St Helena : St Helena EXCO Report (03/07/08)
Submitted by Saint Helena Herald (Juanita Brock) 13.07.2008 (Article Archived on 27.07.2008)
H. E. the Governor Mr Andrew Gurr updates us on the latest Executive Council activity.
ST HELENA EXCO REPORT
By H. E. the Governor Mr Andrew Gurr
In my broadcast on the EXCO held on Tuesday 1st July I made it clear that not only have we been paying less than planned for our electricity over the past 6 months, but the actual cost of generating that electricity has increased enormously due to the rapid rise in the cost of oil. As oil represents over 60% of the price of electricity, no increase in efficiency could get near to being enough to deal with the problem, and in any case we do not believe that substantial efficiency gains are achievable in this operation in the short term.
Back in December we undertook to review the electricity tariffs after 6 months, and our findings are that the present situation is a significant threat to the balancing of our budget and the honouring of our undertakings to DFID.
Unless something is done to increase the revenue from electricity, then there will have to be savings of over £60,000 per month made elsewhere within government. We do not see that as being realistic at this time.
In that report on last Tuesday’s meeting I said this:
“If we are to begin to perform as agreed both in the Development Aid Planning Mission agreement (known as DAPM), and planned in the Sustainable Development Plan, we have to demonstrate that we are clearly on the pathway towards paying our way in the provision of utilities.” I went on to say that Councillors were in full agreement with that principle, and that was re-affirmed at yesterday’s meeting. As I also indicated in that report, this additional meeting of both Informal LEGCO and then EXCO was not arranged to debate the amount of the increase, as the principle has been confirmed. It was to make sure that the pattern applied to the increase was acceptable, and that an appropriate safety net is provided for those within our society who are particularly vulnerable when faced with this kind of rise.
Indeed the wording of the July 2007 DAPM Agreement actually speaks about “…an appropriate safety net for those on low pay and in receipt of benefit”.
Thus our aim in all these discussions is to ensure that those who are in receipt of Income Related Benefit (IRB) and those who are in low income working families (that is one earner and children), will not be any worse off as a result of the rise. The clear implication is that all the rest of us will be worse off, and however hard that may be, in the present world economic situation, I am sure that we must regard that as inevitable.
At our first meeting, which included all available Councillors and advisers, we received a full presentation of the proposals from the government team. We were then able to test the model and see whether alternative mechanisms might improve the picture in any way. At the end of quite a lengthy discussion I believe that all of the alternative proposals were seen to be less likely to achieve our objectives. Thus the pattern and amount of increase was established.
The actual level of increase will obviously depend on the level of usage, but it was mentioned that for the small user (and more of us will fall in to that bracket as a result of the change), the increase could be just over £1 per week.
We then discussed the safety net in the light of the very detailed recent proposals from the Social Development Planner with regard to the consolidation of benefits. The principle of not mixing the electricity tariff issue with the social benefit issue was held to be important, but clearly the two must be introduced at the same time, so that the vulnerable are not worse off.
The matter of the low income family that is not in receipt of Social Benefit had been raised in the Action Plan in the Annex to the Memorandum on tariffs, and plans are being made to ensure that this issue is thoroughly dealt with.
In the EXCO that followed, Councillors were not able to finally recommend acceptance of the revised tariffs unless it
is crystal clear that the safety net is real and in place. I was happy to agree with that condition as I feel it both socially just and entirely within the spirit and the letter of the DAPM agreement.
This does not necessarily mean that there is any delay in the implementation of the tariffs as every month that goes by will increase the loss, but what it does mean is that we need to put some flesh on the bones of the concepts as to how we help the low income families.
Those proposals will be forthcoming shortly and will be discussed at an Executive Council.
AMG
4th July 2008
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