In his inaugural speech Mark Trenchard criticised the funding for Les Nicolles schools, when he claims the island faces a black hole in its finances.

Last month politicians agreed to fund the building of two new schools at a cost of nearly �50m.

Education Minister Martin Ozanne says the States listened to concerns, but the schools were necessary.

Mr Trenchard believes the decision was made without any clear idea of what further educational costs it could lead to in future and is calling for a clearer prioritisation of spending on capital projects.

If Guernsey chooses to abolish corporation tax in 2008, the States could lose millions of pounds of tax revenue, and departments have been warned of the need to cut down on spending.

The new �47m schools should be open in 2007.