.
Conclusion - Heroes on a journey
In conclusion, I want to return to Tolstoy and his observation that all great literature consists of two basic stories, one of which is that a stranger comes to town. I want to conclude with the second main story, which is one in which a hero goes on a journey.
But in Jersey's case, we have not one hero but 108,000 heroes. I am speaking to you now not just as business leaders, but as parents, volunteers, philanthropists, neighbours, family members and Jersey residents. The Island's heroes who have gone on a journey are our health and social care workers, our public servants, our teachers, children, voluntary organisations, businesses, yes our politicians and every person who has followed the rules and supported their fellow Islander.
Thank you for listening.
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