By Richard Digard
PARDON me if this come across as in any way mean-spirited, but one of the most complacent things I’ve heard a politician utter was your Inna Gardiner finding it “reassuring” that Jersey employs a similar proportion of public sector staff as other jurisdictions.
Bad enough coming from a Deputy who supposedly cares about the pounds in taxpayers’ pockets, but from the chair of the Public Accounts Committee it was off-the-scale self-satisfaction with how superbly Jersey’s government does, well, everything.
But then that appears to have been the whole purpose of the document breezily entitled “Government employment, revenue and expenditure – international comparisons”: to reassure Islanders that the huge growth in civil servants and other States employees – up by 1,570 from 2018 to 2023 – was perfectly acceptable. Nothing to see here, move along…
Any PAC chief doing a proper job would be responding, “what the actual…? How can this be? We’re supposed to be a nimble, low-tax island trying to let people keep more of what they earn, not celebrating that we proportionately have more civil servants than Portugal or the United States.”
But then a report produced by Jersey’s bureaucrats about the consequences of more of them being employed by the taxpayer was always unlikely to be critical of a growth trajectory that, if you accept the narrative, has effectively remained the same for 50 years.
To explain, that means the proportion of employees working for the Government of Jersey has been stable over that period both in absolute numbers and as a proportion of the total workforce, which the report tells us is the relevant indicator for international comparisons.
One of the other headline findings was this: “Taking account of both public and private-sector employment, Jersey’s proportion of employment in ‘Public administration, defence, education, human health and social-work activities’ is essentially the same as the EU average.”
Well, another apology from me for raining on the parade, but that’s meaningless guff. What’s relevant is the split of those jobs between the public and private sectors, not pretending that Jersey is in any way comparable to a European economic union that’s trying to stamp out tax competition, has an extensive and expanding regulatory framework and majors on its expensive welfare policies.
In short, if I was a Jersey taxpayer, I’d be terrified by this report. It gives politicians carte blanche to keep on recruiting and – worse, as I’m sure many of you will believe – keep on growing the population.
The thing is, this remarkable trick of standing still while taking on thousands more public servants works only while the number of people here keeps expanding and you create more “proper” jobs in the private sector, which puts increasing strain on services and infrastructure. But above all on house prices. In short, it’s a bit of an employment Ponzi scheme.
A few years ago across the water, the biggest employer was finance, followed by retail and wholesale. Now, finance and the States of Guernsey are neck and neck in terms of employment, at around 17% each of the total workforce. At current rates of public sector growth and financial-services shrinkage, government will overtake and become the biggest single employer. That’s frightening.
Jersey, if you believe the statistics, is a way off that. Last summer, for instance, 21% of workers in Jersey were in financial and legal activities, with “just” 14.3% in the public sector. Here’s the thing, though, wholesale and retail accounted for 11%, which is comparable to Guernsey.
So too is hospitality, construction and quarrying, and miscellaneous business activities. Yet apparently the Guernsey and Jersey public sectors don’t align. Hmm. However, there’s another 14% of the workforce, just shy of 9,000 individuals, in education, health and other services, so perhaps there’s some overlap there.
The point, however, is that States employees are expensive – £58,240 a year on average, according to the States of Jersey’s own June 2023 figures – and in total cost you half a billion pounds a year, excluding pension liabilities.
The other thing to bear in mind is that Jersey proportionately gets more revenue from income tax and less from goods and services than most Organisation for Economic Co-operation and Development jurisdictions, which were also used as comparators in the employment report. So in short, if you want to keep GST and income tax at existing levels, you need to be employing fewer – not more – public sector employees.
As it is, most of that tax take goes on the States’ own staff. Some 33% of States of Jersey Group revenues go on employees, which is more than you spend on social-benefit payments. So you, beleaguered taxpayer, are working your proverbial off to maintain a select group of employees who are the second-best paid after finance workers (an average of £65,520pa) and who also have access to a pension scheme that no private business can afford.
Don’t get me wrong. I have nothing against people who work for the States. By and large, the ones I’ve met over the years have been dedicated, hard-working and genuinely committed to providing a public service. Economically, however, you want as few of them as possible, especially when government itself is actively competing for scarce labour resources with the real wealth generators, the private sector.
Yet none of that comes through in this report. Instead, it suggests Jersey should be more like nation states – see how much better we are than Britain or France, it coos. Well, if that’s the route you really do want to travel, fine, but your last States accounts posted a deficit of £62m, more than half of which was directly attributable to rising staff costs, which went up by an eye-watering £730,000 a week.
It’s also worth noting that Jersey spends much less on economic affairs and housing and community amenities than some of its favoured comparators but appreciably more on public order and safety and way more on health. That accounts for 28.5% of all government expenditure compared to low 20s in the UK (with its “unaffordable” NHS) and Ireland and just 15%-ish in France and the EU as a whole.
As I understand it, backbench Deputy Max Andrews is waging something of a one-man battle against spiralling States of Jersey staff costs. Keep at it, Max. This report gives you all the ammunition you need.
