Let’s enjoy our unexpected good fortune – while it lasts

The document includes references to things like consolidation adjustments, actuarial assumptions and derivative financial instruments – descriptions that can be off-putting to those who have never come across them before.

But those issues aside (which are easily solved by any good internet search engine), it is actually a very interesting and, more importantly, a very telling read.

It is also worth noting that the Treasury intends to sum up the accounts in some kind of pamphlet in the not-too-distant future to make them more

accessible to Islanders.

They have also done their best to explain any funds, panels and systems along the way in the report to help us all to understand exactly what has been going on where.

And all that deserves praise. Yes, the accounts are detailed, longer in pages than the last of the UK’s whole Government Accounts, and I certainly had to reread parts of it more than once.

But if you want an idea about where your money is spent and the health of our public finances, then it is definitely worth a read.

The headline conclusions that revenues were up last year after the States collected £29 million more in tax than they had expected, that departments underspent their budgets by 27 million and that the figures helped to turn an expected £72 million shortfall into an operating deficit of £12 million are, of course, good news.

I say ‘good’ because given the delicate economic climate around the world, Jersey will still have to be careful. But we have no debt, more money than we thought and assets worth almost £3 billion.

Islanders should feel both pleased and reassured with what the accounts show, particularly given what so many other countries are going through at the moment. But the States Accounts contain a lot more than just the headline conclusions.

Even a quick flick through the hefty document will show up some unusual, perhaps even random, snippets of information that we otherwise wouldn’t know.

Take for example the reference to ‘payment of suppliers’. This section is only three lines long, but basically says that the States have a policy to pay suppliers 30 days after receiving an invoice. The average payment period for 2011 was 32 days –the same as it was in 2010.

Now I can only assume this policy is in place to ensure that the States get the most out of keeping their money in the bank for the longest possible time -– a good thing for taxpayers, but not so good if you are the one who is owed money.

Then there is a reference to ‘significant internal control issues’. This section basically sums up issues that arose during 2011 which highlight the need to improve some systems. The accounts also give actions that are to be taken to help solve the ‘issues’ and at what stage those are at currently.

The ‘issues’ it identifies include well known ones such as the failure of the Education department to cut the grants to fee-paying schools in order to achieve its savings, as well as the Lime Grove affair and the Uplands saga.

But there are others, such as a problem with how some new employees and departing ones are paid because the right documents aren’t always provided by HR. As a result, the accounts say, some people haven’t been paid properly in the past. Actions to try to improve that situation are currently in progress.

These snippets go on and on and give perhaps the clearest picture there is of how the whole government across the board is working.

BUT the accounts have bigger implications than just telling us what has been happening where and what the States’ bank balance is: they also pave the way for what happens next.

Next month the Council of Ministers will lodge their medium-term financial plan, which sets States spending for the next three years. It is the first time our politicians will have debated a three-year plan, and it replaces the old system whereby decisions were made each year. It is hoped that it will improve flexibility for departments and give them more freedom to plan ahead.

Now that plan will, of course, need to continue to uphold the prudent spending ideals we have heard so much about in recent years. After all, as the Treasurer and Treasury Minister have both told us, Jersey is only in a better-than- expected financial position because savings have been made and so on and so forth. And we must remember that things could get worse around the world before they get better.

But given the relatively positive position we are currently in, that plan and the subsequent decisions agreed by the States must not be too ‘tight’. Instead, the States must be prepared to spend some money on important things like health, housing, tackling unemployment, updating schools and improving roads and sewers. And with accounts like the ones published last week, ministers are surely poised to ask for more money for exactly those things.

OF course, such funding has already started in some cases, with injections of £27 million for social housing, and so on, but there has to be more as well. We don’t want to get into debt or use up all our savings, but some spending can, should and will happen.

The accounts are also good news for Islanders who might be worried about taxes going up next year because, basically, it means that they won’t have to.

Instead, the Budget due to be lodged with the States later this year and debated in December will not be much different from what was agreed last year, bar some inflationary adjustments in allowances.

All in all, it is pretty positive news, and we shouldn’t forget that. Chamber of Commerce president David Warr has been reported as saying that the ‘austerity’ measures of the States had led to Islanders being gloomier about the economic prospects than their Guernsey counterparts. His comments followed a survey by Investec Specialist Bank which showed that we Beans were more pessimistic about our economy than our rivals over the water.

Pessimism isn’t a good thing and it doesn’t mean we have won yet another battle over the Sarnians; this time, we are losing.

So let’s enjoy the relatively positive news about our public finances, for the time being at least.

l To read the States Accounts for 2011 visit www.statesassembly.gov.je and click on reports.